Marketing Strategy (Sonoco Products Company) SWOT Analysis
Paper details:
There are three Documents, the first one and the second are an old case and its answers (they are sample) that you have to do the same things for the third document. The third document is the new case that you should work on (Sonoco Products Company), and you have to answer it as the second document. There 10 discussion questions that you have to answer. You should answer the SOWT in two and half pages and the discussion questions in two and half pages also. Plagiarism is not acceptable. So read the Sonoco products company case carefully (The third document) and answer it as in the the second document (in the same way).
Blockbuster: Movie Rentals in the Digital Era
SWOT Analysis
Internal Strengths
If a strength or a weakness is ambiguous, explain the reasons that you have to classify it as a strength or a weakness.
• Overall size of the company: Blockbuster is #1 in the industry. In the entertainment industry size is very important. Large companies are able to get better deals from movie studios.
• Management team is open to change. The management of the company appears to be open to new ideas. This will allow the company to adopt to new challenges.
• Aggressive expansion and acquisition performance. The company seems willing to expand to new areas. They have a successful record of successfully acquiring other businesses.
• Established name and customer loyalty. The company has a very widely recognized name. Many consumers are very loyal to Blockbuster. It is very likely that they will purchase the company’s products if they are offered through a different format.
• Offers rentals via stores and online. This allows the company to service consumers that prefer online rentals without abandoning the consumers that prefer the store experience.
• Strong international presence. Blockbuster has established a very strong brand equity in many countries of the world. This is a major strength if the company wants to expand internationally.
Internal Weaknesses
• Many format changes over its history has created consistency issues. This has resulted in confusion among consumers. Many consumers have negative feelings towards Blockbuster based on their past experiences.
• Lack of first mover advantage in online rentals. Most consumers do not associate the Blockbuster name with online rentals. This may make it harder for the company to move into new markets.
• Struggling with the success of its online business. The company does not seem to be willing to allow the online business to grow. It still remains a “store-based” company. This mentality inhibits the company from growing new businesses.
• Struggling with failed marketing initiatives in response to competition. It appears to be a “reactive” company and not a “proactive” one. It does not have many innovative ideas but it waits for the competition to introduce a new product and then it follows.
External Opportunities
As you can see these opportunities are not controlled by the company. These are environmental trends that are favorable for the company
• Continuing growth home theater and watching movies at home. This growth ensures growing demand for dvd and internet rentals in the future.
• Rapid advancement of broadband technology and its delivery capabilities. This advancement in technology makes downloading movies through the internet a very attractive possibility for consumers.
• Lack of competitive movement in the technology area
External Threats
As you can see these are external unfavorable trends. Blockbuster, may decide to take certain actions based on these trends.
• Current and future competition (MovieLink, CinemaNow, IPTV, iTunes, Zune, etc.). This is a very competitive market and new companies will enter this market in the near future.
• Upcoming burn-to-DVD technology and DVR technology. These options may allow consumers to record movies in high quality. As a result they may not want to rent movies.
• Streaming technology and pay per view. Consumers may decide to use the new streaming technology to watch movies, instead of going to the movie store.
Teaching Questions
1. What role has Netflix played in the development of Blockbuster’s strategic planning? How important is Netflix to Blockbuster’s future strategic plans?
Based on the information presented in the case, Netflix has been one of the major catalysts forcing Blockbuster to change its business practices. Until Netflix entered the industry, Blockbuster faced no national competitors and had to compete only with regional companies. Netflix will remain a major influencer in Blockbuster’s future strategic plans, especially if Netflix enters the burn-to-DVD or broadband distribution markets prior to Blockbuster.
2. As an advisor to Antioco, what strategic options would you recommend for Blockbuster as the company moves forward? In particular, how would you approach the technology issues facing the company?
Many potential options were discussed above. With respect to technology, the simple answer is that Blockbuster must evolve along with technology or face extinction. If Blockbuster cannot acquire technology competency on its own, it should create alliances with firms that can help Blockbuster achieve its strategic objectives.
3. What value-added components could Blockbuster offer to the movie studios that might entice them to more closely align with Blockbuster as a distribution channel?
Currently, movie studios—especially smaller studios—do not have the infrastructure to distribute movies to the end consumer. The studios have always relied on third-party distributors to complete this task. Through an alliance with Blockbuster, the studios would not have to make major resource allocations for the development of distribution channels. Blockbuster has a solid reputation and working relationship with the movie industry. Blockbuster can provide the movie studios with key point-of-sale consumer information due to its brick-and-mortar format. Blockbuster also has an extensive database that can be used by the movie studios for promotion and other purposes. The major value-added component Blockbuster offers is the access to end user and end user data.
4. In the long term, how can Blockbuster increase the value-added components of its product offering in order to offset the inconveniences associated with its traditional brick-and-mortar movie rental business? Will Blockbuster survive as we know it today? Explain.
This is a very complex question and the answer is evolving daily. Blockbuster recently launched a program where customers can rent online, and then return movies to the store in order to expedite the shipment of the next movie. Online customers do not have to wait for the movie to ship back to Blockbuster and be processed. Blockbuster has to continue to move into the online arena, and should look at other companies for ideas. For example, students might recommend that Blockbuster adopt fast-food practices such as drive-thru windows and home delivery.
If Blockbuster takes no action in terms of current technology changes, it will continue to exist for a short time. Ultimately, physical movie distribution will be replaced by electronic delivery. To survive as a store-based company, Blockbuster would have to focus on value-added services, one-of-a-kind product offerings, and the loyalty of its key customers.
