For a few years now, I’ve been doing a riff on Blockbuster and Netflix in some of my speaking engagements. It’s been a useful case for sharing many of my insights about strategic management and the role of technology in strategy (disclaimer: neither of these firms has been a client of mine, and my impressions have been formed only from publicly-available information).
The essence of the riff is this: Blockbuster built a very successful business model and then had its lunch eaten by Netflix. The key lessons we can learn from this case are:
- Don’t underestimate the power of technology to change your competitive environment.
- Constantly be looking for ways to challenge and reinvent your value proposition, or your competitors will do it for you.
- Recognize and overcome the forces that will resist change in your own organization.