Major problems and issues of an organization analyzed through a case Essay

Major problems and issues of an organization analyzed through a case study - Essay Example The two thus form a good case study through which the major problems that face organizations can be studied. An in-depth analysis of the companies will be undertaken through a brief background on the two in the movie rental market followed by diagnosis of their situations. A competitive and performance analysis will then be undertaken with recommendations on the way forward being generated. Netflix was started in 1997 by Reed Hastings and 10 years later had already taken over market leadership in movie rental services. Figures such as $1.2 billion in revenues, 100,000 movies in their catalogue and 7 million subscribers are quite enviable in the market. The main source of their dominance has been pioneering online movie renting through subscriptions (Thompson, Strickland and Gamble). Blockbuster on the other hand enjoyed early market domination since its inception in 1985 by David Cook (Blockbuster.com 2009). Its main source of advantage was availing movies at a much cheaper rental rates through negotiating deals with the major film studios thus reducing its rates to even just a tenth of competitors’. Blockbuster’s competitive advantage was nullified by Netflix’s focus on internet adoption. The two firms are still competing in a highly competitive market as stated by Netflix Inc. (6). Diagnosis of Netflix’s and Blockbuster’s Competitive Situations. Netflix is at the moment the market leader but is facing cutthroat competition from a resurgent Blockbuster which re-strategized and started slicing Netflix’s market share to an extent that forced the later to reduce its subscription fees leading to drop in its stock prices from panic. Other competition is also being felt from other albeit smaller rivals such as Redbox. Netflix (6) is also in recognition that the movie rental market is subject to drastic and rapid changes since