Question

1. Who was the Blockbuster mainstream customer in 1999?

   • 2-10 year old children.
   • 30-45 year old moms renting VHS tapes.
   • 18-29 year old males trying out new technology called DVDs.
   • All of the above.

2. Who was Netflix’s mainstream customer in 1999?

   • 2-10 year old children.
   • 30-45 year old moms renting VHS tapes.
   • 18-29 year old males trying out new technology called DVDs.
   • All of the above.

3. Blockbuster was talking to their customers and offering small improvements in their service, in-store experience and the availability of movies. Blockbuster was pursuing _________________.

   • incremental innovation
   • network effect
   • disruptive innovation
   • learning curve effect

4. Netflix offered a fundamentally different product and service. The company was pursuing a ______________.

   • incremental innovation
   • network effect
   • disruptive innovation
   • learning curve effect

5. Which of the following is a main external threat to competitive advantage?

   • imitation
   • substitution
   • hold up
   • All of the above

6. Netflix’s offering was a _____________ to the traditional brick-and-mortar store that rented movies to customers.

   • imitation
   • substitution
   • hold up
   • cost

7. Why did Blockbuster struggle so much in responding to Netflix’s disruptive innovation?

   • Traditional market research.
   • Traditional resource allocation processes.
   • The company didn’t struggle.
   • a and b

Answer 1

1)

Who was the Blockbuster mainstream customer in 1999?

30-45 year old moms renting VHS tapes.

2)

Who was Netflix’s mainstream customer in 1999?

18-29 year old males trying out new technology called DVDs.

3) Blockbuster was talking to their customers and offering small improvements in their service, in-store experience and the availability of movies. Blockbuster was pursuing

Incremental Innovation

4) Netflix offered a fundamentally different product and service. The company was pursuing a

disruptive innovation

5)

Which of the following is a main external threat to competitive advantage?

All of the above

6) Netflix’s offering was a _substitution__ to the traditional brick-and-mortar store that rented movies to customers.

7) Why did Blockbuster struggle so much in responding to Netflix’s disruptive innovation?

A & B.

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