MBA 505

Blockbuster Questions

(1) Blockbuster tried to get traction online in many ways without much apparent success.  Succinctly describe each effort, the ultimate outcome of each, and what they could have done to produce better results.

(2) Lots of different business models were tried pre-bubble on the Internet.  Compare and contrast the models used by Blockbuster (their dot com division), Kozmo, Food.com, and Netflix.  Which ones actually have the potential to work and under what circumstances?

(3) Companies like Reel.com, Kozmo, and Food.com raised massive amounts of venture capital and spent aggressively selling in many cases  negative margin offerings.  Obviously they were not expecting to make it up in volume!  How could they justify this behavior?  Why would an investor condone this type of activity?