To summarize major risks and factors that Blockbuster has faced and will face in the future, and to recommend how Blockbuster should prepare and set their business strategies to gain competitive advantage

Blockbuster became the leader in its industry by a simple business-level strategy.  Blockbuster starting to really understand its customers by establishing convenient locations within ten minutes of its customers and ultimately small businesses in competition failed. Customer service is a major part of Blockbuster’s image.  They have at least 5 employees working at the store at one time to cover the cash register, management, as well as video returns and customer service.  A Blockbuster employee is easily noticeable, whose uniforms consist of a blue and yellow polo shirt with khakis.  They are always happy to assist the customers and will help them find the movie that they desire.  Also, Blockbuster employees have a general knowledge of films if the customer requests advice.  Blockbuster offers huge diversification of products in order to gain competitive advantage such as offering video games and video game systems to attract customers.

In the early 1990’s, one of the biggest concern that Blockbuster was the creation of pay-per-view on T.V and internet streaming which go directly to the household consumers without the process of going to Video Rental Store. A bigger threat to Blockbuster will be video-on-demand provided by cable companies which may one day be the home-entertainment industry's killer application. If video-on-demand really catches on, it's hard to see how Blockbuster would compete.  Pirating is also one of the big issues to the movie industry and they are afraid of offering products through middle man, because of the reason of consumers rent the movie and copy it and distribute it. Blockbuster recognized these industry changes and in the year of 2000, Blockbuster had negotiated a deal with DirectTV to offer pay-per-view service provided from their company, because of the high price of copying (around 10 dollars) versus the pay-per-view of the one time viewing of $4 dollars.  For customers who want to buy new DVDs, Blockbuster will have a hard time matching Wal-Mart's prices. Because of that, it appears much of the chain's new strategy will have to rest on their belief that some customers will shift back from buying to renting DVDs. Consumers really do watch some of their old DVDs over and over. But some viewers can't help but wonder whether that $18 investment in some movies was really a smart move after all.  Over time, Blockbuster will have to hope that accumulated buyers' remorse will lead people to realize that renting offers better value. Blockbuster can hope to expect to see a slowdown in the number of DVDs consumers buy, which will boost rentals and thus use its strengths to exploit new opportunities.  Blockbuster must establish scenarios which can influence studio executives that they can earn more from DVDs than video-on-demand, as for the studios to have a vested interest in supporting the older technology.