Question

In: Economics

Blockbuster FY2003 10K states, "Blockbuster Inc. is a leading global provider of in-home rental and retail...

Blockbuster FY2003 10K states, "Blockbuster Inc. is a leading global provider of in-home rental and retail movie and game entertainment, with approximately 8,900 stores in the United States, its territories and 27 other countries as of December 31, 2003." John F. Antioco serves as chairman, president and chief executive officer. Mr. Antioco signed the 10K reflecting his assessment of Blockbuster Inc at the time of its writing.   Also in 2003, Mr Antioco identified "Netflix, (as) our primary domestic competitor in online rental" and planned a competing online service. According to Blockbuster's 2003 10K and using Lovallo & Sibony cognitive bias types, what three statement:cognitive bias couples are true? Select the single best available answer from those presented below.

A) "We expect this (online) service to ultimately drive store revenues by not only attracting new customers who want the convenience that both the online and store channels provide, but also by bringing back customers who we have lost to competing online rental services": Competitor Neglect; "During 2003, we opened or purchased 341 company-operated stores (180 in the United States and 161 outside of the United States)": Confirmation bias; "During 2004, we plan to invest significantly in new systems and infrastructure to support our new initiatives, such as the expansion of our rental subscription programs, which includes our online rental subscription service; the continued development of our games store-in-store concepts; and the continued development and implementation of our movie and games trading model": Anchoring and insufficient adjustment.

B) "We expect this (online) service to ultimately drive store revenues by not only attracting new customers who want the convenience that both the online and store channels provide, but also by bringing back customers who we have lost to competing online rental services": Sunflower Management; "During 2003, we opened or purchased 341 company-operated stores (180 in the United States and 161 outside of the United States)": Confirmation bias; "During 2004, we plan to invest significantly in new systems and infrastructure to support our new initiatives, such as the expansion of our rental subscription programs, which includes our online rental subscription service; the continued development of our games store-in-store concepts; and the continued development and implementation of our movie and games trading model": Anchoring and insufficient adjustment.

C)"We expect this (online) service to ultimately drive store revenues by not only attracting new customers who want the convenience that both the online and store channels provide, but also by bringing back customers who we have lost to competing online rental services": Competitor Neglect; "During 2003, we opened or purchased 341 company-operated stores (180 in the United States and 161 outside of the United States)": Confirmation bias; "During 2004, we plan to invest significantly in new systems and infrastructure to support our new initiatives, such as the expansion of our rental subscription programs, which includes our online rental subscription service; the continued development of our games store-in-store concepts; and the continued development and implementation of our movie and games trading model": Sunflower Management

D) "We expect this (online) service to ultimately drive store revenues by not only attracting new customers who want the convenience that both the online and store channels provide, but also by bringing back customers who we have lost to competing online rental services": Competitor Neglect; "During 2003, we opened or purchased 341 company-operated stores (180 in the United States and 161 outside of the United States)": Status quo bias; "During 2004, we plan to invest significantly in new systems and infrastructure to support our new initiatives, such as the expansion of our rental subscription programs, which includes our online rental subscription service; the continued development of our games store-in-store concepts; and the continued development and implementation of our movie and games trading model": Anchoring and insufficient adjustment.

E) "We expect this (online) service to ultimately drive store revenues by not only attracting new customers who want the convenience that both the online and store channels provide, but also by bringing back customers who we have lost to competing online rental services": Sunflower Management; "During 2003, we opened or purchased 341 company-operated stores (180 in the United States and 161 outside of the United States)": Status quo bias; "During 2004, we plan to invest significantly in new systems and infrastructure to support our new initiatives, such as the expansion of our rental subscription programs, which includes our online rental subscription service; the continued development of our games store-in-store concepts; and the continued development and implementation of our movie and games trading model": Power of storytelling.

Solutions

Expert Solution

Answer:Blockbuster Inc was a leading global provider of in-home rental and retail movie and game entertainment with approximately 8900 stores in the United States,its territories and 27 other countries as of 31 December 2003 as mentioned in question itself.

The three statement has true on the basis of coginitive couple bias was:

a)"Our brand database and distribution network combined with our planned system upgrade should enable us to successfully compete in online rental and have a substantial advantage over existing competetion".

b)"We also currently have store based movie subscription programs in about 25% of our U.S. locations and we plan to offer these programs in all of the remaining U.S. locations".

c)"During 2004 we plan to invest signicifantly in new systems and infrastructure to support our new initiatives,such as the expansion of development of our games store-in-store concepts and the continued development and the implementation of our movie and games trading model".

The single best statement is (c)"During 2004 we plan to invest signicifantly in new systems and infrastructure in order to support our new initiatives,such as the expansion of development of our games store-in-store concepts and the implementation of our movie and games trading model"

Blockbusters did one main job better than others providing entertainment to the users.But every firm need to adapt and evolve as technology changes todays date at super fast rate.Blockbuster did mistake to focus in one areas rather than shifting their focus from movie mail order service to online streaming.Blockbuster was too busy to counting money and enjoying their success,never got an idea technology is changing and so does people preferences.


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