Market Failures in Movie Rentals

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Submitted By ktaylor32
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Pages 4
Market Failures in Movies Rentals
Katelyn Cuffle
Microeconomics
April 12, 2014

In today’s economy the technological advancements and market shifts have taken a toll on big businesses all over. Blockbuster, one of the well known movie stores suffered because it couldn’t keep up with the fast moving market shift in using new technology to rent movies on demand and now they are closed. The purpose of this report is to inform readers about market failures that happen when new technological advancements take over. Next this report discusses how adjusting to market shifts affect businesses. Finally this report discusses a solution that could help solve the problem for stores that can’t generate enough customers to come in because of technology. In the past couple years we have seen the “industry entertainment and media giants lose revenue as young upstart companies (or larger ones with visionary leaders) leverage the capabilities of the Web to outperform them. And now we're watching them go bankrupt as they fail to reinvent their business models to counterbalance the distribution of information online (Welchman, 2010).” Blockbuster is a well known business who because of the new technology advancements like ordering movies from your television and having Netflix went bankrupt. In today’s economy technology is moving at a fast rate and for a lot of businesses there having problems keeping up. “Frequently big business is grid-locked with a deep and nested organizational structure which makes horizontal collaboration and operational change difficult to achieve. And associated operational supports are frequently aligned to them - making the organization bloated and slow-moving. On the other hand, small…...

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