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The case of Blockbuster's inertia and Netflix's success, as discussed in 'Good Strategy, Bad Strategy', is a classic example of how resistance to change can lead to a company's downfall. Blockbuster failed to adapt to the changing market dynamics and stuck to its traditional retail model, while Netflix embraced the digital revolution and became an industry leader. This case has significant implications for other businesses. It highlights the importance of being adaptable and flexible in a rapidly changing business environment. Companies need to constantly reassess their strategies and be willing to make necessary changes to stay competitive. Those who fail to do so, like Blockbuster, risk becoming obsolete.
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Inertia and entropy, defined by Rumelt as resistance to change, are responsible for much bad strategy. The inertia of Blockbuster as it failed to abandon its retail stores meant that Netflix surpassed it and is now an industry leader. Understand the inertia of rivals, as it is vital as understanding your own strengths. As Rumelt wrote, "An organization's greatest challenge may not be external threats or opportunities, but instead the effects of entropy and inertia."
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Even some of the world’s biggest organizations do strategy poorly, and incorrectly credit their success to personal decision-making skills. We read th...
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