Academic journal article Organization Development Journal

Strategic Repositioning of the Service Supply Chain

Academic journal article Organization Development Journal

Strategic Repositioning of the Service Supply Chain

Article excerpt

Abstract

This study uses archival data, observations, and focus groups to better understand strategic repositioning in the service supply chain. The strategic management theory, resource based view theory and social exchange theory are used to develop a conceptual framework. The study attempts to answer three research questions concerning Blockbuster, Inc.: What is the role of technology innovation? How does strategic repositioning apply? What is the role of strategic alliances? A discussion and implications of the study are offered.

Introduction

One of the major challenges in business and industry observed today is firms' inability to sustain their performance and competitive advantage when technologies or markets change (Bower & Christensen, 1995). While firms are quite adept at making incremental performance improvements to their extant technologies and giving their customers something more or better in the product/service attributes they already value, but often they fail to meet the challenges of the disruptive technologies that introduce a radically different package of attributes from the one that mainstream customers typically value (Bower & Christensen, 1995). Managing disruptive innovations involves reworking many things inside and outside the organization - product/service package, pricing, cost structures, business models, segmentation, customer networks, product applications and complements, and supplier networks and alliances. Innovation in the service sector is necessary for companies to maintain their cornpetitive advantage in their respective industries (Lyons et al., 2007).

This study examines the strategic repositioning of Blockbuster Inc.'s service supply chain. Blockbuster suffered a number of set-backs due to disruptive technological innovations and attempted to reposition its strategy to meet competitive challenges in the movie rental industry. The study uses archival data, observations, and focus groups to better understand the strategic repositioning of Blockbuster in the movie rental industry. The objective of this study is to capture some of the mistakes made during the repositioning of Blockbuster's strategies and understand the implications of reconfiguring its service supply chain. The strategic management theory, resource based view theory and social exchange theory are used to develop a conceptual framework of strategic repositioning in the service supply chain. We attempt to answer the following research questions in this study: (1) What is the role of technology innovation as it relates to Blockbuster and its position in the movie rental industry?; (2) How does strategic repositioning apply to Blockbuster, Inc.?; and (3) What role might strategic alliances and organizational change have for Blockbuster to achieve a competitive position in their industry?

The next section provides a conceptual framework for strategic repositioning in the service supply chain. The elements in the framework are discussed, then we provide a discussion on Blockbuster's efforts to strategically reposition itself in the movie rental industry followed by some implications for management.

Conceptual Framework

The strategic management theory provides for an understanding of the need for aligning an organization with its internal and external environments in order to achieve a better competitive posture and firm performance (Elms et al., 2010). Forming alliances with other organizations is a key strategic approach to manage the challenges of the environment by taking mutual advantage of each other's expertise. The strategic management theory has been extended to include alliance networks as a major repositioning tool (Dittrich et al., 2007). In this study, the focus is on the challenges of relationship building among supply chain partners. The paper considers the dynamics inherent in organizational change efforts involved in uniting organizations across a supply chain for the sake of effective and efficient sourcing, operations, and marketing of products and services. …

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