Disagreements about the business-level strategy a firm’s managers have chosen to implement is one of the often cited reasons stock-

holders decide to launch a proxy battle. One of the benefits for observers and students of business is that these public battles provide a clear debate regarding the superior benefits of one strategy compared to another.Many times, the differences of opinion revolve around the effects of the five forces on a firm’s ability to earn above-average returns. In this exercise, you will study a set of recent activities that is grounded in these realities. The battle to be considered involves two stars: (1) a company that was a great entrepreneurial success just two decades ago, Blockbuster Video, and (2) Carl Icahn, a corporate raider.

The battle at Blockbuster surfaced in part because of the changing nature of the five forces of competition in the video rental industry.

Those forces seemed to be changing in ways that created entrepreneurial opportunities for the two firms mentioned below to compete against Blockbuster. That is, the competitive advantage that Blockbuster had built to effectively position itself relative to the industry’s five forces of competition was beginning to deteriorate.

Using the information gained from Part One, systematically assess the effects of the changing five forces of competition on each of the three firms’ business-level strategies. Given the changes with respect to the five forces and in light of the emerging competition Blockbuster faces from Netflix and Comcast, do you think that CEO Antioco or corporate raider Icahn better understood the effects of changes to the five forces of competition when it comes to Blockbuster’s ability to defend itself against the newly emerging nature of the five forces?