Or so I gather from The Five Forces Circles of Hell

A discussion of some of those “five forces” (Supplier Power, Customer Power, Threat of New Entrants, Threat of Substitute Products, Industry Rivalry) with a couple of examples of exploiting them, offensively (good) and defensively (bad). i.e. pleasing the customer is an aggressive and good exploitation of some of these forces, while defensive implementation to protect your business model often ignores the satisfaction of the customer (which is, for sake of argument, a bad thing™).

All Blockbuster does today is provide, at great expense, an elaborate distribution channel to deliver very cheap plastic discs with expensive data on them to every neighborhood in every major city and town in the country. As soon as DVDs became the predominant data format, Blockbuster became nothing more than a highly expensive, slow, ultra-high latency internet with a data warehouse limited by inventory practicalities. Of course, DVDs did eliminate the hated “rewind charge,” but that’s another story. All Blockbuster is really doing is delivering digital data. Poorly.

Which is, of course, followed by “Enter Netflix, stage left,” followed by “Enter high-speed, high bandwidth internet, stage right.”

and

The success of the iPod and iTunes is based more on breaking arbitrary restrictions on consumers than anything else. Jobs has almost done for music what Netflix did for video rental. The process is simple. Admit that commodity pricing is on the horizon and, rather than cling to old models, simply implement it. We aren’t quite at the point where iTunes is a flat-fee per month for unlimited downloads, but a fixed per-song price is an amazing advance considering the artificial technical restrictions the music industry has imposed. And at least here we are paying for content, not for distribution.

via Daring Fireball