...Blockbuster Fights for Survival against Intense Competition - Blockbuster struggling to compete with competition (Netflix, Apple, Amazon, cable providers, etc) - Blockbuster video started in 1985, Wayne Huizenga bought Blockbuster in 1987, took company from 130 stores to 1,500 - Acquired Sound Warehouse and Music Plus in 92, also purchased Cityvision which provided 975 stores in UK - Bill Fields came in as CEO, he had the Wal-Mart attitude and he closed down 50 stores, he also moved the headquarters to Texas from Florida, some upper management did not want to relocate and this caused vacancies. - John Antioco new CEO changes – repositioned back to traditional competitive advantage in home entertainment rentals, finalized transformation of Blockbuster back to focusing on movie and game rental industry - 2003 – Blockbuster launched rental subscription program which allowed subscribers to rent an unlimited numbers of movies - Blockbuster was able to capitalize on home entertainment growth trends, with blockbuster.com - James keys replaced Antioco in 2007, he wanted to use technology to transform the company, and he wanted to change the image of the company from rental shop to a content shop - Stock of blockbuster went from $26 to $4.30 from 2002 to 2007; Keyes joined Blockbuster when they were closing down many shops - Movielink created by 5 major Hollywood studios, blockbuster bought this company because they studios did not have experience. - From 2005 to 2007, blockbuster...
Words: 339 - Pages: 2
...Jackie Sutton Case Study Report COMPANY NAME/WEBSITE/INDUSTRY Company Name: Blockbuster Website: www.blockbuster.com Industry: Video rental BACKGROUND/HISTORY Blockbuster was founded by David Cook and opened its first store in 1985 in Dallas, Texas. When the company first began the main focus was on home video rentals but in 1987 Blockbuster won a major lawsuit against Nintendo and paved the way for customers to rent video games as well. The company reached its peak in 2009 and then started to see intense competition from other video rental companies like Netflix. Although the company filed for bankruptcy in 2010, it was purchased by the Dish Network family in 2011 and “is a leading global provider of in-home movie and game entertainment with over 2,500 stores throughout the Americas, Europe, Asia and Australia. The Company is one of the strongest and most recognizable entertainment brands in the world.” (“Company overview,” 2011). Prior to its 2011 Dish Network acquisition, James Keyes served as the CEO. “Dish Network reported that its Blockbuster unit had turned a $13.9 million profit for the first quarter on revenue of nearly $334 million” (Frankel, 2012). SWOT ANALYSIS Strengths * High brand familiarity. * Successful operations in global markets. * Loyal customer base. * Wide array of choices offered to customers. | Weaknesses * High operating costs. * More expensive than some competitors offering same services. * Rentals need to be returned...
Words: 2868 - Pages: 12
...The Closing of Blockbuster Video’s Stores The Closing of Blockbuster Video’s Stores Hanna, Peter Southern New Hampshire University OL-500 Hanna, Peter Southern New Hampshire University OL-500 Abstract: With increasing competition and the growth of technology, it is important that organizations maintain focus on an innovative and clear strategic direction as well as always striving for customer satisfaction. There are four major issues, inefficient and arrogant strategic direction, customer dissatisfaction, fiscal irresponsibility and a lack of innovation that ultimately led to the demise of the video rental “Kingpin” also known as Blockbuster Video. Introduction: Organizational strength relies on its infrastructure and strategic management. The study of organizational behavior within any organization is intriguing. Success relies on many factors that involve leadership, strategic vision and a motivated team poised for the challenges of the day to day operations of the organization. Blockbuster Video skyrocketed to the top of the movie entertainment empire. A Leader in the entertainment industry, Blockbuster Video was plagued by challenges and failures that eventually led to their ultimate demise after a short lived 25 years. This research paper will attempt to answer how the King of the video entertainment empire withered away, even after years of company acquisitions and finally merging with Dish Network. Blockbuster Video faced fierce competition...
Words: 3480 - Pages: 14
...When people think of the sinking of the Titanic, they will most likely think of the great Hollywood blockbuster movie that was more a love story then a historical movie with documentation of what happened on that cold night of April 14, 1912. Historians like to tell people what happened from the facts that are given to them, and eye witness accounts of what had happened on the ship the night it plunged to its deep dark grave. Everyone knows that the ship sank and that it is gone, but what they don't know is what had happened while people were being loaded into the lifeboats and what was occurring after the ship went down. Men played a big role in all of this; some were looked upon as cowards and others as heroes. There are different view points of what the roles of men were. Not only during the night the Titanic went down, but also the roles they played in society in 1912. For everyone who survived the sinking, should be thankful and happy because more then half the people on the ship that night passed away. The male survivors however had to justify how they survived, because the rule of the sea was women and children got on the life boats first. The men aboard the Titanic had responsibilities after the ship collided with an iceberg. They were looked at as if they knew they weren't going to live, but they had to save the women and children who were aboard the Titanic. As for the men who just wanted to save their own lives and didn't care about anyone else, these men were...
Words: 363 - Pages: 2
...An Organizational Failure: Blockbuster Rana Fawad 1. Describe and discuss how the organization’s culture facilitated the failure. Philips (2011) believes that success or failure of any great company depends on “Events, internal and external” (p. 3). Blockbuster also appears to be a victim of certain events at internal as well as external level. Based in McKinney, Texas, Blockbuster and founded in 1985 (Blockbuster Corporate, 2012) and it ushered in a new era as far as video rental retail industry was concerned. The company gave birth to video rental places that had significant amount of movies under one roof (the first store had 8,000 movies) and were not associated with bad movies or bad neighborhoods (Greenberg, 2008). Initially, the company’s strategy was to expand aggressively and the leadership defined Blockbuster’s vision to become McDonald’s of the video rental business. Referring to the company leadership’s ambitious goals, Greenberg writes: The Blockbuster strategy was simple – pump as much money as possible into buying local and regional chains while keeping centralized control over the look and feel of the individual stores. By the VSDA convention the following year, Blockbuster had acquired two other chains and its more than 250 stores dotted the country. At the convention, Huizenga’s marketing executive Tom Gruber outlined vision for the future of the company, and it was expansive. Gruber had spent eighteen years working for McDonald’s before...
Words: 1945 - Pages: 8
...lack of blockbuster Frankie L. Jones February 11, 2013 BUS: 642 Thomas Hennefer Abstract Blockbuster video, the once dominant force behind consumers’ movie rental needs has suffered a significant loss in revenue to the rise of RedBox and Netflix. The competitive advantage offered by the two companies has tapped into Blockbuster’s market and cause a lack of blockbuster for the company. Since 2009 the company has continue to reported decreased revenue and profits against its competitors. In 2010 the company filed bankruptcy and has since then implemented new services and products similar to its competitors, however, customer’s still prefer RedBox and/or Netflix. Once upon a time on a Friday night after work, you were looking to go home, relax, and watch a good movie. You come up on a big blue sign with yellow lettering, and think, “I’LL RUN TO BLOCKBUSTER!” Today, we’re looking for the nearest RedBox, or browsing Netflix for a good flick. There was time when families would take a trip to Blockbuster, order a pizza, and make it a movie night. Today, people have the luxury of not even leaving the house to find a good movie; thanks to Netflix. After a routine run to Wal-Mart, Walgreens, or Kroger’s it has become second nature to browse the RedBox, especially since the cost is only $1. But what has happened to good ol’ Blockbuster? Over the past few years Blockbuster video locations have steadily declined. Blockbuster, the once powerful source for movie and video game rental...
Words: 2466 - Pages: 10
...* Should Blockbuster have known that dramatic change to their Business Plans would be necessary? Blockbuster didn’t have a technology problem, because digital distribution was minimal, but rather a customer problem. It gave customers no reason to visit stores in lieu of the latest and greatest hit. (www.forbes.com/.../the-internet-didnt-kill-blockbuster-the-compa... Forbes Nov 8, 2013) * When should they have sensed or perceived a change to their business would be necessary? Lack of ease of accessibility and higher prices in connection to other video rental outlets. Blockbusters main competitors such as Netflix, Redbox, and many On Demand services seem to have a much better grasp of the importance of instant access at a lower price. (Blockbuster Inc. (SWOT analysis). http://www.yousigma.com/comparativeanalysis/blockbusterinc.html) * When should they have innovated or changed their plans to comprehend the perceived changes? Blockbuster’s biggest mistakes were that it failed to modernize its business strategy to include a multi-channel avenue for its customers to decide how they wanted to rent movies. Movie renters were and still are moving away from the traditional format of renting movies. Failure to adapt to changing consumer behavior and new technology helped companies like Netflix and Redbox gain considerable ground in the video rental industry. * What should they have considered when looking at their Porter’s Model? What do you think kept them from making...
Words: 980 - Pages: 4
...In order to assess the attractiveness of the video rental business, the industry necessitates an evaluation through the analytical lens of the five contending forces of competition. First, there is a significantly low threat of new entrants mainly due to high barriers of entry and economies of scale. For example, there are substantial capital requirements in construction of fixed facilities in strategic locations in order to distribute DVDs; there are also unrecoverable expenditures in up-front R&D and advertising costs, both of which are emphasized in order to differentiate service and build brand equity. There are also government policies to reinforce the barrier. For example, in addition to its red envelops, Netflix has patents to protect essential characteristics of its business model such as its “Max Out” and “Max Turns” approaches. This creates cost disadvantages through a greater learning curve for new entrants, especially when competing against algorithmic programs such as Netflix’s CineMatch, which becomes more effective at recommending movies as more subscribers provide feedback. Another governmental restriction is seen specifically with Amazon.com, whereby distribution channels are choked out in the US unless Amazon sacrifices its competitive advantage of avoiding sales tax. The second force of competition, the bargaining power of the supplier, is assessed as moderate to high. The movie studios and independent movie distributors provide the rights to distribute...
Words: 1295 - Pages: 6
...NETFLIX Leading with Data Another “David vs Goliath” story that can be seen in this case, where Netflix as a new small player in the industry took the crown of the giants like Blockbuster. Netflix differentiated itself from other traditional movie rental companies and revolutionized the way customers watch movies in the industry by engaging IT to create its competitive advantage. The Video Rental Industry The video rental industry initially started in the 1970s, along with the development of VCR technology. At first, the industry was struggling because it got resisted by movies studios. However, in 1990s, things has changed where studios saw the video rental industry as a good opportunity to increase their revenue. Ever since then, people were able to watch movies directly from home. Later, in late 1990s, DVD format was launched. DVD has become the industry standard and had opened up a way for startup businesses, including Netflix, to compete in the market. As a result of the rapid development of technology and internet evolution, the industry, once again, has shifted into the streaming video online era. Company Brief Netflix is one of the largest online DVD movie rental company in the world. It was founded in 1998 by Reed Hastings, the current CEO, and Marc Randolph. Reed had come up with a brilliant idea over an event that took place when he rented Apollo 13 and was penalized with the $40 “late fee”. Then with the booming of internet...
Words: 894 - Pages: 4
...whereby increasing the profitability of the business due to stiff competition from the Blockbuster or to sell it off or hire a manager for the shop and start doing job at some other place, has to be evaluated on the basic objectives of economics of the firm. The main objective of the firm is to maximize the profit and thereby maximize the return on investment. In order to attain this at the same market share it is suggested to sell the business to the competitors, if they are interested. Word Counts: 102 Table of Content SITUATION ANALYSIS | 2 | THE PROBLEM STATEMENT | 5 | OPTIONS | 5 | CRITERIA FOR EVALUATION | 6 | EVALUATION OF OPTIONS | 7 | RECOMMENDATIONS | 9 | ACTION PLAN | 9 | Situation Analysis Outlook of Video Rental business in Lexington In Research conducted by the Chad Rowan for the business of Video Rentals when it was relatively a new business, it was found that it is profitable enough to earn more than the average rate of return on investments. So it was possible to start with the store of 200 square feet with the 500 video tape library in Lexington, North Carolina, a town of 28,000 people. Due to innovative ideas and marketing strategies, it was possible to generate the sales volume of $64,000 in the first year itself which was further invested in the business to buy the video tapes. Just because the expansion and to cope with the demand of the Video it was decided the own a new shop of 1000 square feet with the capacity to store 3000...
Words: 1313 - Pages: 6
...Competition 5 International Expansion 6 ANALYSIS 6 Industry Analysis 6 Business Model 8 Company Analysis 9 Competitor Analysis 11 Amazon 11 Blockbuster 12 Redbox 13 ALTERNATIVES 13 Additions of Subscription Fee Package 14 Introduction of Netflix' Pay-For TV Channels 15 Domestic Elimination of DVD-mail-in Services in 16 Strategic Partnerships 17 International Expansion 19 Market Strategy 20 RECOMMENDATION 22 CONCLUSION 26 REFERENCES 26 EXECUTIVE SUMMARY Netflix is the world’s leading subscription service provider, offering its members access to an extravagant collection of TV shows and movies. Initially, the company offered its subscribers a low price, single monthly plan, consisting of both the unlimited Internet video streaming service and a DVD-mail-in service. Subscribers could “watch TV shows and movies anytime, anywhere.” In July 2011, Netflix eliminated the combined plan and separated the two services into their own monthly plans. If subscribers wanted to continue receiving both services, they were obliged to sign up for both the services separately, Consequently, the resulting price increase of the new “combined” plan significantly increased subscription cancellations and resulted in a 50% drop in Netflix’ share price over one month ( Yahoo Finance, 2013). The Internet video streaming industry becoming increasingly more competitive, particularly due to the fact that many substitutes exist and number of competitors is increasing...
Words: 6770 - Pages: 28
...Zubrod, Abel Dominguez, Eric Paniagua, Su Rodriguez LDR/531 January 11, 2015 Professor David Warren Introduction The mission statement for Redbox and Blockbuster both have focused on providing customer satisfaction with media entertainment that includes movies and games. In the years prior to the inception of Redbox in 2002, Blockbuster offered customers a value price entertainment experience, combining the broad product depth of a specialty retailer with local neighborhood convenience (Poggi, 2010). Blockbuster Inc. was a global business with 8,000 stores and offered movie and game rentals for home use by consumers (Poggi, 2010). Since 1992, Outerwall LLC had looking for ways to provide value, convenience and simplicity to consumers and retailers with the kiosk brands best known, Coinstar a leader in money services and Redbox, the best value in home entertainment. Outerwall LLC has a network of more than 66,000 kiosks and will be re-imagining new retail solutions to fit everyday consumer needs for the present and the future (Outerwall.com, 2015). Blockbuster – Success and Failure Blockbuster’s vision Statement: "At Blockbuster, diversity means valuing differences. It's a corporate value that must be continually developed, embraced and incorporated into the way we do business" (Poggi, 2010). Blockbuster was a video rental store that started in Dallas, Texas the first store was opened in October, 1985 and the theme for the company was to be a family-friendly business...
Words: 2155 - Pages: 9
...Closing of Blockbuster Alimatu Asumah Organizational Behavior Southern New Hampshire University I. Introduction a. Closing of Blockbuster b. Challenges faced by Block c. Filling for bankruptcy II. Dish Takeover and Tactics a. Dish Purchase and Layoffs at Blockbuster b. Exploring new channels c. Blockbuster need for innovation III. Employment and Morale a. Compensation and Quality of work b. Morale and Job Satisfaction c. Corporation Image IV. Conclusion I. Introduction Founded by David Cook and Wayne Huizenga in the mid 1980’s, in the late 1980's and early 1990’s, Blockbuster Inc. was the leading in the video rental industry. Which grew quickly maintaining interest in the entertainment industry, including retailing music. Also growing nationwide, many American families were turning all over to movie rentals as a form of in-home entertainment. I propose that an organizational behavior theory that leads to a company’s success includes a rational system perspective and the most important things within these theories are formalization and specific it y of goals. Organizational behavior becomes standardize. Through formalization, organizational behavior becomes standardize making training of new employees easier for both management and the employee. Goal specification allows procedures for specific tasks to be performed along with a structured way for resources to be allotted (Kreitner 2012). When companies have a rational structure, expectations...
Words: 1596 - Pages: 7
...Netflix Anthony Farias Strategic Planning for Organizations MGT450 Professor: Vivian Scott December 8, 2011 Abstract Founded in 1997, Reed Hastings observed; noticed and assessed that there was a growing demand for motion picture rentals. Netflix began with an offer for their ever-growing customer base in which competitors like Blockbuster and Hollywood Video had not brainstormed with the idea that would allow customers to select and purchase movie rentals right from the privacy of their own home. No need to wait in line in a retail store anymore for a secondary movie pick because their primary selection was ‘sold-out’; Netflix posed its strategic move against all other competitors and thus came into existence. In 2011 the conditions that all the home entertainment companies must implement to meet or exceed current standards is now more than ever needed with a lagging economy of more than three years. At the same time, consumers are striving to save money, time, and gas as all three of these conditions effect the movie rental industry. This research paper will address a brief history of Netflix, the competitive industry in which they compete, potential breakdowns, and finally an offer of speculation for how to address forecasted future breakdowns in a way that will turn them into positive possibilities. Netflix The vision of Netflix is simplistic: “Our vision is to change the way people access and view the movies that they love.” (Netflix.com...
Words: 2158 - Pages: 9
...Netflix and Blockbuster. This research project will demonstrate why the two companies changed to stay in competition. Additionally, this research project will demonstrate how technology obligates organizations to change their business model. Blockbuster opened their first store in 1985 in Dallas, Texas and expanded to operate 6,500 video rental stores (Blockbuster, n.d.). The organization was a competitor in the small video rental stores by providing a wider selection of movies and game rentals. Because of the positive, public acceptance Blockbuster expanded quickly and opened stores across the nation, London and Canada (Blockbuster, n.d.). Netflix was founded in 1997 in Scotts Valle, California. The organization website was launched in April 14, 1998 providing to the public online-per-rental model. Netflix introduced the monthly subscription concept in September, 1999. In February, 2007 Netflix introduced the video-on-demand via the Internet. At the present time Netflix provide services in Canada, Latin America, the Caribbean and Europe. Netflix is recognized to be one of the most successful dot-com ventures (Funding Universe, 2011). ORGANIZATIONAL CHANGES Blockbuster was purchased by Dish Network after filing for bankruptcy in late September 2010. The company has closed a large number of stores at it works to create an online video-streaming outlet (Merced, 2010). Blockbuster’s edge over its competitors is that it is allowed to carry videos as soon as they...
Words: 2065 - Pages: 9
