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Blockbuster Analysis

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Blockbuster Analysis
Company Background Information The first Blockbuster store opened in 1985 in Dallas, Texas and has now expanded to operate 6,500 video rental stores (“Blockbuster Inc.,” n.d.). The chain began as a competitor to smaller video rental stores with a much wider selection in movie and eventually game rentals (“Blockbuster Inc.,” n.d.). Blockbuster quickly grew and opened stores across the nation along with its first stores in London and Canada in the late 1980s (“Blockbuster Inc.,” n.d.). In 1994 Viacom bought out Blockbuster after the company had acquired two music companies, Sound Warehouse and Music Plus, making it a very successful corporate giant in the video rental business (“Blockbuster Inc.,” n.d.). Although Blockbuster has faced many challenges with its “new ownership, increased competition, and a relatively soft market for videos,” Blockbuster has been able to remain in the movie rental industry (“Blockbuster Inc.,” n.d.). Despite the company’s struggles and dwindling cash flow in the late 1990s, Blockbuster decreased its rapid expansion, but slowly continued to open stores so that it featured a store close to every large neighborhood in the country (“Blockbuster Inc.,” n.d.).
Currently, Blockbuster is still facing struggles in the video rental industry but is working to compete against its newer main competitors, Netflix and Redbox (Merced, 2010). After filing for bankruptcy in late September of 2010, Blockbuster was purchased by Dish Network in hopes to save the company and reposition it as necessary (Merced, 2010). The company will apparently be closing a large number of stores as it works to create an online video-streaming outlet (Merced, 2010). The main advantage that Blockbuster has over its competitors that is keeping it afloat is that it is allowed to carry videos as soon as they are released as opposed to the...

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