...Blockbuster: Movie Rentals in the Digital Era SWOT Analysis Internal Strengths If a strength or a weakness is ambiguous, explain the reasons that you have to classify it as a strength or a weakness. * Overall size of the company: Blockbuster is #1 in the industry. In the entertainment industry size is very important. Large companies are able to get better deals from movie studios. * Management team is open change. The management of the company appears to be open to new ideas. This will allow the company to adopt to new challenges. * Aggressive expansion and acquisition performance. The company seems willing to expand to new areas. They have a successful record of successfully acquiring other businesses. * Established name and customer loyalty. The company has a very widely recognized name. Many consumers are very loyal to Blockbuster. It is very likely that they will purchase the company’s products if they are offered through a different format. * Offers rentals via stores and online * Strong international presence. Blockbuster has established a very strong brand equity in many countries of the world. This is a major strength if the company wants to expand internationally. Internal Weaknesses * Many format changes over its history has created consistency issues. This has resulted in confusion among consumers. Many consumers have negative feelings towards Blockbuster based on their past experiences. * Lack of first mover...
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...Sherrill Business Administration Capstone May 1, 2014 1. Assess how globalization and technology changes have impacted the corporation you researched. Blockbuster has evolved throughout the 25 years that the company has been in business. Blockbuster initially provided home videos and video games rentals and throughout the years added DVD rentals, DVD by mail, streaming, video on demand and Cinema Theater. The company merged with Viacom in 1993, but was unsuccessful so Viacom bought Blockbuster for $8.4 billion dollars. Blockbuster also moved business across the globe into the United Kingdom and became the number one video store in the United Kingdom. In the year 2000 Blockbuster turned down the opportunity to purchase Netflix which has become one of the biggest on-demand internets streaming media available to viewers across the globe. Blockbuster was at an all-time high in sales in 2004 employing over 60,000 people with over 9,000 chains of stores. From 2003 to 2005 Blockbuster loses 75% of its market value as competition increases from the likes of Netflix and Redbox. (Marcus, Schaefer 2011) By 2010 the competition from Netflix drove sales for Blockbuster down causing the company to suffer and file for Chapter 11. Globalization may be defined as the integration of the world’s people, firms and government (Green n.d). Technology has expanded and made everything assessable via internet, which we can now be accessed through computers, laptops...
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...MGT 201 CASE ANALYSIS A New Blockbuster Image POINT OF VIEW The group will take the point of view of the Chairman of Blockbuster, H. Wayne Huizenga. As Chairman, he is director, decision maker, leader, manager and executor of the company and thus, in the position to solve and decide upon the dilemmas faced by Blockbuster regarding the issues on the diversification of the company. MAJOR PROBLEM From 1985 to 1992, Blockbuster has managed to become a video-rental giant. But by 1993, Blockbuster through its Chairman, H. Wayne Huizenga was seeking a new image, that of a multimedia company. Steps were taken towards this goal including sponsorships of concert tours, music retailing, television and film production and operating indoor children’s play centers. These diversification strategies, however, did not escape from several criticisms and by the fall of 1993, Chairman Huizenga had enough reasons to rethink of what he wanted for the company. The myriad of difficult decisions concerning Blockbuster’s future can be traced to the dramatic changes in the company’s strategic context. This and Huizenga’s hurried and scattered approach to diversification had put the company into danger. How should Chairman Huizenga address the criticisms that arise from his abrupt and scattered decisions on the diversification of Blockbuster? CASE FACTS Three factors that make up strategic context which could have helped Huizenga understand the opportunities and constraints set before...
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...failing and thriving businesses provides insight into best business practices. Examining a failed company, Blockbuster, and a successful company, Intuit, offers an opportunity to learn from managerial mistakes and triumphs. Failure and Success Blockbuster Inc. is an example of a failed business. Their updated mission, objectives, and vision were altered too late to keep up with the changing demand for convenient internet streaming videos. The company stated their “mission is to provide our customers with the most convenient access to media entertainment, including movie and game entertainment delivered through multiple distribution channels such as our stores, by-mail, vending and kiosks, online and at home. We believe Blockbuster offers customers a value-prices entertainment experience, combining the broad product depth of a specialty retailer with local neighborhood convenience" (Farfan, 2014 Blockbuster's Mission Statement). Their vision was to “provide our customers with the most convenient access to media entertainment delivered through multiple channels…. Offer customers a value-prices entertainment experience… broad product depth… with local neighborhood convenience” (Blockbuster Goes Bust – Outfoxed by Redbox, Licked by Netflix," 2014, para.8). The updated objectives were reasonable but were implemented too late to save the company. Although Blockbuster had a strong brand name, large market share, had been in business for a relatively long time, a positive financial...
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...failing and thriving businesses provides insight into best business practices. Examining a failed company, Blockbuster, and a successful company, Intuit, offers an opportunity to learn from managerial mistakes and triumphs. Failure and Success Blockbuster Inc. is an example of a failed business. Their updated mission, objectives, and vision were altered too late to keep up with the changing demand for convenient internet streaming videos. The company stated their “mission is to provide our customers with the most convenient access to media entertainment, including movie and game entertainment delivered through multiple distribution channels such as our stores, by-mail, vending and kiosks, online and at home. We believe Blockbuster offers customers a value-prices entertainment experience, combining the broad product depth of a specialty retailer with local neighborhood convenience" (Farfan, 2014 Blockbuster's Mission Statement). Their vision was to “provide our customers with the most convenient access to media entertainment delivered through multiple channels…. Offer customers a value-prices entertainment experience… broad product depth… with local neighborhood convenience” (Blockbuster Goes Bust – Outfoxed by Redbox, Licked by Netflix," 2014, para.8). The updated objectives were reasonable but were implemented too late to save the company. Although Blockbuster had a strong brand name, large market share, had been in business for a relatively long time, a positive financial...
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...Fall 2011 | BlockBuster Case Analysis | | 1. What role has Netflix played in the development of Blockbuster’s strategic planning? How important is Netflix to Blockbuster’s future strategic plans? Before answering this question ,I would like to highlight that It s clear after reading the case that blockbuster main problem was making strategic plan without considering its scorecard as they never anticipated change or tried to early explore strategic alternatives and they never examined consumer or competitive responses. In a nutshell they were always reactive and not proactive and they never considered that new entrants always seek market space that leaders ignore. To answer this question, I will try to answer the three major strategic marketing questions “Where to compete?”, “How to compete?” and “When to compete?” and apply my answers to Analyze Blockbuster case Where to Compete: * Blockbuster’s targeted the whole market of home movie viewers in the US. Afterwards, they started to target international markets. Blockbuster service their customers through rental stores and they kept using the same business model. However, they failed to understand the change in consumer behavior as people became more busy and don’t have time to visit their stores. * Netflix targeted same market but with different approach as they offered mailing system of movie rentals that go directly to customers and that was very convenient solution and they started capturing...
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...(Block)Busting the Movie Rental Industry June 1, 2005 BEM 106 Final Paper Zhan Wang Harrison Stein Chin Yeung Siu Ruiqi Rachel Wang Introduction: Since the 1910s when Charlie Chaplin created his first silent films, movies have been a staple in American culture. For over half a century, “the big screen” was the only link between first released Hollywood films and captivated audiences nationwide. The advent of modern technology like the VHS tape and the DVD, however, has provided viewers with a convenient way of viewing movies, new and old, no longer playing in theaters. In addition, cost considerations have made DVDs and VHS tapes ideal for short-time rentals. Thus these inventions and the terms of their usage have helped to create a movie-rental market within the larger movie industry. Rentals and other theater substitutes have become essential to the movie watching experience because the theater no longer holds the monopoly it once did. While movie theaters are still widely popular, many people dislike the inconvenience of finding a local theater playing the right movie, driving there, and then standing in long lines to buy a ticket. Some do not appreciate the large crowds that often include cell phone talkers and loquacious teenagers. And some simply don’t want to shell out ten dollars to a movie that has the chance of being Ishtar. For whatever reason, there is a large demand for rentals and substitutes from audiences who want to see the movies they...
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...* 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...
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...Failure Analysis LDR 531/Organizational Leadership Business Failure Analysis Businesses are created with the intention to be successful, achieve goals, and create profits. The continuity of business success depends on the capability to forecast changes on markets and economies, and create a plan to adapt to change, if management failure to forecast changes, the business welfare will be unstable. Blockbuster was a leader on the movies rental business, and failure to reinvent as company, leading to failure. Business Failure Analysis determined Blockbuster’s vision and mission, indicators of the business failure and success from research, how organizational behaviors lead company’s failure, and how the role of leadership, management and culture of the organization in business failure. Business Failure Analysis explained techniques that Blockbuster must used to prevent the impending failure, identified potential barriers during the change process, evaluated the power and political issues within the organization, and described the steps followed to implement the organizational change based on John Kotter’s 8-step plan for implementing change. BUSINESS FAILURE ANALYSIS Blockbuster Inc. was an American-based home movie rental provider, and at its peak in the 2000’s had up to 60,000 employees and more than 9,000 stores. Companies objectives were achieved, become number one movie rental provider in United States of America, and spread their branch thru the world with stores...
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...the twentieth century Blockbuster Video. We are going to take a look into the company to show how it changed the way we watched movies and the challenges the company faced over the years. What changes could have been made to save the icon? Did the company evolve with technology? What eventually brought it to its knees? Introduction Nothing to do on a Friday or Saturday night “let’s rent a movie someone says” they all jump in the car and go to the nearest corner where they are sure to find a Blockbuster Video store. Blockbuster Video was the largest movie rental company in the nation. Movies ranged in price from $1.99 to $4.00 the older the movie the cheaper the price. In order to rent movies you had to complete an application and open a membership based on your criteria you were allowed to rent a certain number of movies at a time. The normal limit was 3 at a time. The rental was for a day. Be aware if you rented all three and did not return them the next day you were charged another days rent. The price would be incurred the next time you rented a movie. Blockbuster was raking in the money. Consumers had great intentions and wanted to watch anything they could get their hands on. Fees were being charged through the roof. Blockbuster was at the top of its class. They had great prices, good customer service, numerous copies available to rent, and an abundant selection of different types of movies from new releases to classics. Blockbuster Video was the...
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...stock or decide to cut supplies short, there are not many alternatives to obtain DVD’s or right to a movie. The seller has the power to control distribution and prices. Buyers Buyers have limited powers and options. An avid movie renter is limited to the selection available in store or library on line. The movie rental companies are limited to the supply they can purchase and stock their stores with. They are unable to control prices, but larger companies do have the upper hand since they can order larger quantities to get a better deal. Rivalry among Competing Sellers There are very few competitors in the movie rental industry of which consist of Netflix, Blockbuster, and small businesses. These few control overall market share of the industry. The main competition is between Netflix and Blockbuster. Blockbuster is currently the leader in movie rentals until Netflix introduced their DVD’s by mail program and subscription based business model. Potential New Entrants There are little to no potential entrants into this industry. A recent entry into the movie rental industry is Red Box; they are a vending machine style movie rental. This market requires entrants to have large capitals to acquire movie rights along with fresh new...
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...Blockbuster Video or Netflix This case started as Blockbuster Video but has morphed to include Netflix. The issues facing the two companies are similar, so you can choose to address the case from the perspective of either company. Just specify which perspective to use. In 1985, Blockbuster Video (now a subsidiary of DISH Network ticker: DISH) quickly became a sensation. Households had just begun to acquire video-tape players in earnest. Few people were willing to pay $85 to buy Hollywood videos. Cable TV existed, but most people still watched broadcast television stations, and only a few premium Cable channels existed. Satellite receivers existed, but the huge satellite antenna was generally only used by people who lived in the middle of nowhere and had the space to put the ugly dishes. Customers quickly jumped onto the idea of renting videos. The early market was dominated by small mom-and-pop rental shops that bought a few copies of hit movies and rented them in a small regional area. For a while, video-rental stores had a tinge of disrespectability because many of them rented adult videos. Then, Blockbuster Video went national with large, bright, well-lit stores. To remain family-oriented, the chain does not carry videos with anything more than an ―R‖ rating. Blockbuster quickly took over the market. The original system pioneered the use of bar codes. Customers carried a bar-coded ID card and movie cases were printed with specific codes. The computer system made...
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...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...
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...Paul Noonan Micky Thakkar Carlton Graham Dave Hasty Christina Carroll Busgr 567, Marketing Strategy Dr. Joyce Hunter May 25, 2010 Case Study: Blockbuster, Inc. [pic] Table of Contents: Dave Hasty Mission Statement, History of Blockbuster, pg. 3-5 Carlton Graham/Paul Noonan Marketing Strategy, 5-6 Marketing Mix, 6 Target Markets, 6-7 Micky Thakkar Marketing Objectives and Goals 7-10 Paul Noonan/Micky Thakkar Advertising and Promotion Strategies 10-13 Environmental Analysis and Porter Analysis 13-15 Christina Carroll SWOTs 15-19 Netflix SWOT Redbox SWOT Blockbuster SWOT Competitive Advantage Strategic Focus Paul Noonan Financials 19-20 Future Trends 20 Recommendations 20-22 All Questions 22-25 Bibliography 26 Compiled by Paul Noonan The History of Blockbuster Inc. Blockbuster’s mission statement is “To be the global leader in rentable home entertainment by providing outstanding service, selection, convenience and value.” Blockbuster is an American based chain of retail stores renting DVD, Blu Ray, and video games. They have over 9,000 locations in the US and 25 other countries worldwide. It is headquartered in the Renaissance Tower located in Dallas, Texas. The first store was opened in Dallas, Texas 1985 by David Cook. Cook had started a company called Cook Data Services Inc. in 1982 selling software to Texas’s oil and gas industries.[i] When the industry went flat Cook was searching for another source...
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...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...
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