...Perhaps the most unique thing about Netflix, at least as a business, has been the company’s ability to shift from one paradigm to the next. As evidenced by its most recent earnings release, Netflix is in the midst of yet another transition -- and it could be the most revolutionary one yet. When Netflix was founded in the late 1990s, the company was built on single-rental DVDs by mail -- in effect, the standard Blockbuster model applied to the Internet. Later, Netflix decided to switch to a monthly subscription plan, and the company began to take off. In a piece titled “How Netflix (and Blockbuster) Killed Blockbuster” Rick Newman details how the success of Netflix’s subscription model, combined with Blockbuster’s own shortcomings, drove the once-dominant movie renter into bankruptcy. However, the most amazing thing about Newman’s piece is how outdated it is. Despite the fact that it was published less than three years ago, Newman gives only a passing mention to Netflix’s streaming ambitions. Today, Netflix is known primarily for its streaming, with its DVDs-by-mail dying a slow death. Now with video streaming as its dominant business, Netflix is working to transform what, exactly, that streaming entails. Three years ago, Netflix’s streaming content was nothing but a hodgepodge of various old movies and television shows from a variety of networks and studios -- really, anything Netflix could get its hands on at a reasonable price. At $8 per month, Netflix’s content was a great...
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...Table of Contents Company and Background....................................................................................................................................4 Rationale..................................................................................................................................................................4 Target Audience.......................................................................................................................................................4 Company History.....................................................................................................................................................5 Legal Status..............................................................................................................................................................5 Company Issues.......................................................................................................................................................5 Vision Statement......................................................................................................................................................6 Mission Statement....................................................................................................................................................6 Ethics.....................................................................................................................................
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...Blockbuster’s 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...
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...master of entertainment at the click of a single key on a laptop computer, iPhone, iPad or television. Netflix has mastered the monopoly on bringing the newest, latest movies to you home worldwide making them the front-runner, and most stable on demand movie and TV watching system on the planet. In the middle 1980’s Blockbuster came on to the scene in small stores across America with videos and dreams, starting with the video home system (VHS) and then transitioning to the digital versatile disc (DVD) dominating the video rental business. It brought fantasy and imagination to almost every home in America and in some other countries. “Blockbuster dominated the video rental industry, possessing over 9,000 stores in 2002 (over 5,000 in the United States) and boasting $6.1 billion in sales (Blockbuster Inc., 2005)” (Abraham, 2012 p.1.8). When Netflix and Redbox came into the mix of home viewing entertainment, Blockbuster lost significant revenue with its stability beginning to weaken. In 1997, Netflix started followed by the Redbox, which entered into the competition in 2002. With both of these up and coming viewing franchising gaining popularity among consumers Blockbuster was forced to file for bankruptcy protection on September 23, 2010. Then in April of 2011, satellite television provider Dish Network bought 1,700 stores. Today there is only about 50 remaining store in existence. They are holding on with little to spare and located mostly in smaller remote areas of Alaska and Texas...
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...Pfizer: Ethics and Leadership The selection process used by Pfizer to find a successor to CEO William Steere, who had lead the company to the top of the pharmaceutical industry, lacked a system of checks and balances resulting in a power struggle that ultimately led to distrust and the unraveling of Pfizer’s top brass by an outsider . The power struggle that erupted within Pfizer demonstrates how ethical breaches occur under specific conditions and the resulting damage. It is fascinating to observe how the unethical actions of a few individuals can spiral through an entire organization negatively affecting both the companies and their stakeholders. An economic analysis of Pfizer highlights the mismanagement of resources and the ensuing social and financial costs. Pfizer was founded in 1849 by Charles Pfizer and Charles Erhart as a fine chemicals business in Brooklyn New York. In the 1950’s the company changed its focus from fine chemicals into a research based pharmaceutical company. Pfizer’s growth exploded in the 1980’s and 1990’s with the success of drugs like Lipitor and Viagra. Led by William Steere and fueled by profits from Lipitor, Pfizer was entering its glory years. Under Steere Pfizer stock rose to a record high of $49 a share. When Steere took control in 1991 his emphasis for Pfizer was research and development of pharmaceuticals. Pfizer became a benchmark in the pharmaceutical industry and “was ranked among America’s best managed and most admired companies...
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...and, soon after, the United States Congress passed legislation deregulating the sale of natural gas. The resulting markets made it possible for traders such as Enron to sell energy at higher prices, thereby significantly increasing its revenue. After producers and local governments decried the resultant price volatility and pushed for increased regulation, strong lobbying on the part of Enron and others was able to keep the free market system in place. In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries. In an attempt to achieve further growth, Enron pursued a diversification strategy. The company owned and operated a variety of assets including gas pipelines, electricity plants, pulp and paper plants, water plants, and broadband services across the globe. The corporation also gained additional revenue by trading contracts for the same array of products and services it was involved in. As a result, Enron's stock rose from the start of the 1990s until year-end 1998 by 311% percent. By December 31, 2000, Enron’s stock was priced at $83.13 and its market capitalization exceeded $60 billion. Demise of the company But the firm's success turned out to have involved an elaborate scam. Enron lied about its profits and stands accused of a range of shady dealings, including concealing debts so they didn't show up in the company's accounts. As the depth of the deception...
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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...
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...4-1-2013 A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant Todd Davis John Higgins Recommended Citation Davis, Todd and Higgins, John, "A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant" (2013). Chapter 11 Bankruptcy Case Studies. http://trace.tennessee.edu/utk_studlawbankruptcy/11 This Article is brought to you for free and open access by the College of Law Student Work at Trace: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Chapter 11 Bankruptcy Case Studies by an authorized administrator of Trace: Tennessee Research and Creative Exchange. For more information, please contact trace@utk.edu. A Blockbuster Failure: How an Outdated Business Model Destroyed a Giant Todd Davis, John Higgins Table of Contents I. Introduction 1 II. Background Information 1 a. Business Model 5 b. Key Events Leading to Chapter 11 7 III. Chapter 11 12 a. “The Plan” 12 b. Filing 14 c. Petition Schedules: Liabilities, Creditors, and Assets 15 d. First Day Motions 19 e. DIP Financing 28 f. The Unsecured Creditors Committee 32 g. Administrative Expenses – Professional Fees 32 IV. The § 363 Sale 38 a. Road to the § 363 Sale 38 b. The Motion 41 c. Sale Terms 42 d. Blockbuster’s Business Justification for the § 363 Sale 46 e. Assumption and Assignment 48 f. Administrative Relief Requested 49 g. Creditors Object to the Proposed...
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...Morita discovered that there was an American company already using Teletech as a brand name.[14] The name "Sony" was chosen for the brand as a mix of two words. One was the Latin word "Sonus", which is the root of sonic and sound, and the other was "Sonny", a common slang term used in 1950s America to call a boy.[5] In the 1950s Japan "sonny boys", was a loan word into Japanese which connoted smart and presentable young men, which Sony founders Akio Morita and Masaru Ibuka considered themselves to be.[5] The first Sony-branded product, the TR-55 transistor radio, appeared in 1955 but the company name did not change to Sony until January 1958.[15] At the time of the change, it was extremely unusual for a Japanese company to use Roman letters to spell its name instead of writing it in kanji. The move was not without opposition: TTK's principal bank at the time,...
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...not a franchise, it’s a highly sophisticated interlocking brick system,” says Will Ferrell to his adolescent son in the recently released mega blockbuster hit The LEGO Movie. Yellow, vibrant, educational, and fun, LEGO’s have been around for generations. Created by Danish carpenter Ole Kirk Kristiansen in 1932, and derived from the Danish words “Leg Godt” which means “play well”, LEGO’s have made a remarkable recovery from almost being bankrupt in the early 2000s, to the very much alive and thriving business it is now. Jorgen Vig Knudstorp, who came to be the LEGO CEO in 2004, helped them become the most profitable and fastest growing company in the toy industry besides Mattel. Their products are developed with the upmost care; as stated in their motto: “Kun det bedste er godt nok” which means 'only the best is good enough', and is marketed at children but bought and collected and loved by adult fans as well. LEGO’s have not only stood and passed the test of time, it is also a “psychological tool and a way to relax”, quoted by leading psychologist Jon Sutton, and proven to help children’s play, creativity, and imagination. In the Lego Movie, Emmet Brickowski (The LEGO Movie’s protagonist) uses creativity and intelligent management to save his city of Bricksburg. Coincidentally, the same went for Knudstorp who saved the LEGO Company from almost certain bankruptcy. In the 1990s, LEGO was facing bankruptcy due to a few major reasons. There were a flood of cheap imitators, as well...
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...supply investors with basic financial statements. These statements as we learn in accounting are the fundamental tools through which we communicate a corporation’s financial position. So why was it that a corporation valued as much as $70 Billion at one time would have ever achieved such success without performing basic accounting functions? The CEO, Jeff Skilling’s caustic reply to the question foreshadowed the collapse of a company that had been built on lies and deceit. While the Enron scandal is one of the best known in the history of international business, the reasons for the collapse were built into the company from its very roots. I will begin with an overview of the company and the ensuing scandal, as well as touching on many of the events that led up to the collapse of the company. I will also touch on events that contributed to the company’s inflated stock prices and their unethical and often desperate business practices that undermined the foundation of their business. The aforementioned film, Enron: The Smartest Guys in The Room was an excellent resource as it was primarily historical footage and first-hand accounts from individuals involved with the scandal. (http://www.youtube.com/watch?v=_xIO731MAO4) Enron was founded as a result of a merger of gas companies in 1985. Founded by Kenneth Lay it originated in Omaha Nebraska. Despite promising to keep the headquarters in Omaha, Lay almost immediately moved the company to Houston Texas where they began consolidating...
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...| Why is Microsoft CEO Steve Ballmer stepping down? | Strategic Management BUS4040 Assignment 1 | | | 赵睿10302001432013/10/15 | | Introduction Two months ago (August 23, 2013), there was an announcement from Steve Ballmer, the CEO of Microsoft, declared that he would retire in the next 12 months, which had attracted much public attention because of its sudden. It was neither planned nor as smooth as portrayed. The interview with many people inside and outside the company indicate that Ballmer had not aimed to leave this soon and especially after the recent restructuring of the company that he had intensely planned. However, Ballmer’s timeline had been moved up drastically. The nine-member board, including his longtime partner and Microsoft co-founder and chairman Bill Gates all agreed that it was best if he left sooner than later. It seems that it was due to a number of increasingly problematic issues on the immediate horizon, including a potentially nasty proxy fight, continued business performance declines, and Ballmer’s leadership was becoming a very obvious problem. In this report, I will analyze this issue by the following aspects, which includes the background of Steve Ballmer, the development of Microsoft these years and current situation about the company. Background of Steve Ballmer Ballmer, 57, who came to Microsoft in 1980 as its first business manager, was the first CEO after founder Bill Gates left the post in 2000. Steve Ballmer...
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...| The Enron Scandal | | Introduction Enron Corporation was an American energy, commodities and services company based in Houston, Texas. From the 1990's until December 2001, Enron was famous throughout the business world and was named by Fortune as "America's Most Innovative Company" for six consecutive years. It grew wealthy due largely to marketing, promoting power, and its high stock price. Before its bankruptcy, Enron employed about 21,000 staff in forty countries and was one of the world's major electricity, natural gas, communications, and pulp and paper companies, which claimed revenues of $100.8 billion in 2000. Enron gave the illusion that it was a steady company with good revenue which was not the case, as a large part of its profits were made on paper through a creatively planned accounting fraud. Deep debt and surfacing information about hiding losses gave the company big problems and in the late 2001 Enron declared bankruptcy under the United States Bankruptcy Code. The collapse was followed by a series of revelations on how the executives manipulated Enron's success. The Fraud Schemes The Enron scandal, revealed in October 2001 was a management fraud involving top executives of Enron who deliberately manipulated the accounting structures in order to conceal their losses and debts so that the corporation appeared to be performing favourably. They adopted mark-to-market accounting, an accounting system based on market value, which was then inflated; the...
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...introduced the world's first instant camera, the Model 95 Land camera, marking a landmark moment in the history of photography. In the late 1990s, having sold nearly 170 million cameras, Polaroid was in the midst of a new revolution, both within the company and in the field of imaging. The company was remaking itself and adapting to the changes made possible by new digital technologies. Polaroid continued to extend its reach far beyond the borders of the United States, selling its products in hundreds of countries and manufacturing at foreign production facilities in Mexico, the Netherlands, and the United Kingdom. Between 1995 and 1997, the company's sales of cameras rose 15 percent in Europe, while sales of film there climbed 7 percent. Results from Japan were extremely strong during the same two-year period, with camera sales soaring more than 100 percent and film sales rising nearly 40 percent. COMPANY FINANCES Polaroid reported a net loss of $127 million on revenue of $2.15 billion in 1997, compared with a loss of $41 million on revenue of $2.28 billion in 1996. In 1995 the company...
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... Jason Rudzki Submitted to Dr. Youssef Ahmad Youssef Humber College Business School September 27, 2010 Introduction In the summer of 2011, the co-founder and chief executive officer of Netflix Inc. Reed Hastings, made the decision to separate the companies online streaming service from the DVD rental service. The DVD rental services mails out DVD’s to customers one video at a time and the streaming service allows customers to watch movies and television shows via the internet. Instead of charging each customer a flat rate for both services, as it had in the past, Hastings wanted to charge consumers for each service as its own separate entity. This meant each customer would now have two accounts (instead of one), pay considerably more in membership fees and still receive that same amount of content. Shortly afterwards, on July 12, 2011. Mr. Hastings, publicly announced the changes and informed his customers that they would come into effect in that coming September. In 2010, the business reported revenues of more than two billion dollars and had approximately twenty-million subscribers. After Hastings announced the split, his stocks fell by more than fifty percent from a one time high of more than three hundred dollars per market share. Stocks in Netflix continued declining quickly and before the end of the year, they were down to sixty-three dollars per share. Subscribership also plummeted by more than eight-hundred thousand members. This decline in both the...
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