...Business 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...
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...Failure Analysis/ Change Strategy Danyel Spencer LDR/531 May 12, 2014 Mr. Ricky Owen Failure Analysis/ Change Strategy The organizational behavior basically predicted the failure of the Movie Gallery Corporation. The company begins operation in Dothan, Alabama with one store and quickly grew to five stores within the next few years. The company then embarks in diversifying their business by selling franchise rights. In the new found success the company decided to buy back these franchise stores to continue the growth of the company. The organization behavior identity became one of growth without the market research and development that would have provided them with the information that would have assist them in their continue desire to grow. The company continued to acquire other video chains and opening new stores, when their focus should have been on the changing market environment. The leadership failure to monitor the evolution of the market and poor organizational strategic planning, force the company to encounter financial difficulties. In September of 2007 Movie Gallery had to close five hundred and twenty stores, which they had four thousand and five hundred stores at the time. Within a month of the closing of the five hundred stores the company filed for chapter eleven bankruptcy protections under the United States Bankruptcy Code. (Wikipedia, 2014). Stock prices drop to all time lows which unfortunately lead to the company being liquidated to settle claims...
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...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 within a specified time frame. | Opportunities * Increased...
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...were enthused about being able to watch many movies for an economical monthly price, and movie buffs who wanted access to a very wide selection of films. SWOT Analysis Strength: * Netflix is the world’s largest subscription service for streaming movies. It had attracted 14 million subscribers as of April 2010. * Netflix has the fastest delivery time compare with any other online DVD rental companies. As of 2010, additional improvement in Netflix’s distribution and shipping network had result in one-business-day delivery capability for 98 percent of Netflix’s subscribers * Netflix has no late fees and no due dates which eliminated the hassle of getting DVDs back to local rental stores by the designated due date * Netflix had been highly rated in online retail customer satisfaction by Nielsen Online and ForeSee/FGI Research. Weaknesses: * Netflix accesses only to internet users * Subscriber cancellations are increasing from 3,113,000 in 2006 to 6,444,000 in 2009. (To grow its subscriber base, Netflix should attract new subscribers as well as avoided cancellation.) Opportunities: * As the result of growing demand of streaming video, online movie rental is rising. Netflix has a large capacity to attract more subscribers. * Expansion into foreign markets * Price for wide-screen HDTVs had been dropping rapidly, and picture quality...
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...Discuss this product or service in terms of its current target market demographics using U.S. Census Data. The product/service I chose is in store movie rental and purchase. I.e. Blockbuster Videos. While DVD sales declined for a third straight year in 2009, consumer appetite for viewing movies at home remains very healthy as new physical and digital services for buying and renting movies gain in popularity. The proliferation of movie rental kiosk machines over the last year was probably the most visible sign of consumer interest in viewing movies at home. To understand the impact of rental kiosks and other movie services on household disc purchasing (DVD and Blu-ray), a survey was fielded to panelists who were identified as disc buyers and asked them to report their movie transactions from channels not tracked by scanning. This included rental transactions (both physical and digital rentals) and downloads. One finding from the study was that average disc purchasing (buy rate) among households who also rented movies on physical DVD or Blu-ray declined in 2009 at a steeper rate compared to the average for all disc buying households. The buy rate among households renting a movie on DVD or Blu-ray declined by -11% in 2009 vs. -7% among all disc buying households. Survey results indicated that 34% of these renting households had rented a movie from a kiosk. In addition, households renting from a kiosk are increasingly turning to kiosks to rent movies with 63% reporting that...
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...Team B - Business Failure Analysis Jeffery Rhymes, Terri 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...
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...largest movie rental chain” in the Movies industry around the world (Biesada a). According to Rourke, Rothburd and Stansell (2006), Blockbuster mainly focused on “providing in-home rental, retail movie, and game entertainment”. It created 9,100 video stores and provided services to almost three million of customers in America and 24 other countries (p. 74). In 2010, the company filed for bankruptcy since it failed to adapt new technology in their strategies, and “was sold to satellite TV service provider DISH Network in 2011” (Biesada b). Blockbuster used to have so much power in the movie rental industry until Redbox and Netflix have come to the market. One of Porter’s five forces is needed to mention here is the buyer power. After Redbox and Netflix became really serious competitors of Blockbuster, buyer power is high. There are many options for buyers to choose from and they are in the “driver’s seat”. Since the price war has become so competitive, the price is an important factor for consumers’ decisions. Netflix offers a monthly payment of 7.99 dollars with unlimited choices of available movies and TV shows on demand while Blockbuster charged people more including the late fee and limited time of rentals. This is why the switching cost is low if customers change from Blockbuster to Netflix or other movie rental companies. The next one is supplier power. For Blockbuster’s industry, supplier power was high, as well. In this case, the studios have power in the market because...
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...Netflix (discussed above), the largest online DVD rental service in the U.S., offers a flat-fee DVD movie rental service that, by 2007, was serving over 6 million subscribers from its collection of 75,000 titles.32 Subscribers can use the website's browse function to search for movies by genre, and use an extensive movie recommendation system based on other users' ratings to add to their ordered list for delivery via mail. At its initial launch, the Netflix business model was based on a pay-per-rental service, but this initial pricing model did not succeed, and the company almost failed. It was clear to management Netflix had to rejig its business model and, between September and October 1999, it reinvented itself with a subscription model (the ‘Marque Program’). It ended its pay-per-rental model entirely, and evolved the monthly fee program to allow subscribers to rent any number of DVDs per month (although only a limited number at any one time). The model was supported by a system of regional distribution centers which ensured next day delivery to over 90% of subscribers. Clearly, it took a while to be able to ascertain the right price points and the manner of pricing that was most acceptable to the customer base for its new service; but as Netflix management figured out viewer convenience, wants and willingness to pay, it adjusted its business model accordingly. This ability to perceive and adapt saved Netflix and laid the foundation for its growth and development: by 2006...
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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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...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 of revenue. His wife a movie fan suggested getting into the movie rental business. At the time rental stores were small, specialized, and inefficient. These stores were mainly family oriented stores that provided few former big...
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...buying every small store they could, becoming the de facto sole franchise for movie rentals. This changed in 1999 when Netflix first began their DVD by mail service. Netflix rentals allowed viewers and movie watchers to rent movies from the comfort of their own home. Additionally, the customer wasn’t penalized for returning the movie late. The years that followed produced a long, protracted battle that Netflix appears to have survived on top. That being said, both companies made significant mistakes and have lost millions of potential customers in the process. In this paper, a brief history of each of the company will be presented, a diagnosis of the major problems, analysis into these problems, an evaluation of potential solutions and finally, recommendations for Blockbuster and Netflix to be able to address their problems. ANALYSIS Scott Cook founded Blockbuster Video and opened the first store in Dallas, Texas on October 26, 1985. Later bought by entrepreneur Wayne Huizenga, Blockbuster Video grew to over 4,000 stores in the mid-2000’s and earned the spot as the number one video rental store in the country. Blockbuster made frequent changes to their business model, by first adding video games; later music was added. In 1993, Viacom purchased Blockbuster for $8.4 billion dollars but by 2006, they were only worth $500 million dollars. In 2004, Blockbuster launched their online DVD rental store, primarily to compete with Netflix, which was founded in 1998 and had built...
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... 1. To begin with, at a first glance, Blockbuster and Netflix may be considered two quite identical firms, operating in the movie rental industry. Therefore, it could be inferred that their business models have many similarities, yet, that is not the case. Their core differences are most obvious on their respective levels of value propositions, resources, and the profit formulas that each company has adopted. Firstly, Netflix’s initial idea behind their business model was to become providers of a better home movie service, which become feasible, in 1997, with the introduction of DVD technology. On the other hand, Blockbusters, a well-established company since 1980s, continued to follow the traditional retailing outlet style. A basic difference is the resources of their business models. In 1998, a year after its founding, Netflix boldly adopted a very innovative attitude by launching a website while simultaneously operating online. Thus, Netflix targeted the revolution of new age technology adopters (purchasers of DVD players), while Blockbuster’s main target group was wider, focusing on anyone who decided to watch a movie, especially last minute. The two companies’ profit formulas are different, with Blockbuster’s following the common charging system (a fixed price for every movie rental and additional charges for delayed returns), whereas Netflix, in its early uprise and foundation of its business model, implemented a subscription...
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...152111057 Elisabetta Baccos | 152110151 Filipe Estrela Pires | 152111065 Mª Margarida Maury | 152111049 14th October 2011 INDEX INTRODUCTION Page 2 INDUSTRY INDUSTRY SUCCESS FACTORS PORTER‟S FIVE FORCES Page 3 Page 3 Page 3 NETFLIX, THE COMPANY PROBLEMS FACEBOOK BLOCKBUSTER Page 6 Page 8 Page 9 Page 10 CONCLUSION Page 11 RECOMMENDATIONS Page 12 EXHIBITS Page 14 APPENDIXES Page 18 1 INTRODUCTION Netflix entered the video rental industry in 1998, being pioneer on the online delivery channel. They were the first conceiving the digital format that was able to faster the delivery process at the same time it abolished several costs related to the physical points of sales. Being pioneers and developing technologies on which they had patents over could initially be seen as a competitive advantage. The fact of being the first ones operating under this format permitted them to come up with several services before competitors, as the streaming video, the disc rental, the original programming and the household profiles. Not only for being pioneers, but also for the valuable services offered, at accessible prices and with high variety of content, the image among consumers about Netflix was constructive. The share of mind among users was on a general perspective positive and of satisfaction relating to the services they were paying for. Netflix had a great brand awareness and in a positive sense. However, more recent happenings are changing...
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...because the case was written in November 2007 and at that time BlockbusterInc. I would prefer to sell the shares of Blockbuster Inc. because their management made a lot of wrong decisions in the past, which still affects the market share and the outlook of the company. We think that it was a big mistake to underestimate the importance of entering the online DVD retail market as soon as possible. This decision was a perfect example of marketing myopia because it wasn’t very customer orientated. They had seen themselves in the video retailing business but they are in the entertainment business and they under-emphasized customer needs and wants. And if you look at the stock quotation of Blockbuster Inc. you can see that there is a peak in 2002 (fifth consecutive year of same-store sales growth; IPO of Netflix) and after that the share price decreases significantly until today. Failures in the management stopped their growth and that‘s why Blockbuster Inc. is a perfect example for marketing myopia. If you look at Netflix the situation is completely different. Their management didn’t make the same mistakes. They are very customer oriented and they changed their marketing strategy to satisfy customer needs and facilitate the access to a huge personalized movie library even if the customer isn’t very familiar with the Internet or the “online world”. Just looking at the marketing strategy (customer oriented; no marketing myopia) you must come to the conclusion: Buy! But before buying...
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...Officer Jonathan Friedland, Chief Communications Officer Bill Holmes, Chief Business Development Officer Neil Hunt, Chief Product Officer David Hyman, General Counsel Patty McCord, Chief Talent Officer Ted Sarandos, Chief Content Officer David Wells, Chief Financial Officer August 4, 2012 Through this report, our consulting team has taken the opportunity to analyze and provide recommendations for future domestic business strategy of Netflix. As expressed in the company’s founder’s conference last October, we would like to help you build upon your stated vision for the future including: • Becoming the best global entertainment distribution service • Licensing entertainment content around the world • Creating markets that are accessible to film makers • Helping content creators around the world to find a global audience We would also like to follow the nine values you use to guide your company: • Judgment • Productivity • Creativity • Intelligence • Honesty • Communication • Selflessness • Reliability • Passion In this report, we will address the following issues to provide a foundation for overcoming Netflix’s domestic challenges: I. Competitive Dynamics A. Key Competitors B. Competitive Response II. Strategic Management/Competitive Issues A. Key Strategic Issues B. Strategic Goals C. Stakeholders D. Measuring Success III. Recommendation for Action We believe that by assessing the competitive environment, analyzing strategic...
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