...Letter of Transmittal From: Parul Srivastava To: Chad Rowan, Owner, Video Concepts, Inc., Lexington, North Carolina, United States. October 1,1993 Subject: Recommendation on future course of action to be adopted by Video Inc. I hereby attach the recommendations after analysing present Video Inc.. finances and the course of action to be adopted for the business. The report presents a overview of current problems on Video Concepts, Inc.. The various option available in future have been analysed upon the basic objective of economics that is profit maximization. Based upon the current trend of revenues, it is recommended that you should accept the alternative of hiring someone to manage the business and find a job for yourself preferably in corporate. Video Concepts, Inc Summary Situation Analysis Video concepts is facing stiff competition from Blockbuster ahich has certain adavatages like Problem: Should Chad continue with the current business and if yes should he continue being the manager or hire someone else and find himself some other job Options • Raising price of overnight rental to $2.49 per night • Hiring someone to manage the business and find another job for himself • Sell the business Criteria • Return on time and capital • Future prospects of video rental business • Personal Satisfaction Evaluation of Options Option 1 Option 2 Option 3 Recommendations Word Counts: 350 ...
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...Blockbuster Acquires Movielink: A Growth Strategy? Joao Marcos da Silveira Terra 6/7/2012 Wayland Baptist University BUAD5312 – Strategic Management Summer VC02 Executive Summary 2 Introduction 3 Business and Financial Metrics 5 Business Segments 6 In Store 6 By Mail 6 Vending 6 Download to PC 6 Trends and Forces 7 Cyclicality of Rental Sector 7 The Future of Media and BBI´s Brick-and-Mortar Model 7 Saturation in Kiosk Distribution Market 7 Competition 8 In-Store Rentals and Sales 9 Movie Gallery 9 Online Rentals 10 Netflix 10 Amazon 11 Apple 11 Online Viewing 11 SWOT Analysis 12 Strengths 12 Weaknesses 12 Opportunities 12 Threats 13 Summary 13 Executive Summary Movielink is the leading movie download service offering U.S customers an extensive selection of new and classic movies, foreign films, TV shows and other hard-to-find content. It is a web-based video on demand (VOD) and electronic sell-through (EST) service offering entertainment for rental or purchase. It was created in November 2002, as a joint venture ($100 million investment) of most of the big studios – Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios, Warner Bros., and others on a non-exclusive basis. While it was only available to users in the United States, it was the first company in the world to offer legally downloadable movies from major studios. Today, Movielink is a wholly-owned subsidiary of...
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...View Harry Wayne Huizenga, Chairman, Blockbuster II. Major Problem What steps should Blockbuster Inc. take to ensure the company’s sustainability in the long run? III. Case Facts To determine Blockbuster Inc’s market position and future business strategy, SWOT analysis was conducted and company traits and overall environment categorized as follows: SWOT Summary |Strengths |Weaknesses | |High market share in the video rental industry |Company resources are finite/spreading resources too thin | |High capital used to purchase new companies/products |No clear sense of direction for the future | |Various business units |Over confidence in current market share | |Opportunities |Threats | |Video-rental business is thriving |Stuck in a market promising little or no growth in the future | |Product integration possible through acquisition of related |Other media for home entertainment |...
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...INTRODUCTION In the early 1980’s mom and pop video stores were everywhere and offered varied selection, quality, and pricing schemes. Blockbuster quickly emerged in 1985 and began 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...
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...technology and continue to look into moving into more Video On Demand services. It is recommend to look in to expanding services into video game rentals alongside movie rentals. ANALYSIS Renting Movie And TV Episode Industry Competitive Forces Competition among industry rivals is medium to strong. While they still hold most of the market for movie rentals at this time local movie stores are plagued with financial issues leading to store closures and bankruptcy. They are losing market share to less expensive and more convenient kiosk and by-mail services for physical DVD and the ever increasing consumer move to Video-On-Demand (VOD). Internet movie providers bring strong competition by offering a large variety at a relatively inexpensive price quickly and easily to the customer’s computer, TV or handheld device. Cable companies have also joined the VOD trend offering movies rentals without the hassle of going to the video store but price is relatively the same and variety can be limited. Movie rentals from kiosk centers located in popular locations offer low priced rentals for consumers that prefer the physical DVD’s but currently lack variety. Potential Entry into this market is medium. The initial start-up cost could be prohibitive for companies starting from the ground. For those companies adding VOD to their already established services it is much easier and less expensive. The importance of the suppliers is high. The movie rental industry is in a struggle with the movie industry...
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...environmental forces created for opportunity for the company. Second, it will discuss five environmental forces and trends to influence the company’s marketing efforts and future product offering. Then, this paper will explain what differentiation strategy the company should undertake to encourage their target market over other competitors. Lastly, it will analyze lessons learned from the Geek Squad case study. Environmental Forces Netflix is a DVD rental and online streaming service. The key environmental force created for the company when they first started out is the DVD mail service. Before there was Netflix, customers had to go to rental stores such as Blockbuster to rent movies. One issue that customers would have is the stores running out of the movies they wanted or possibly not even carrying those movies to begin with. Shipping the movie gives customers more time and takes less energy than having to drive to the store to pick out what movies they want to watch. The founder of Netflix, Reed Hastings, foresaw the potential in the rental industry when he started the company. When Netflix first start they were only offered movies through the mail, but by 2007 they added online streaming to their services. Adding the streaming service created a huge opportunity for Netflix to succeed in the movie rental business. Purchasing Patterns...
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... Mission Statement for Video Ezy Page 5 Supply and Demand for DVD Rental Chain Video Ezy Company Objectives Page 6 Company Strategies Page 7 SWOT Analysis Page 8 SWOT Analysis cont. Page 9 PESTLE Analysis Page 10 PESTLE Analysis cont. Page 11 PESTLE Analysis cont. Page 12 Current and Projected Labour Requirements (3-5yrs) Page 13 Current and Projected Labour Requirements (3-5yrs) cont. Page 14 Current and Projected Labour Requirements (3-5yrs) cont. Page 15 Gap Analysis Page 16 Monitoring and Evaluating Workforce Trends Conclusion Page 17 Reference List Introduction: This intent of this Workforce Planning Report is to ensure the correct management of current labour supplies and demands and those for the next 3–5 years and to enable Video Ezy to correctly and efficiently manage its overall workforce. Video Ezy is one of Australia’s best-known and largest names for DVD, Blu-Ray and video game rentals and purchasing in Australia, with both in store and online shopping available. Video Ezy employs 70 people at their head office in Rhodes, Sydney, New South Wales. With the inclusion of 375 franchise stores, over 2,600 people are employed under the Video Ezy banner. Video Ezy has also created synergetic partnerships with the likes of McDonalds, Coke, Virgin Mobile, Pizza Hut and Smiths. In the busiest hour on an average Saturday night, Video Ezy stores serve approximately 100,000 people. Company History and Background: Video Ezy opened in 1983 with...
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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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...Strategy in Entrepreneurial Ventures A case study by, Arun Venkatachalam FT MBA 2009/10 May, 2010 Table of Contents 1. 1.1. 1.2. 1.3. 1.4. 2. 2.1. 2.2. 2.3. 2.4. 2.5. 3. 3.1. 3.2. 3.3. 3.4. 4. 4.1. 4.2. 4.3. 5. BACKGROUND ....................................................................................................................................... 3 Who or What is ‘LOVEFiLM.COM’? ................................................................................................. 3 Why are they considered a high growth entrepreneurial company? ..................................................... 4 Where they are currently? .................................................................................................................... 6 What is the basis for this report? .......................................................................................................... 6 BEGININING OF ‘LOVEFiLM.COM’ .................................................................................................... 7 The Innovative Online Business Opportunity ...................................................................................... 7 The Market Analysis of 2001/2002 ...................................................................................................... 9 Strategic Analysis of the Business Environment ................................................................................ 10 Competitor Analysis ...........................................
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...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 hit movies. Cook recognized if they displayed the movies, provided a large former big hits selection, and set up a computerized system he could provide a higher...
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...CASE 29 j ^ j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j ^ j j - i j j j j j j j j j j j j Video Concepts, Inc. cose wos prepared by John Dunkelberg and Tom Goho,Wake Forest niversity. All rights reserved to the authors and the North American Case Research Association. As Chad Rowan, the owner of Video Concepts, Inc., looked over his monthly income statement, he could only shake his head over how it could have been so much different. In many ways he was a very successful entrepreneur, having started and grown a profitable business. In other ways, he felt trapped in a long-term no-win situation. The question now was what should he do given the current business environment. Basically, Chad had a profitable business, but the profits were relatively small and had stopped growing since a strong competitor, Blockbuster Video, had moved into town. The profits, however, were not enough to pay off his long-term debts and provide him with any more than a subsistence living. In addition, the chances of selling his business for enough to pay off his debts and then start another business were not good. In reflecting on what might have been, Chad commented: I had really hoped to expand Video Concepts into several similar-sized towns within a couple of hours' driving distance from here. The financial projections, 'which had been fairly accurate until Blockbuster arrived, indicated expansion was possible. I thought I was growing fast and had put about as much capital...
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...developing new ways in technology to watch movies as well as purchase them in a competitive consumer environment. In the past decade, Netflix has revolutionized the art of purchasing for in-home movie viewing providing an online phenomenon for the movie rental business. Netflix company strategy and business model has generated a great amount of success with their huge selection of movies, fast delivery, and excessive marketing campaign. Nevertheless, there are some issues underlying their current success that need to be dealt with for future forecasting. Current Issues/Problems Netflix has seemed to master the DVD rental segment of the movie industry. With their extensive selection based product, fast delivery, and wide subscription plan, there is no limit to their success. However, some questions arise with the subject of product differentiation. What happens when technology advances over time and the product changes? If Netflix concentrates too much on their product focus and ignores the future, then a substitute product will take over only in a matter of time. In our current business environment, product improvements are essential and changing rapidly. If Netflix does not plan out the obsolescence of DVD’s then there is no future. The recent introduction of Blu-ray technology has offered a huge advancement in the production of DVDs. Blu-Ray discs offer more than five times the storage capacity than traditional DVDs, and gives the viewer a full HD experience. By 2008, Blu-Ray...
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...Netflix? Contrast the pricing in relation to traditional Video rental stores and describe how it evolved over time in support of Netflix’s changing business strategy. The pricing strategy had a huge hand on the initial success of Netflix. It used a market-oriented pricing approach and set its price based on analysis and research of the target market. Some of the factors incorporated by Netflix into its pricing strategy that contributed to its success were: i. Rent 3 movies at the cost of one VOD rental ii. Eliminated Late Fees / penalty pricing approach adopted by Blockbuster and other rental stores iii. Transitioned from market-oriented pricing to value-based pricing through the introduction of unlimited rentals iv. Movie recommendations to everyone whether / not they subscribed to Netflix services Netflix captured the market for initial DVD player adopters by providing customers with DVD formats that weren’t available in traditional movie rental stores yet. Netflix offered 3 movies for a month at $17.99 while rental stores offered a single hit movie at $18. The approach Netflix took to eliminate late fees and have a movie with the customer at all times helped Netflix capture market share instantly. As the stocking for DVD’s grew more complex, the pricing remained the same but they provided an unlimited rental policy that greatly appealed to customers that were concerned with late fees and limited rentals. Hence as the market share grew Netflix successfully transitioned...
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...in the business with increase in Rental to $ 2.49 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...
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...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 are released. With the use of interactive media and other successful media outlets, Blockbuster should be able to regain the public that it has lost over the...
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