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The history of blockbuster
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After watching Charlie Rose’s interview with Jim Collins; where Collins explains his recent book How the Mighty Fall, presented me with an opportunity to reflect over recent companies that were staples in my childhood and early adult memories and now are non-existent. In this paper, I will look, analyze and relate Blockbuster Video and their history to Jim Collins’ five stages of an organization.
Stage 1: Hubris Born of Success
In 1985, Blockbuster opened its first store in Dallas, Texas. After the first few stores opened, founder David Cook built a six million dollar warehouse, which could pull and package multiple stores in a day. Blockbuster’s ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. Blockbuster had instant success. In the early 1980’s and 1990’s Blockbuster put neighborhood mom and pop video stores out of business by offering better selection and convenience. However, success like that enjoyed by Blockbuster can foster arrogance. For Blockbuster, arrogance meant they believed they could do anything within their stores. For example, Blockbuster purchased Sound Music and Music Plus chains. This move took Blockbuster from movies to music. Secondly, this Blockbuster Music meant they were no longer renting now they were selling.
Stage 2: Undisciplined Pursuit of More
According to Jim Collins, the undisciplined pursuit of more is reckless behavior, which sets the company at great risk even though their stock continues to climb. In my opinion, this was evident with Blockbuster as they decided to expand into everything entertainment and away from their ...
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...rp decline to their public-investors flee in all directions and, as a result, the company’s stock falls sharply.
Stage 5: Capitulation to Irrelevance or Death
The final phase according to Jim Collins is capitulation to irrelevance or death, which is growth declines and the company’s stock, is no longer popular. Unfortunately, for Blockbuster, a once thriving and growing retail movie rental store, which previously had taken down its competition entered this phase and would quickly lead to the company’s death. Satellite TV distributor Dish purchased Blockbuster at an auction in 2010. Immediately, Dish began to close retail locations. Most recently, in November 2013, Dish announced that it would close all the remaining company owned stores. In addition, Blockbuster’s DVD by mail and online programs would cease operations, too. As a result, Blockbuster died.
With any corporation there is always room for improvement or an opportunity to eclipse your adversaries. When you look at the SWOT analysis chart for oppo...
This formal report will show the history of Staples and Circuit City. Why did Staples is still in business as of today and why is Circuit City out of business? What were the business model or strategy used by Staples, and the strategy used by Circuit City? This report will analyze the history, business strategy, and financial history of the companies. The case also highlights the importance of sound strategic business decisions, target marketing, and customer input. Moreover, the case points to the need for a retailer in such a competitive marketplace, with both brick and online competitors, to find its competitive advantage and adhere to it.
“Stock of the online DVD rental company was up more than 15% in early morning trading Thursday. Netflix increased their forecasts for both revenue and total subscribers today, trying to compete with powerhouses like Blockbuster and Wal-Mart. The increased forecast stems from a slew of new subscribers that have invested in the service after a price decrease from $21.99 to $17.99 last month. Despite the increases in revenue and subscribers however, some analysts feel that the business model is “fatally flawed” and the company may fall by the wayside due to competition from the aforementioned retail and entertainment powerhouses.” Investors Guide reported this.
...icial Eye to create in-store cinema venues’ [online] screendaily. Available from http://www.screendaily.com/hmv-curzon-artificial-eye-to-create-in-store-cinema-venues/5000273.article [accessed on the 30-3-2014]
The book begins with Collins describing the research that he and his team performed in order to write this book. The main factor of the selection process was the “period of growth” and if these companies were able to maintain monetary success over a long period of time (Collins, 2001). Once the selection process had been completed, the organizations that were selected for continuation in this process included but is not limited to: Walgreens, Wells Fargo, Gillette, Fannie Mae, and Nucor.
The eighties prompted change as well as the opening of Best Buy’s first superstore. During 1983, a new corporate name was approved and the Sound of Music Company became known as Best Buy Co., Inc. With mounting consumer support Best Buy continued its road to expansion by opening an additional five stores. In 1985, the newly named company was being publicly traded under the symbol BBY. The late eighties brought forth additional change for the continuously growing company. Best Buy adopted a new concept in retail merchandising with the opening of massive superstores. The new concept shifted the placing of all inventory on the sales floor and hiring a specialized staff of non-commissioned service representatives (FAQ). Such adaptations have fueled the company into progression and continued to promote the company’s corporate vision of “Making life fun and easy”(Fact Sheet).
Nardelli was brought in when the company needed to focus on the cost side of the equations when sales were growing. However his reputation suffered when Home Depot's smaller archrival, “Lowe's Companies, soared more than 200% since 2000, while Home Depot's shares declined 6%”.In addition, The organization never really embraced his leadership style. The company needed a more innovative and constructive leadership. Nardelli came in with new ideas for change, the employees did not have the desire for transformation since they did not feel the need for change and their morale was good. He believed that managing by metrics was the best way to guarantee fairness in judging a person’s performance. When Nardelli acquired control, the store managers felt that they lost their autonomy and independence. This led to the failure of unification of commitment and enthusiasm of his
When large sums of money are at stake, many companies bend and flex to their limits to guarantee defeat over the competition. Sometimes they take a loss in one area for a gain in another area. There is a cause for every action the company makes, and in return for their action there is an effect. Although the effect can sometimes be pre-determined, no one is really sure what the outcome is going to be until the time comes.
The most important part of Disney’s long-term success is due to its key strategic choices and incorporation of various diversification strategies. Disney created value mainly through “vertical integration” of its business lines, especially through the concept of forward integration. For example, Disney integrated production of movies and the final distribution in cinema’s or on television, especially through its acquisition of ABC in 1995 (1, p.6/7). Through this acquisition, Disney was able to extent its boundaries quickly and gain access to a wider lev...
In 2011, the electronics retailer lost approximately 40% of its market value and it is still slowly on the downfall until this day. I have also come to realize that Best Buy has more stores in the world than it can operate.
Gamble, J., & Thompson A. A. (2013). Redbox's Strategy in the Movie Rental Industry. In Essentials of strategic management: The quest for competitive advantage (pp. 295-303). New York, NY: McGraw-Hill/Irwin.
...ization with a solid infrastructure. Since 1930 it has consistently expanded and is among the most prosperous supermarkets in the U.S. Through its research, employee programs, technological incorporations, adaptations to consumer preference and psychographics as well as its marketing strategy with respect to competition, Publix has successfully created an environment “where working is a pleasure” and where shopping is a pleasure.” With competition constantly growing, it is essential to keep on top of the global business community and market environment to have a leg up on competition and provide the highest customer value.
7-Eleven Inc. is one of the leading chains in the convenience/ retail industry. 7-Eleven was founded in 1927 in Dallas, Texas. It is the world’s largest mover and expanded faster then any of the convenience store. It also has many stores with gas stations that are cheaper price then the competitors. (http://mbacase.blogspot.com) The name 7-Eleven was originated in 1946 because the stores were open from 7am to 11pm. 7-Eleven has changed vastly after they started offering customers service 24 hours and seven days a week. It has now become the one stop shop, where customers can get their products quickly. (http://franchise.7-eleven.com)
For this assignment, I used Walmart as an example for an organization that is a major player in the U.S. economy. They have been in operation since 1962, and their services are many, including retail, groceries, electronics, and home improvement. Walmart is considered the largest among all retailers, so it truly belongs to the retail industry. They do, however, face many challenges from industry competitors, such as Target, Big Lots, and Costco. Mr. Sam Walton (Walmart’s founder), however, has earned incredible success for Walmart in the retail market with an ever-expanding customer base. He started his business back in 1945 from a branch of Ben Franklin Stores, with a focus on selling products at lower prices to get higher-volume sales at lower-profit margins.
In conclusion, the vast technology change opens many opportunities for Netflix to grow. By assessing the market environment and challenges, it enables Netflix to overcome the obstacles to remain as the market leader. To achieve the future growth, Netflix should implement both strategic and tactical approaches to compete with others. The strategic and tactical business plans for Netflix are improving content libraries, developing more partnership with production firms, and staying with the low-pricing strategy.