Blockbuster Video Analysis

The video rental industry was one of the more growing services retailers in the mid-1990s. However, due to Blockbuster, many rental video companies have failed to compete against this category killer. West Coast Video, Video City, and Hollywood Video, which are among the few and only large competitor’s of Blockbuster in the tri-state area. Many family-owned video rental stores could not compete against Blockbuster’s assortment of videos.

Blockbuster opened its first store in 1985 and has grown to become the world’s number one video chain. Blockbuster is open 365 days a year with 9,800 stores worldwide. Customer base has risen above 50 million in the United States as well as several million more worldwide. The Gallup Organization, known for the Gallup Polls, declared that Blockbuster has 100 percent recognition. Most importantly, 70 percent of the population in the United States lives within ten minutes of a Blockbuster store. Category killers, however, usually attract customers from far distances. Because most customers are ten minutes away, small businesses in competition will fail.

A recent marketing campaign has been the promotion of DirecTV, a digital satellite service alternative to cable television. Also, an alliance with Radio Shack has been in effect promoting new technologies. To compete against the up rise of online rental services, Blockbuster has been testing online rental services which allow customers to reserve and rent videos from specific stores.

The other services retailer is West Coast Video, a Philadelphia-based company that was once a supreme challenger to Blockbuster. West Coast Video was at one point, New Jersey’s largest video rental chain in 1997. That preceding year, the company acquired stores from Palmer Video, Super Video, and Great American Video. It became the fourth largest video chain with close to half of its 568 stores in New Jersey. However, the company has approximately 225 stores to avoid going out of business. This year, West Coast has closed most of its North New Jersey stores, including this analyzed store. The West Coast store has been bought out by Video City, a recent competitor trying to tackle the Northeast market. However, they only operate a small number of stores in the area and specialize in e-commerce. They have no marketing strategies as of yet.

The Blockbuster store is located in Nutley, New Jersey, a...

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... may become a nuisance to a customer.

Overall, Blockbuster, is very appealing, especially the Nutley store. It’s large location is very attractive comparable to East Coast Video location. Blockbuster’s overall domination has 3 Blockbuster locations within ten minutes of each other; the other two are located in North Arlington and Clifton. Another advantage is that Blockbuster members can rent at any location because the stores are all linked together. Movies, however, must be returned to the store where it was originally rented. East Coast Video, on the other hand, has only one other location in Kearny and the stores are not linked.

Blockbuster’s strength has been great service, family values, and moderate pricing as opposed to East Coast Video. However, they are a fairly new company. Video City’s strategy is to control the adult film rental category and attract loyalty within these customers. Their website, however, offers only the sale of videos and does not provide information about the company’s history whereas Blockbuster takes pride in their socially responsible efforts. It’s very hard to avoid Blockbuster because of the availability of products, service, and convenience.