Blockbuster Analysis Case

1530 WordsJan 14, 20077 Pages
The Life of Blockbuster History and Background Blockbuster's origins date back to the mid 1980's when the video cassette recorder (VCR) was the new hype and families all over America were quickly turning to movie rentals as a form of in-home entertainment. David Cook, who previously started David P. Cook and Associates, Inc. to offer consulting and computer services, saw an opening in the quickly expanding movie rental business. Eager to start a business, he jumped in making Blockbuster the Wal-Mart of movie rentals offering a wide variety of movies to customers in a family environment with standout buildings and bright lights. From there, Blockbuster growth exploded bringing in external investors and national attention. To…show more content…
Strategy Over time, like any good business, Blockbuster has had to adapt their strategy to the current market conditions and needs. They have gone from Blockbuster Rewards, which requires a yearly fee to acquire points which can be used for free rentals, to Movie and Game Pass, to GameRush stores, which purchases consumer's audio and video titles, to their most recent strategy of Blockbuster Online. Due to the size of the organization, it is difficult to adjust quickly to change. This explains why it took Blockbuster nearly 5 years to respond to Netflix's online video rental strategy. Despite Blockbuster's late entry, the market seems to be responding well to Blockbuster's newest strategy. In the two years since inception, nearly 2 million customers have signed up for Blockbuster online. While this is only a fraction of Netflix's 6 million subscribers, Blockbuster offers other features that Netflix is not able to offer. A couple of these competitive advantages are four in-store rentals each month along with the unlimited movie rentals via mail. This is a clever strategy by Blockbuster because it is an effort to fill their stores again in hopes that people will rent other movies, buy popcorn or snacks, or rent video games. Another competitive advantage held by Blockbuster is their plan to ship movies to customers from their stores instead of warehouses. This will drastically reduce ship times to customers which is a major complaint customers of
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