Blockbuster Case Analysis Essay

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Blockbuster Case Analysis

I. Strategic Profile and Case Analysis Purpose: The Blockbuster firm is a leading provider of rental movie and game entertainment with approximately 8,000 stores. The company operates in the US, Europe, Latin America, Australia, Canada, Mexico and Asia. Blockbuster is headquartered in Dallas, Texas and employs 58,561 people; this figure includes full-time, part-time and seasonal employees. The company recorded revenues of $5,287.9 million during the financial year (FY) ended January 2009, a decrease of 4.6% over 2008. The operating loss of the company was $293.3 million during FY2009, as against an operating profit of $39.1 million in 2008. The net loss was $374.1 million in FY2009, compared to a net loss of
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In-home viewing technology improves and has become cheaper to download movies over the Internet. In-home entertainment is offered through various distribution channels. Blockbuster has taken advantage of this change in the industry by providing Blockbuster Total Access Premium and Blockbuster Total Access Mail; these plans are available to all current and new subscribers to Blockbuster online. Finally, the elimination of late-fees, they have successfully warded off competition from significant competitors, excluding Netflix. C. Competitor Analysis: The chief competitor to Blockbuster is Netflix, an online movie rental subscription service providing services to nearly 8 million subscribers with more than 100,000 DVD titles. The company operates in the US. The company is headquartered in Los Gatos, California and employs about 2,670 people. The company recorded revenues of $1,205.3 million in the financial year (FY) ended December 2007, an increase of 20.9% over 2006. The increase was primarily due to a substantial growth in the average number of paying subscribers for online DVD rentals. The operating profit of Netflix was $91.2 million in the FY2007, an increase of 41.5% over 2006. The net profit was $67 million in FY2007, an increase of 36.4% over 2006. III. Identification of Environmental Opportunities and Threats and Firm strengths and Weaknesses (SWOT Analysis): As a strength Blockbuster kept up with the trends changes and rise in
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