Movie Analysis : The Movie Rental Company Essay

In the brick and mortar movie rental industry, Blockbuster is clearly the leader. With the merger of Hollywood Video and

Blockbuster implemented a new strategy for customers to access their rentals in “five channels of distribution: in-store, by mail, through vending machines and kiosks, online, and at home (direct to the TV)” (DATAMONITOR, 2009). However, this strategy was a reactive approach to the problem produced ten years behind schedule. Wooldridge et al., (2007) stated that Blockbuster should select and adapt their strategy to respond to the fast changing market and maintain a competitive position. This was an obvious failure for Blockbuster. The changes in the market produced a decline in profit at a faster pace than the strategies that Blockbuster implemented to combat these losses.

The first failure of Blockbuster’s strategies, which lead it to bankruptcy, was the negative relationship with their consumers. While Netflix’s chief executive, Reed Hastings, recognized the technology had been grown rapidly and would change the transmission of movie rental industry, Blockbuster’s CEO, James Keyes, believed that consumers would still prefer to the brick-and-mortar rental structure. Thus, Keyes planned to focus on expanding Blockbuster’s stores into various departments

If researched you find that the internal political struggles within the Blockbuster organization ultimately lead to its downfall. Power struggles that stemmed from the change in ownership as David Cook sold controlling his share of Blockbuster to Wayne Huizenga, John Melk, and

Blockbuster Video was a dominant entity of home rental entertainment from the mid-1980s through the end of the 20th century. With thousands of video choices ranging from family to action,

The legacy encompassing the coexistence of blockbuster and independent films are quite interesting and somewhat complex. History shows that at one point the word “blockbuster” had nothing to do with a movie production and originated back in the 1940s. Blockbuster was describing how large bombs can destroy city blocks in Hamburg during World War 11. The term took on new meaning referring to anything capable of public impact. Another illustration of this would be when a hyped play was expected to be very successful and competing theaters were busted and put out of business. Soon the term blockbuster would become a dominant marketing tool in the world of theater and film production representing anticipated hits or big box-office sales. In other words, blockbusters were used interchangeably to the concept of major studios.

The always changing world of technology creates a challenge for many older businesses that once thrived years ago. Americans along with many other countries are becoming centered around immediate gratification and in a way, lazy. Fast is better and right now wins. When Netflix came into the homes of millions, it almost seemed like the end of all other movie rental providers. A change in leadership from a recent buyout has saved Blockbuster and has placed them as a leader once again in the entertainment business. Blockbuster has a new strategic plan that seems to be working, but a look into a

“Never be without a movie”, a slogan that used to be successful for many years. Blockbuster was the definition of “entertainment” itself at this time: Not only the company offered to rent or purchase movies but also it completed the customer experience with horizontal diversification: food, beverages, games etc. It followed the strategy of several business models: Brick and mortar shops, cross merchandising, and also rent rather than buy. Its value creation came from several partnerships with movie / video producers, and supplier of foods supplies. The initial strategy standard was to pay a minimum wage to employees, in order to reduce expenses, but also focus on advertising, promoting the company, developing the store locations etc. The main

Conducting surveys, looking at trends, and studying the advancement of technology and consumerism, the shift in consumer needs would not only be recognized, but also anticipated. Evolving and changing our focus to adapt with the customer and not the industry allows Blockbuster to foresee the impact of movie-by-mail service, online streaming, and movie kiosks. Anticipating these market shifts gives Blockbuster the chance to shift its priority and finances into research and development to establish strong products the new market areas. Understanding whom our competition is, and establishing a competitive product from the beginning, allows Blockbuster to use its name recognition and capital to dominate in new areas of entertainment and diminish any competitor’s chance of becoming successful. We live in a world where there is constant change. New initiatives, improvements with technology, and various tactics help organizations stay ahead of their competitors. Change has to occur in order remain successful in any field. Leaders need to be visionary and guide the organization with superior change management skills.

Additionally these changes propelled the difficulties Blockbuster experienced which made it difficult for them to successfully grow within those situation. Blockbuster was further restricted with mounting debt they acquired over time, and with new competitors on the rise other strategies were required to meet the demands of their customers (Kuzyk, 2010). Not neglecting the fact that Blockbuster made relentless efforts to increase their networks a declining market share due to reduced customer demands within its customary store fronts was evident. Blockbuster also faced challenges with a gap between rentals and their availability for sale (Davis & Higgins, 2013). At this time competitors provided their customers with access to order movies

An amazing store where you can buy or rent movies and video games, established October 19, 1985 in Dallas, Texas, Blockbuster. Blockbuster had over 60,000 stores nationwide with a total of 9,000 employees. In 1987, two years after it opened, Blockbuster won a court case fighting for them to rent out video games against Nintendo of America, Inc. In the year 2000, the founder of Netflix, Reed Hastings, proposed an opportunity to do a partnership with Blockbuster for $50 million. Unfortunately, Blockbuster turned down the partnership and let go a deal that could have been life changing for them. Years go by after the deal was portrayed, then in 2010 Blockbuster went

Blockbuster is the largest movie rental retailer. With its opening in 1985, Blockbuster has pursued an ambiguous program of growth and expansion. Currently, Blockbuster owns and operates over 9,000 stores both domestically and internationally. In addition, Blockbuster franchises about a quarter of its stores. It is important to note that Blockbuster is undergoing a managerial struggle at the present time. The current CEO, John Antioco, and a major shareholder, Carl Icahn, are disputing Blockbuster’s strategy. Mr. Antioco has threatened to resign if Mr. Icahn succeeds at attaining a position on the Board of Directors1. Mr. Antioco believes that Blockbuster needs to develop new strategy to respond to the current market

Blockbuster was too confident in their brand and their reach that failed to see the threat from the online rental business, meanwhile Netflix took advantage of their slow entrance to build a market and leverage on growing technology (DVD) that took off really quickly.

The presence of Netflix and Blockbuster in the movie rental industry has assisted me in developing this analysis of each corporation’s strength, weaknesses, opportunities, and threats as followed:

In this chapter, the researcher is going to explain how the Netflix Company began. I will explore strategies behind the success of the company which captured millions of customers within a few years and became the top provider of streaming content in the US. Then the company decided to expand its empire into international markets. One of their targets is New Zealand which the writer will analyze the reasons why Netflix chooses to invest on Kiwis’ islands as their recent target market. Therefore, this chapter will be three parts, first, Netflix in the United States, secondly, worldwide expansion, lastly, Netflix entered to New Zealand.