The Fall of Blockbuster

Olivia Bambara, Julie Feng, Nick Sojka, Cody

Johnston

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1985 — founded by David Cook1992 — Blockbuster is the undisputed video rental leader1994 — Viacom buys Blockbuster for $8.4 billion.1997 — Silicon Valley veteran Reed Hastings founded Netflix1999 — Viacom takes Blockbuster public2000 — Blockbuster takes in almost $800 million in late fees2004 — Blockbuster is at the peak of its powers, with about 9,000 stores globally. 2010 — Blockbuster files for bankruptcy protections in September2011 — Dish Network buys the assets of Blockbuster for $234 million 2013 — Blockbuster announces plans to close its remaining US stores.

History of Blockbuster

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-Blockbuster Owners-founder: David Cook

-Viacom-Stock holders-Dish Network

-Who Blockbuster Owned-Britain’s Ritz

-US Chains Major Video-Erol’s Video

-Employees-Competitors-Customers who are resistant to

change

Stakeholder Analysis

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Forces for Change● Rise of Netflix and

online streaming● High costs related

to having fixed stores

Force Field Analysis

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Forces against change● Past success, strong brand ● Large amounts of revenue● Significant money and

people put into stores

● Management failed to adapt to changing consumer demands-not “in tune” with the environmento Past successes with in-store distributiono Lack of creativity

● Didn’t persist enough to change methods of distribution- “too little, too late”

● Lack of a compelling vision for the future

Kanter’s 7

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Outdated mission & purpose - Convenience store vs. Entertainment Distribution

model

Lack of BHAGs (Collins & Porras)- Potential Netflix acquisition, social media &

customer preferences

Building Company Vision

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1. In what way did Blockbuster fail to perceive the customer experience of watching a movie? To what degree do you think this contributed to their eventual bankruptcy?

2. In what ways could Blockbuster have maintained their niche while adapting to the changing market demands?

Discussion Questions

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