Prof. Eric Heard
Kaleah Daniels, Tameka Pritchard, Misty Vathis, and York Wilborn
May 25, 2015
Abstract Team E will discuss analyzes Blockbuster, Inc., a video rental company that failed and comparing it to a successful company Netflix. Team E will also discuss leading organizational change at including the role of politics and power in businesses.
Objectives, Values, Mission
Blockbuster Inc. was a global business with 8,000 brick and mortar stores. The stores offered movie and game rentals for home use by consumers. Blockbuster identifies its vision as to be a complete source for movies and games and summarizes its mission as: to grow our core rental business while continuing to use our brand, our massive database, our stores and our studio relationships to deliver an even broader array of home entertainment to both existing and new audiences. Blockbuster tries to satisfy customers’ needs of renting movies and games, as well as buying and trading them. Blockbuster’s vision was too narrowly focused. A more broadly defined theme, like connecting viewers to films and games they’ll love would have been better ("Why blockbuster failed," 2010). Blockbuster did not understand the business it was in. They thought they were in the entertainment distribution business but it was actually more to do with the retail customer experience (Baskin, 2013). Blockbuster failed to see the big picture and recognize the Hollywood’s box office receipts were failing yet consumers need something to do with their time (Baskin, 2013). The company faced new competitors with different offerings such as Netflix and Redbox. After 2000 cable and satellite companies offered video on demand movies, online rentals were available, and retailers such as Wal-Mart and Target were selling affordable movies and games. Company leadership attempted to change with the market demands but in most instances the strategies were not fully implemented or not implemented swiftly enough to remain competitive.
Organizational Behavior Theories The organization made many mistakes over the decades. It would have been easy to predict the eventual downfall as their vision and mission was not clear and company strategies were never carried out nor shared with the employees. Blockbuster was not sufficiently forward thinking and did not see the threats from outside forces. When they did realize the threats from competitors they were slow to react. They changed their business model several times over the years but did not properly plan, communicate, and execute the new strategies during each transformation period. With each ensuing transition, the company appeared to be desperate and grasping at the success that came so easily to them in the early years.
Role of Leadership Blockbuster has changed owners and leaders many times since inception in the early 80’s. The company was the brain-child of David Cook who opened the first store in Dallas in 1985. The company was purchased by Viacom in 1994 and leadership, now under Wayne Huizeng, committed to diversification and heavily invested in the merger. Blockbuster began a downward spiral and shareholders lost confidence as the company struggled to support Viacom. Over the next decade the firm was led by several CEOs with differing visions and strategies. In 1996, Bill Fields changed the store image to an entertainment center offering toys, books, CDs, magazines, and snacks, as well as renting movies and games. The “convenience store” feel was not successful and stock continued to decline. In 2003-2004 under the leadership of Antioco, Blockbuster offered customer’s an in-store membership allowing unlimited rentals. Antioco’s next attempt to resurrect the business included his vision to transform the stores to a place where you could rent, buy, or trade movies and games (Blockbuster Inc.). These many