When you look around you see business booming and then you have the ones that were not as fortunate. In a swiftly evolving and progressively intense global marketplace, accurately anticipating market changes and consumer desires is paramount to maintaining longevity. So what is the reason for failure when success is in sight? In this paper we will look at the collapse of a once successful empire known as Blockbuster and the rise and reign of Netflix.
History of Blockbuster
Blockbuster Entertainment Inc. was an American-based provider of home and movie and video game rental services through video rental shop franchises. The first Blockbuster rental shop opened in Dallas, Texas in 1985, founded by David Cook (History Channel, 2014). At the time, most rental locals were small scaled, Blockbuster opened with about 8000 available tapes, a large margin compared to its competitors.
The first store was a success, the company rapidly expanded, becoming the largest in-home movie provider in the world. Soon Cook added investors in the likes of Wayne Huizenga, who embarked the company on an aggressive expansion (History Channel, 2014). By the mid 1990’s, Blockbuster was an established name, at the turn of the century the launch of new competitors in the names of Amazon.com, Netflix, Red box and On-Demand services, Blockbuster faced a new era.
The companies’ mission was to provide customers with the most convenient access to media entertainment, delivered through its multiple distribution channels. The mission was met at its initial stages and its prime, with a clear definition and direction. According to reports Blockbusters vision statement was “At Blockbuster, diversity means valuing differences. It is a corporate value that must be continually developed, embraced, and incorporated into the way we do business." The statement itself gave no clear means; it set no understandable goal that could be comprehended by either employees or customers. The statement lacked tone and inspiration.
Failures in any business can be due to a multitude of reasons. As the company enjoys success, it seemed to ignore that the business environment was changing making it necessary to adapt and improve. In 2010, Blockbuster Inc. filed bankruptcy. The organization went from an extremely successful organization to nothing. Blockbuster the leading rental organization at the time, fulfilling the needs of customers by offering movie rentals from VHS to DVD's and video games and unfortunately for Blockbuster, "In the movie rental industry, technology diffusion and disruption have occurred due to firms such as Red box and Netflix adopting digital and internet based technologies (Randall, 2010). Blockbuster was late to respond simply because top management at “Blockbuster never believed that the new technologies would win the market and delayed the efforts to implement the new technologies," (Randall, 2010). By the time Blockbuster executives realized new innovations of Internet based technology were here to stay, they were too late. Blockbusters leadership decided re-structure and decided "to make corrections to their current business practices rather than trying to build the new competencies and capabilities required to stay competitive in the movie rental industry," (Carr, et al 2010). Blockbuster is a company of the past, officially closing its company doors for good in 2013. Netflix
Streaming entertainment is a fast growing market where Netflix is the leader in business. Netflix is an organization that remains successful despite a trying economy.