Final Paper (Rough Draft)
Blockbuster LLC. Goes Bankrupt
With technology changing everyday, businesses are changing how they do business everyday now as well to keep up with technology. As we discuss more about technology, we discuss the company called Blockbuster LLC. Blockbuster was a company where consumers bought and rented movies and video games. Blockbuster owned and had franchised stores worldwide and hit its peak of success in 2009. Blockbuster was an international company with over 900 stores in 17 different countries. Before Blockbuster had filed for bankruptcy in September of 2010 (McCarty). The fun loving family store to rent movies and video games had fallen and lost millions of dollars due to competitors like Netflix. The question that most consumer’s asked was what happened to this company and why did they start closing down stores?
Blockbuster’s Downslope History Blockbuster was at one point a great company to work for. Blockbuster had 60,000 employees at one point and they strategized on diversity in their company. Diversity played a large role in the blue collared company because it ranged from college students to adults that would work at these stores. Most film lovers wanted to work at this type of company because you enjoyed great benefits, health, medical, dental, and even free movie and game rentals (Collins 345). As the employment of Blockbuster grew, the stores came up rapidly around the world and people could rent movies as they provided a great service and had multiple copies of certain hot films. In 2009, Blockbuster hit it’s peak as a successful company in the United States with tons of stores and a lot of employers that enjoyed the company, but Blockbuster started seeing a move in technology that created a downslope. With poor strategic planning and management, Blockbuster lost practically everything within months and loss millions of dollars in revenue (Mandell). The reason for this was because the market for renting movies and Internet drove competition. The other reason for the failure of Blockbuster LLC was due to poor management and decision-making was centralized and not decentralized to Blockbuster’s employees as the company declined in revenue (Youtube).
Blockbuster’s competition came to be known as Netflix and Red box. Red box is a company that allows you to rent any DVD you want for a dollar from a small kiosk that took your credit card and the video must be returned within 24 hours. It was convenient to consumers who were at the grocery store and made one less errand to run. Netflix was another company that developed a system of unlimited renting of one DVD. You signed up for $7.99 a month and you rented as many dvd’s as you wanted, but only one at a time and it was mailed to your door step within 24 to 48 hours . The other option Netflix had was streaming the movies and TV shows online where you were able to watch on the go from your iPhone, laptop, and even on your Xbox or PlayStation for those who enjoyed playing games on their consoles. They could now watch movies online on their consoles on the big screen at home without leaving to the video store to rent a movie (Falcone). With the rise of competition, Blockbuster needed to react quickly, but they could not compete with their competitors. One their behalf, their was a very poor strategic plan and the management of the company did not make a quick enough decision. When Blockbuster released its online movie section, and the delivery at home for games and movies, it was a good concept because you could drop off the rental at any store, but the cost was too expensive. Blockbuster total access at one point cost consumers $34.99 a month (Falcone). With poor strategic planning and management, Blockbuster suffered a huge hit in the market and lost millions of dollars forcing them to go bankrupt and be bought by Dish Network in 2011 (Mandell). With…