Blockbuster Case Study

1041 Words 5 Pages

The business I chose is Blockbuster. Blockbuster was established in Dallas Texas on October 19, 1985. David Cook is the founder of the business. In 1987 Blockbuster is sold to a trio of investors, including Waste Management Inc. founder Wayne Huizenga, for $1.8 million dollars. In 1992 Blockbuster is the undisputed video rental leader, with over 2,800 stores worldwide. The company’s growth is driven by acquisitions of other retailers such as Britain’s Ritz and US chains Major Video and Erol’s Video. In 1994 Viacom buys the business for 8.4 million dollars. In 2000 Blockbuster takes in almost $800 million in late fees, which accounts for roughly 16% of its revenue. In 2002 Netflix came out to the public
…show more content…
This meant a significant risk of customers started wanting to get the product in different ways.Netflix started life as a mail order movie rental business; with a monthly subscription for whatever movies you wanted from a much bigger library than in store and significantly cheaper distribution costs than Blockbuster. Another reason was because there profit needed to be tied to what there customers value. Blockbuster's profit had to be sufficient to sustain their worldwide stores and staffing levels. As well as their pricing structure reflecting this, their profit also relied on something their customers hated late fees. A significant portion of the revenue that Blockbuster needed to stay in business was a revenue stream that Netflix didn't even charge for, as you could keep their movies as long as you wanted. And finally blockbuster ignored there opportunity in purchasing Netflix in the early 2000s. After Blockbuster closes employees share that they enjoyed working there and one of the perks was that you got to rent 5 movies each week for free. Personally I think Blockbuster going out of business was a great destion but i feel bad for everyone who lost there …show more content…
I do remember not having cable and my mom and dad would always go to Blockbuster for movies. It seemed like then there was a Blockbuster everywhere, the company made it easy for there customers to go out and get there movies. The workers there were always nice to my family we were always at the Blockbuster by my house at the time and they got so used to us the minute I walked in they would grab one of my favorite movies because they new I always got the same movie... As time went on we went to a new city and we still went to the Blockbuster that was out there and yes they didn’t no us but there customer service was still great. I think if Blockbuster would have invested in Netflix they would still be open right now, but because of bad business choices Netflix got the better end of the deal and every Blockbuster closed down.. Personally I think its for the best because our generation is so lazy and no one wants to have to get out of the comfort of there home and drive to a store and have to deal with people. Netflix kind of fixed that problem and gave people what they wanted. When Redbox came out it was accessible outside of every grocery store or shopping center. Blockbuster soon became inconvenient to people and soon just faded away. All good things come to an end at some point and when new and improved things came into place nobody wanted to go and do something they have

Related Documents