Abel De La Cruz
Table of Contents
SECTION 1: INTRODUCTION AND HISTORY TO DATE4
SECTION 2: THE ENVIRONMENTAL THREAT OPPORTUNITY PROFILE (ETOP)6 Industry Analysis6
Competitive AnalysisError! Bookmark not defined.
NetflixError! Bookmark not defined.
Movie GalleryError! Bookmark not defined.
Time WarnerError! Bookmark not defined.
HastingsError! Bookmark not defined.
Customer AnalysisError! Bookmark not defined.
External Threats and OpportunitiesError! Bookmark not defined. SECTION 3: THE STRATEGIC ADVANTAGE PROFILE (SAP)14
Per Share Data17
Common Size Income and Balance Sheet – Analysis18
Strengths and Weaknesses20
SECTION 4: STATEMENT OF THE MISSION22
STATEMENT OF CORPORATE OBJECTIVES24
SECTION 5: STRATEGIC ALTERNATIVES27
Alternatives with Advantages and Disadvantages27
XM or Sirius Blockbuster Movie Radio Station27
Acquisition of Redbox/Creation of Bluebox28
Support Both Blu-ray & HD DVD Movies29
More Blockbuster Exclusive DVDs and Video Games.30
Coupons and Deals31
Video on Demand & Pay-Per-View31
SECTION 6: IMPLEMENTATION OF STRATEGIES33
SECTION 7: CITATIONS FROM OUTSIDE SOURCE MATERIALS36
Section 1: Introduction and History to Date
Blockbuster Video is the world’s largest video rental chain. It currently has over 8300 stores in more than 20 countries including Mexico, the U.K. and Australia. Its customers rent over a billion videos, games and DVDs each year. The company is ranked #410 on the Fortune 500 list, better its top competitors. The company is based in Dallas, Texas and trades on the New York stock exchange under the symbol BBI. In 2006, its sales total $5,523,500,000, more than Hastings, Movie Gallery and Netflix combined. Blockbuster Inc. is by far the industry leader, setting the standard for video retailers and merchandisers’ worldwide. Showing its willingness to adjust to industry trends, Blockbuster recently introduced an online renting program that has exceeded their expectations. BBI has also separated itself from competitors when it announced a four-year deal had been reached with The Weinstein Company giving them exclusive rights in the US to all movie releases.
Blockbuster was established by David Cook in 1985 and opened its first store in Dallas, TX that same year. In 1987 Entrepreneur Wayne Huizenga purchased the company. Over the next few years the company would grow enormously with acquisitions of many retail chains including Major Video, and Erol’s (the 3rd largest video chain at the time) increasing its stores to over 1,500 by 1990. Blockbuster became the largest video store in the U.K. in 1992 with the purchase of Cityvision. It also ventured into the music retail industry that year introducing Blockbuster Music and acquiring several music store chains.
In 1994, the company was purchased by Viacom for $8.4 Billion and formed a new division called Blockbuster Entertainment Group. Huizenga left the company shortly thereafter. The next few years would prove trying. Several poor business decisions coupled with executive departures left Blockbuster searching for a new direction. Enter Bill Fields, a former Wal-Mart exec. Who began to promote the company as a “neighborhood entertainment center” focusing on selling videos, books and music. It became apparent that this was not the right direction and Fields resigned that same year. John Antioco replaced fields and quickly changed the focus back to rental operations. Antioco made an unprecedented move when he forced movie studios to begin revenue sharing. Before, videos for rental...