The Closing of Blockbuster: A case study project
Southern New Hampshire University
March 3, 2013
THE CLOSING OF BLOCKBUSTER
I. The Shutdown of Blockbuster Stores
a. Blockbuster is closing many of its stores.
b. Blockbuster failed the challenge of its competitors.
c. Blockbuster had to file bankruptcy.
II. The Blockbuster Solution
a. Dish Network purchased Blockbuster
b. Dish Network is down-sizing Blockbuster.
c. Dish Network is giving Blockbuster new direction.
III. Blockbuster needs an innovative strategy.
a. Blockbuster must have an innovative way they market their products. b. Blockbuster must have an innovative way they deliver their products. IV. Blockbuster must invest in its employees.
a. Blockbuster must provide better compensation.
b. Blockbuster must provide a better work environment. V. Blockbuster need to change leadership strategy. a. Blockbuster needs to use Democratic Leadership. b. Blockbuster needs to use Laissez Faire Leadership. VI. Blockbuster must stay competitive.
a. Blockbuster need to network.
b. Blockbuster need to protect its image.
VII. Blockbuster looses to Netflix
a. Netflix creates innovative strategy
b. Netflix beats Blockbuster
The Shutdown of Blockbuster Stores
Blockbuster is closing many of its stores.
Blockbuster has 500 stores remaining in 2013 down from a peak of more than 9,000 in 2004. Decision making is the key and the way the final decisions are made is very important. “Blockbuster experienced a rash of poor business decisions starting with CEO Bill Fields who started promoting the retailer as a (neighborhood entertainment center) selling videotapes instead of renting them, books, CD’s, gift items, and music. After closing 50 music outlets in 1996, the company moved its headquarters to Dallas in 1997, a move that many employees refused to make” (Biesada,A ,2013). A number of group decisions should have been made that included ground level employees. If Blockbuster would have used more democratic leadership and involved the whole organization in its decision making process, I believe they would have came out a lot better. “In 2006 Blockbuster closed 300 stores. In 2007 the company closed 280 stores that were struggling” (Biesada, A, 2013). Blockbuster failed the challenge of its competitors.
“The company spent $30 million dollars to further develop Blockbuster Online. Netflix filed suit on Blockbuster in 2006, claiming the video giant’s online service violates Netflix’s patent on such a video rental system. The two settled their differences in a confidential deal in 2007. Blockbuster still continues to struggle with the competition of Netflix, which offers movies and TV shows for digital streaming in addition to its email order DVD rentals. Then Red Box who offers DVD rentals and digital down-streaming services” (Graser,M, 2013). Had Blockbuster focused on online sells earlier in its glory years the company would definitely be a stronger competitor. A lot of people were fed up with Blockbuster so when Netflix came into the picture, even I jumped at the opportunity to join. I really didn’t like the mail order deal of Netflix but the fact that I could turn the movies in at any given time and not get hit with late fees is what drew me in. Blockbuster had to file bankruptcy.
“Blockbuster filed for Chapter 11 bankruptcy in September 2010, reeling from mounting losses, mounting debt, and rivals that have better catered to Americans’ changed media habits....