Environmental Impact Analysis: Analysis of Blockbuster Llc

Topics: Renting, Vending machine, Strategic management Pages: 4 (1138 words) Published: September 16, 2012
Blockbuster revolutionized the video rental industry. Founded in 1985, by David Cook, the company became the leader of the video chain industry by 1988 (Wooldridge, B. R., Matulich, E., & Riddick Jr., J. C. 2007; “First Blockbuster,” 2012). However, by September 2010, Blockbuster filed for section 11 bankruptcy (Ahmed, 2011). The external changes in the market forced Blockbuster to reassess its business model and ultimately lead to the bankruptcy decision. An analysis of Blockbuster’s organizational challenges identifies failure in risk response and planning, thereby impacting performance, process, growth, and personnel prior to implementing new business strategies. Blockbuster failed to appropriately assess and respond to the impact of external changes in technology, competition, and market demand. Blockbuster relied on a strong brand name and market presence to carry their business model. However, technological advancements in video file sharing, including piracy, video streaming, and on-demand and instant viewing options from cable companies have nearly eradicated the memory of the Blockbuster way of life. Customers preferred to save their money and used services that relied on better technological advancements. In 2007, Blockbuster’s external threats encompassed a high level of debt, falling revenue, geographic constraints, and strong dependence on the success of the US market (DATAMONITOR, 2007). These statistics show the negative impacts, from a technological standpoint, only nine years after the launch of Netflix who has become Blockbuster’s strongest competitor (Wooldridge et al., 2007). The failure to assess the market changes in technology provided an easy alternative for customers to shift their loyalty and patronage to companies such as Netflix and Redbox. Blockbuster failed to appropriately support their position as leader in the video rental industry. The opportunity to integrate technological changes was available to Blockbuster prior to the...
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