The Blockbuster Inc. is an American based chain VHS, DVD, Blu-ray, and video game rental stores. This business is on chapter 11 bankruptcy as of January, 2010. At one point, there were over 5000 stores in the U.S. and 17 countries worldwide (Holloman, 2013.) The reason they went out of business were of the competition from other video rental companies as Netflix, Redbox, Hulu and the internet. By using the Blockbuster Swot analysis, it will show their strengths, weaknesses, opportunities, and the threats.
Some of the strengths were the Blockbuster lead market share of online rentals. They also were all the rental low fixed costs. At the same time, it was the world’s largest selection DVDs. The weaknesses cannot control most significant expense is the shipping expenses of the product. Next is the distribution time this was because of all the revenue that they have been losing by the competition. Watching instant feature only allows a small selection of DVD’s. Then the opportunities an online distribution will be easier on the website that can be watch on any computer or DVD player. The company will not lose any business on being the rental late to the costumer. Blockbuster found that having video game rental and expanding was a good idea because the costumer can have all the choice to choose what to get. Last is the threats of the business some are the rising of the cost of a stamp for the costumer to return their rental. The online digital distribution like Redbox, ITunes also provides the rental of movies and games to costumers.
The strategy used by Blockbuster were to sell its stock of video games and movies before they shut down in order to maximize their profits before going out of business.
Holloman, T. (2013, Fall). Blockbuster Swot Analysis. Business and Management
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