Blockbuster along with analysis

Write a case study of an organization’s failure story and develop your winning strategies based on the knowledge you learned from the book Winning Decisions and the course slides. You can pick any failure case of a company, project, government policy, or product that you want to develop winning strategies to turn the failure to a triumph.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

1
MANAGEMENT
Executive Summary
The report throws light on analysing the different kinds of issues and challenges which were
faced by Blockbuster in the market and it affected their growth prospects. In the current
business environment, it has been noticed that there are different issues which led to the
failure of the success of the company and Netflix was the main attraction that helped them in
improving their growth prospects in a suitable manner. In such scenario, the company could
have implemented the winning strategies which could have helped them in improving their
presence in the market effectively.

2
MANAGEMENT
Table of Contents
Introduction................................................................................................................................3
Overview of Blockbuster.......................................................................................................3
Analysis of Failure of the Company..........................................................................................3
Development of Winning Strategies for Turning Failure into Triumph....................................6
Conclusion..................................................................................................................................9
References................................................................................................................................10

3
MANAGEMENT
Introduction
The assignment throws light on analysing the failure of Blockbuster Company which
is situated at the United States of America. As commented by Xue et al. (277), the innovation
is considered to be the development of the certain values which helps in meeting the different
needs of the customers. The different kinds of companies which are innovate have the proper
license in exploring the different new ideas along with commercialize the ideas in a quick as
well as efficient manner. In the assignment, the main aim and purpose is to understand the
reasons for the failure of Blockbuster along with analysis of the strategies which could have
been turning point for the company in making it triumph.
Overview of Blockbuster
Blockbuster LLC was one of the American based providers of the video game rental
services as well as home movie rental services. The company was incorporated in the year
1985 and it was shut down in the year 2010. Moreover, Blockbuster was successful in
expanding their business operations in the international market through the 1990s and during
the peak time in November, the officials of the company were successful in recruiting and
appointing more than 84300 employees in the entire world (Blockbuster.com). However, due
to lack of the innovation, the company could not succeed and it impacted the growth of the
company in comparison to other companies such as Netflix or Redbox automated kiosks.
Analysis of Failure of the Company
One of the most extraordinary examples of the failure of the company due to lack of
proper innovative approaches was Blockbuster. On September 23, 2010, Blockbuster was
filed for the Chapter 11 bankruptcy protection which was due to the challenging losses. They
were in $900 million in debt and the strong competition from Netflix, Redbox and video on -

4
MANAGEMENT
demand services were in high demand in the entire market which affected the growth
prospects of Blockbuster. In the past scenario, Blockbuster, with their huge presence as well
as the intense loyalty from customers, it was considered the household name in different parts
of the world. However, in last few years, the organization was failing to innovate with the
digital prospects of the business wherein their efficiency was grounded down to DVD postal
services as well as early stage streaming related services which were introducing their
presence in the market which included Love Film (Business Insider).
In order to reduce the level of the mistake which were commenced by Blockbuster in
the competitive market, there were several opportunities which were available to them for
purchasing the fledging company Netflix, which was relatively the new business related
offering the postal kind of service. In addition, it was decided that Netflix would sell more
than 49% share of their business and take the name of Blockbuster. However, with the
confusion whether to buy or not buy, Blockbuster never tried in envisioning the future for
streamlining (Business Insider).
After Netflix came into the picture, the ugly truth of Blockbuster was the fact it
penalized the different customers for late fees. In addition, Blockbuster were hesitating
whether to introduce a new model which will be suitable for meeting the different needs of
customers in the current scenario. In such scenario, Netflix was successful in taking up the
half share in the market through the help of the eliminating the physical stores and they tried
to save the costs related to overhead. Moreover, there was a model related to subscription
which was effective for the customers in renewing the same when they prefer to watch any
particular series (Forbes.com).
The lack of the innovation in Blockbuster was the main reason due to which it
impacted the growth. As analysed from the different surveys, it has been found that as the

5
MANAGEMENT
world of industry in rental services have been changing towards the streaming, Blockbuster
did not try to adopt the same and it stuck in the previous business model and maintained their
old performance. Blockbuster officials did not believe the fact that the monthly subscription
will be working and therefore, they did not move forward and the innovation was not
followed by Blockbuster as well. Due to ignorance of the shift in the innovative world,
Blockbuster failed badly and it impacted their business negatively as well (José et al. 10).
Figure 1: Analysis of Differences in Revenues of Netflix and Blockbuster
(Source: Forbes.com)
By the time Blockbuster was preparing to go on board, Netflix had already overtaken
the market and it impacted the profitability of Blockbuster negatively. The Netflix and the
technological innovation have put the obsolete business out of the business for Blockbuster as
the lack of innovation was the main element that impacted the growth prospects of the
company negatively (José et al. 480). The internet did not kill Blockbuster, the company
itself killed themselves as they did not follow the changing preferences of the customers and

6
MANAGEMENT
it impacted their growth patterns negatively as well. The CEO of Netflix has commented that
if Blockbuster had launched the own streaming services of their company, Netflix would
never have happened again. The graph helps in forecasting the fact that Netflix was
successful in achieving more than $2.2 billion and in such scenario, Blockbuster was
bankrupt that impacted the overall profitability of the business and it led to the entire closure
of the company in the competitive environment wherein they operated their business (Elaine
Rabelo 185).
Development of Winning Strategies for Turning Failure into Triumph
From the analysis of the failure of Blockbuster in the entire world, there are few
suggestions and winning strategies which could have been incorporated as it will be
beneficial in generating high level of profitability in a positive manner. The winning
strategies are crucial for reviving the presence of Blockbuster in the competitive market and
improve their position.
The profitability of the company Blockbuster is required to be connected with the
customers values. When the digital world was changing at a fast pace, Blockbuster could
have followed the same and meet the needs of customers as they are considered to be the
assets of the company (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Vall 40). When the
customers are happy, it will be generating profitability and high level of revenues in the
company successfully. Proper Decision-Making is the critical element which needs to be
implemented by Blockbuster for making a comeback in the DVD rental service world and it
could have been able to provide high level of competition to Netflix and other services
(Michaelis and Markham 42).
As commented by Steve Jobs, “People don’t know what they want until you show it
to them”- It means that if Blockbuster could have been able to innovate themselves through

7
MANAGEMENT
introducing the subscription based fees aspect and stopped the services provided which
includes the rental fees, it could have helped them in saving themselves from dusting down in
front of other companies such as Netflix which entered the market. The shifting of focus
towards the need and demand of customers is the critical element which could have been
implemented by Blockbuster in order to improve the effectiveness and it helped them in
generating high level of profitability in the market successfully (Abdi et al. 19).
Knowing the customer is the critical element as their demands are the main aspects
which needs to be analyzed by the companies before introducing or innovating the different
services which are rendered by them. The social media recommendation is one of the crucial
elements and common aspect which needs to be implemented by Blockbuster for regaining
their position in the market and it will be improving the rating system and the respective
effort will be making the service better for providing much better experience than going to
the video store as well (Bonsu and Kuofie 11).
Learning from experience is the other element which needs to be implemented by
Blockbuster as ignoring of the disruption does not make it go away. From the failure case
study of Blockbuster, it can be seen that the company had multiple level of opportunities for
purchasing Netflix in early 2000s for around $50m. However, it turned down as they did not
want to disrupt the traditional revenue. In such scenario, Netflix tried to manage the business
through introducing the disrupt innovation in their aspect that helped them in improving their
growth prospects in a successful manner (Boustani and Boustani 524).
The clear focus on the future aspects is the critical element which needed to be
implemented by the company Blockbuster for improving their presence in the market and
gain high level of revenues successfully. For instance- Netflix tried having the clear focus on
future wherein their vision was related to the streaming videos and then in 2007, Netflix

8
MANAGEMENT
started the unlimited streaming with the flat monthly fee in the year 2008. It helped them in
maintaining their position in the market and it helped them in increasing level of revenues
successfully (Brown and Mawson 368).
The proper and appropriate investment is the key element that helped them in
improving their focus on gaining high effectiveness in managing their growth. The
Blockbuster could have led the charge of disruption in their company as it would have been
capable of making exciting ventures for customers and they would be the leading companies
in the world and Netflix would never exist (Dobni and Klassen 110). Blockbuster mainly
focused on offering wide selection of the videos, however, it mainly focused on the new
releases mainly. However, the customer friendly experience was lacking in the company that
impacted their profitability and revenues in a proper manner.
Nothing is inevitable except the decline as Blockbuster tried to build the business
which are mainly based on certain kinds of conditions. In such scenario, it was required to be
made on the different conditions which would have suited the preferences of the customers.
The customer satisfaction is the main element which will be helpful for reviving their
decisions which were made by them and it impacted their growth prospects successfully
(Frenken 47). The gathering of the intelligence are the two crucial elements which would
have helped the company in maintaining their position in the competitive business
environment and it helped them in generating high level of income successfully.
From the past history, it has been noticed that there is high profitability and success in
the retail history that helped them in improving the aspects which are related to helping them
in generating income. Blockbuster, if they would have overtaken Netflix, it could have helped
them in retaining their strong position and Netflix would be no where present in the scenario
as well (Stefanie et al. 47). The profitability of the company needs to be tied with the value

9
MANAGEMENT
provided to the customers as the significant revenue generated from Blockbuster is required
to be stayed in business for keeping their moves effective and efficient in nature.
Therefore, these are considered to be the different winning strategies which could
have been implemented by the company successfully as it will be beneficial in improving the
growth patterns in the competitive business environment. In the current scenario, wherein
Netflix has been capable of achieving the highest level of share in the market. In such
scenario, the achievement of the profitability and reviving their position are the two critical
and vital elements which needs to be implemented by them for gaining effectiveness in the
market scenario and it will be beneficial for improving their growth prospects in a suitable
manner as well (Mendes et al. 10).
Conclusion
Therefore, from the analysis of the winning strategies, it can be concluded that
Blockbuster was mainly stuck in past and increasingly ignorant of the manner the world was
changing in a fast pace. Due to the same, Blockbuster became dinosaur as the lack of speed
and the ineffectiveness in the rental late fees which were applicable by the company affected
the effectiveness of the company to a large extent.
For boosting their profitability and revenues in the market, the main element which
was required was related to the maintaining the demands of customers which could have
helped them in improving effectiveness of the services to a large extent. The things could
have differently wherein the customers should have been treated as the assets of the company
for improving their presence in the entire world and it could have improved the growth
patterns successfully.

10
MANAGEMENT
References
Abdi, Kambiz, et al. "The effect of knowledge management, organizational culture and
organizational learning on innovation in automotive industry." Journal of Business
Economics and Management 19.1 (2018): 1-19.
Blockbuster, .com. "Home - Blockbuster". Blockbuster, 2020, https://bendblockbuster.com/.
Bonsu, Samuel, and Matthew Kuofie. "Innovation: Discovering Untapped Customers for
Global Development." Journal of Economic Development, Management, IT, Finance, and
Marketing 11.1 (2019): 1-11.
Boustani, Nada Mallah, and Z. E. Boustani. "Innovation in organizations having founder's
syndrome." Problems and perspectives in management 15, Iss. 2 (cont. 3) (2017): 517-524.
Brown, Ross, and Suzanne Mawson. "Entrepreneurial ecosystems and public policy in action:
a critique of the latest industrial policy blockbuster." Cambridge Journal of Regions,
Economy and Society 12.3 (2019): 347-368.
Business Insider. "The Rise And Fall Of Blockbuster". Business Insider, 2020,
https://www.businessinsider.in/international/news/the-rise-and-fall-of-blockbuster/
articleshow/73299275.cms.
Dobni, Christopher B., and Mark Klassen. "Linking Innovation Measurement to an
Implementation Framework: A Case Study of a Financial Services Organization at the Front
End of Innovation." Journal of Innovation Management 6.1 (2018): 80-110.
Frenken, Koen. "A complexity-theoretic perspective on innovation policy." Complexity,
Innovation and Policy 3.1 (2017): 35-47.

11
MANAGEMENT
Habersang, Stefanie, et al. "A process perspective on organizational failure: A qualitative
meta‐analysis." Journal of Management Studies 56.1 (2019): 19-56.
Mendes, M., et al. "Promoting learning and innovation in organizations through complexity
leadership theory." Team Performance Management (2016).
Michaelis, Timothy L., and Stephen K. Markham. "Innovation Training: Making Innovation
a Core Competency A study of large companies shows that, although managers see human
capital as central to innovation success, most aren’t providing innovation
training." Research-Technology Management 60.2 (2017): 36-42.
Naranjo-Valencia, Julia C., Daniel Jiménez-Jiménez, and Raquel Sanz-Valle. "Studying the
links between organizational culture, innovation, and performance in Spanish
companies." Revista Latinoamericana de Psicología 48.1 (2016): 30-41.
Neiva, Elaine Rabelo, et al. "Innovation in Organizations: Main Research Results and Their
Practical Implications." Organizational Psychology and Evidence-Based Management.
Springer, Cham, 2017. 157-185.
Ramos, José, et al. "Studying innovation in organizations: a dialectic perspective—
introduction to the special issue." (2016): 477-480.
Ramos, José, et al., eds. Creativity and Innovation in Organizations: Current Research and
Recent Trends in Management. Routledge, 2018.
Satell, Greg. "A Look Back At Why Blockbuster Really Failed And Why It Didn't Have
To". Forbes, 2020, https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-
blockbuster-really-failed-and-why-it-didnt-have-to/.

12
MANAGEMENT
Xue, Xiaolong, et al. "Analyzing collaborative relationships among industrialized
construction technology innovation organizations: A combined SNA and SEM
approach." Journal of Cleaner Production 173 (2018): 265-277.