Blockbuster Failure

Published: 2021-06-27 20:40:04
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The Failed Organization, Summary, Mission, Values, Objectives –The role of leadership, structure and culture -Indicators of failure -Specific Organization behavior theories that explained its failure. approx 500 Blockbuster Video Blockbuster used to be the behemoth of video stores with people roaming the aisles in search of a favorite movie the entire family could enjoy. It was also convenient because customers could get their favorite movie along with a wide selection of candy, popcorn, and soda pop.
Blockbuster was iconic in the 90″s and early 2000’s. A phrase was even produce among customers and used for many years “it’s a blockbuster night” At its peak in 2004, Blockbuster had up to 60,000 employees and more than 9,000 stores. (Farfan, 2012) Blockbuster mission statement was: “Our corporate mission is to provide our customers with the most convenient access to media entertainment, including movie and game entertainment delivered through multiple distribution channels such as our stores, by-mail, vending and kiosks, online and at home.
We believe Blockbuster offers customers a value-prices entertainment experience, combining the broad product depth of a specialty retailer with local neighborhood convenience. ” Due to its competition from Netflix and Redbox, Blockbuster lost a significant amount of revenue and filed for bankruptcy on September 23, 2010. Netflix added a twist that immediately appealed to blockbuster customers, Monthly plans that allowed customers to keep their DVD’s for several days without incurring any late fees.
The offer tapped into consumer anger because Blockbusters’ fees could easily double or triple the cost of the video rental. According to (Anderson & Liedtke, 2000) “In 2000 Blockbuster collected nearly $800 million in late fees, accounting for 16 percent of its revenue. Last year, those late fees had plunged to $134 million, or just 3 percent of the company’s revenue”. Blockbuster probably would have been in a far better position had it taken a company called Netflix more seriously.
In 2000, Blockbuster turned down a chance to purchase the still freshman Netflix for $50 million. They believed the customers would not adapt well to change and they believed the Netflix machines were to complex. (Graser, 2013) “In 2005, Variety first reported that while Antioco (CEO of Blockbuster) was respected as a tough negotiator and strong manager, he lacked the vision to see where the home video industry was going and the changing shifts in the business under his feet. “

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