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Home » Blockbusters Case Study

Blockbusters Case Study

April 5, 2023 by batheories

Case Studies
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A classic example of an organisation that failed to innovate and strategically adapt to both changes and pressures in the external environment (particularly technological changes) and its strategic positioning in a rapidly changing marketplace was Blockbuster.

Blockbuster was a company that dominated the video rental market in the 1980’s and 90’s.

From its start in 1985, the brick-and-mortar video rental chain grew from its first location in the US to over 9000 locations around the world by the late 1990’s. The company employed over 84,000 employees and at its height was valued as a $3 billon company.

By 2010 Blockbusters started proceedings to file for bankruptcy.

What went wrong?

1. They lost sight of what business they were really in. Entertainment!!! Not a store renting DVDs or VHS cassettes!

2. They were not flexible or willing to adapt and change to the market when they had the opportunity – failing to innovate and invest in streaming technologies or work in partnership with emerging platforms like Netflix.

3. They failed to change the business model to changing customer needs – They failed to put the customer first – making huge profits from late fees.

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batheories

BATheories.com is managed by a group of educators from Mumbai. We also manage the website StudyMumbai.com. Our panel includes experienced professionals and lecturers with a background in management. BATheories is where we talk about the various business theories and models for BA (Business Administration) students.

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