BUSINESS STRATEGY REPORT

Business Strategy Report



Business Strategy Report

Executive Summary

The Blockbuster Inc. was founded in 1985 and it is an American-based chain of DVD, Blu-ray, VHS and video game rental stores with its headquarters in Downtown Dallas, Texas. It has more than 8,000 stores throughout the US, Europe, Australia, Asia and in 17 other countries. Blockbuster Inc. is a primary and worldwide distributor and provider of home movies and video game entertainment (Michael 2010, pp. 23).

The company has closed down most of its stores which had previosuly been bought in by various other companies. The downfall of Blockbuster's videos was foreseen in Wall Street as a brand which was to be vanished by the year 2010 from the markets. However, as the world's leading retailer of home movies and video game rentals (James 2010, pp. 377), the Blokbuster Inc., was falling short to compete with its competitors. The only chance for its survival is to quit from this business because of its worsening financial conditions. The product differentiation and integration strategy would be very effective if it is followed in the Blockbuster Inc. However, it could be a little late for the Blockbuster's management to implement this staretegy because the entire company has been undergoing heavy financial losses.

Currenet Financial Situation

For nearly two decades, the Blockbuster, Inc. (NYSE: BBI) has been the one of the leading companies of United States in the video rental business. It is now contemplating to eliminate the debt(Farrell, 2011). This news has forced the company's shares to decrease to as low as $.24 per share (Blockbuster, Inc., 2010). The company had lost $65 million in the last quarter. Its revenue keep decreasing quickly as other competitors such as Redbox and NetFlix draw off their revenue. For a company like Blockbuster Inc., which has 6,000 stores all over the country(Riper, 2011), it is difficult to imagine that it could vanish in near future. Blockbuster's model of renting movies, videos and DVDs via mail from its physical stroes, is being demolished by satellite on demand (Yahoo Finance, 2010). The company may still be around in the industry as it has established its movie kiosks and a small mail and Internet-delivered content business. But its brick and-mortar business is almost vanished (Joshua, 2011).

Key Strategies, Advantages and Reasons for financial losses

Blockbuster Inc. Online

In 1999 Blockbuster Inc. came up with the brilliant and simple concept of online movie rentals delivered to the customer's door. Rather than pay per rental, the customers could choose up an up to eight discs at a time to plan and pick their movies on their website right from their laptops (Ruth 2011, pp. 88).

Now, in an era when one film at theater is more than 9 bucks for an evening show, $ 9.99 per month for all the movies that you can watch sounds pretty good (Michael 2005, pp. 15). 

Reasons for financial loss

At this point, the customers would not even have to leave their homes, spend gas, sit in traffic, or pay exorbitant theater costs ...