Successful Management of a Business, Essay Example

At home video in the global market ushered in a new era of entertainment and readily accessible information in film. Since 1982, Blockbusters presence in the home entertainment market has been one of twists and turns. Currently the world’s largest video rental chain, “with more than 6,500 company-owned or franchised stores in some 17 countries (about 62% are in the US)” the corporate chain serves customer with more than 1 billion videos, DVDs, and video games through its locations annually (Hoovers 2010). Blockbuster Online contributes another significant market segment that enables customers to interface rental preferences with even more convenience. At present, the global downturn in opportunities for traditional market expansion have resulted in Blockbuster’s divesture in foreign operations (about a third of revenues), and reorientation back to focus on its North American market as the company attempts to forge ahead into the digital future. The foregoing essay examines Blockbuster’s strategy, both historically and currently in the context of an economic crisis. Alternative recommendations toward reconsideration of foreign markets critiques the company’s short-term response, and with an opportunistic eye toward long-term growth in new, sustainable directions.

Redefinition of Blockbuster’s core business is inextricably reliant upon advances in the entertainment and technology as entertainment markets, as well as demographic market variance. Consumer segmentation research, while specifically focused on difference amongst the various regional markets, is intended for comprehensive dissemination of an entity’s customer base. What people want, and how they perceived what they are offered in terms of product, services, and price is subject to rapid transformation in this sector. Apt response to core business opportunities with emergent strategies based on researched outcomes, would put Blockbuster back in the driver’s seat. For example, markets that do not necessarily have volume video rental customers currently, but are representative of a strong customer base for satellite television, would necessarily be good targets for Blockbuster if electronics, and especially refurbished electronics were included in the product mix at  a below market price. In such cases, last phase technology could be marketed, along with video or software inputs that should be recycled rather than thrown away. By marketing the entire enterprise under the rubric of social responsibility, and specifically environmentally sound business practices, Blockbuster could simultaneously stay ahead of the pack as a global corporation with mom-and-pop values. Whether pulling up a chair to the computer for on-demand, or sitting on one’s sofa to watch tape videos on refurbished VCRs, the core values of Blockbuster promise to bring low cost entertainment to customers around the globe.

Competitive Landscape

Consumer demand for diversity at a lower than market price point put Blockbuster into a constant state of urgency over missed opportunity in areas that should have been its core concept product lines. This was quite obviously based on a strict adherence to mission and intended strategy, but in the high change environment of technology related retail, resulted in nearly insurmountable outcomes as positioning in emergent markets was ignored by the corporation’s owners (Hitt et al. 1995). Blockbuster’s foray into the video game and DVD resale markets was slow, and based on several reasons. Acquisition of Blockbuster from its founder, David P. Cook whom fostered a brand identity based on customer loyalty to a mom-and-pop retail environment, by investor, Wayne Huizenga resulted in explosive growth in terms of expansion to new markets through franchising, but little change in product diversification strategy. Slow growth in the area of product diversification and even in price point, created latent challenges for the company. Innovations in the entertainment and increasingly morphing tech fields, resulted in highly competitive products such as pay-per-view, digital on-demand, TiVo, DVD sales and video games.

In response to competitor interests in online entertainment, Blockbuster launched its Online service that allows members unlimited viewing online, and with alternative postal delivery for monthly fee. Development of the project totaled approximately $30 million. By 2005, Netflix had filed litigation against its competitor, which resulted in an undisclosed mediation. With the entrance of competitive entities that offer direct access product solutions, such as Netflix on demand instant downloads, Blockbuster must struggle with convenience and up-to-the-minute distribution of new productions. Blockbuster would bode well to supplement its product line with a Netflix distribution model, in order to bolster subscriber membership and expand global reach. Indeed, with both franchise and internet presence, Blockbuster may be able to continue to monopolize on its existing brand loyalty, and promote new customer interest through strategic internet marketing, and product offerings.

Through researched consumer segmentation analyses, the corporation would also be able to further its universal model of delivery into more varied niche markets, and especially in large, moderate income English and Spanish language markets in South East Asia and South America. In short, the significance and appeal of Blockbuster’s “chain of value” would be more seductive in terms of product life with thorough interpretation of “foreign” film as a predominant global market interest.

Despite downturn in revenues since the global economic crisis in 2008, Blockbuster has been undergoing various fiscal strategic measures including acquisitions, store closures and debt-equity swaps in an effort to re-stabilize the corporation in its home market in the United States. The push into international markets where digital-on demand technology is limited still offers value. In many developing markets (i.e., North Africa), that are not quite engaged in internet subscriber access as Southeast Asia or Latin America, satellite television is widely used. Therefore, market interest in Hollywood and other regional film production is pervasive. Profitability, then, would be on number of owners with access to DVD or video players. Refurbished technology is common in these areas, and so is the marketability of last phase inputs. In areas engaged in U.S. foreign policy initiatives this is especially true. Hollywood is the most readily recognized format for engaging international perspectives in the politics of everyday life. Perhaps an alternative strategy in the aforementioned essay would put Blockbuster into a position of ‘global’ leadership once again.

Works Cited

Blockbuster, Inc. (2010). Hoovers. Retrieved from: www.hoovers.com

Hitt, Black & Porter (1995). Management. Upper Saddle River: Pearson Education, Prentice Hall.