The Fall of Blockbuster Olivia Bambara, Julie Feng, Nick Sojka, Cody Johnston 1

1985 — founded by David Cook 1992 — Blockbuster is the undisputed video rental leader 1994 — Viacom buys Blockbuster for $8.4 billion — Silicon Valley veteran Reed Hastings founded Netflix 1999 — Viacom takes Blockbuster public 2000 — Blockbuster takes in almost $800 million in late fees 2004 — Blockbuster is at the peak of its powers, with about 9,000 stores globally — Blockbuster files for bankruptcy protections in September 2011 — Dish Network buys the assets of Blockbuster for $234 million 2013 — Blockbuster announces plans to close its remaining US stores. History of Blockbuster 2

-Blockbuster Owners -founder: David Cook -Viacom -Stock holders -Dish Network -Who Blockbuster Owned -Britain’s Ritz -US Chains Major Video -Erol’s Video -Employees -Competitors -Customers who are resistant to change Stakeholder Analysis 3

Forces for Change ● Rise of Netflix and online streaming ● High costs related to having fixed stores Force Field Analysis 4 Forces against change ●Past success, strong brand ●Large amounts of revenue ●Significant money and people put into stores

● Management failed to adapt to changing consumer demands-not “in tune” with the environment o Past successes with in-store distribution o Lack of creativity ● Didn’t persist enough to change methods of distribution- “too little, too late” ● Lack of a compelling vision for the future Kanter’s 7 5

Outdated mission & purpose -Convenience store vs. Entertainment Distribution model Lack of BHAGs (Collins & Porras) -Potential Netflix acquisition, social media & customer preferences Building Company Vision 6

1.In what way did Blockbuster fail to perceive the customer experience of watching a movie? To what degree do you think this contributed to their eventual bankruptcy? 2.In what ways could Blockbuster have maintained their niche while adapting to the changing market demands? Discussion Questions 7