Submitted by: Submitted by claudiosanchez
Views: 272
Words: 551
Pages: 3
Category: Business and Industry
Date Submitted: 06/18/2013 01:25 PM
History
* American-based provider of home movie and video game rental services
* Founded by David Cook in Dallas in 1985
* Innovation due to Cook’s experience in managing huge databases
* Resulted from changing forces in video rental industry
* Increasing # of households with VCRs
* “Mom-and-pop” video stores offered limited selection
* Logo was created by Lee Dean
Development & Growth
* 3 different strategies for Blockbuster’s Business Model:
* Unique identity to appeal to customers, stores would be highly visible stand-alone structures
* Offer a wide variety of videos
* Longer rental periods
* Strategies were extremely successful
* 1986- Blockbuster owned 8 stores and had franchised 11 more
* John Melk, an executive at Waste Management Corporation
* Contacted colleague H. “Wayne” Huizinga
* Huizinga extremely impressed with the brightly lit family video supermarket
* 1986- Found opportunity to make company a national chain, which Huizinga purchased 33% of Blockbuster
* 1987- Huizinga takes over as CEO and his goal was to make company the industry leader in the U.S. video-rental market
* Huizinga’s new business models’ for Blockbuster:
* Store location
* Obtain the best store locations in each geographic area
* “Cluster Strategy”-target a particular geographic market and then open up new stores one at a time until they saturated the market
* Sales soared- company went into 133 major markets, reached 75% of U.S pop.
* “Blockbuster Kids”
* Promotion aimed at attracting the 6-to-12 year old age group
* This would strengthen the company’s position as a family video store
* Each store stocked 40 titles recommended for children as well as kids’ clubhouses to amuse themselves
* Reduced cost structure
* Blockbuster’s IT was constantly upgraded to...