Analysis Of Blockbuster Video

1019 words - 4 pages

After watching Charlie Rose’s interview with Jim Collins; where Collins explains his recent book How the Mighty Fall, presented me with an opportunity to reflect over recent companies that were staples in my childhood and early adult memories and now are non-existent. In this paper, I will look, analyze and relate Blockbuster Video and their history to Jim Collins’ five stages of an organization.

Stage 1: Hubris Born of Success
In 1985, Blockbuster opened its first store in Dallas, Texas. After the first few stores opened, founder David Cook built a six million dollar warehouse, which could pull and package multiple stores in a day. Blockbuster’s ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. Blockbuster had instant success. In the early 1980’s and 1990’s Blockbuster put neighborhood mom and pop video stores out of business by offering better selection and convenience. However, success like that enjoyed by Blockbuster can foster arrogance. For Blockbuster, arrogance meant they believed they could do anything within their stores. For example, Blockbuster purchased Sound Music and Music Plus chains. This move took Blockbuster from movies to music. Secondly, this Blockbuster Music meant they were no longer renting now they were selling.

Stage 2: Undisciplined Pursuit of More

According to Jim Collins, the undisciplined pursuit of more is reckless behavior, which sets the company at great risk even though their stock continues to climb. In my opinion, this was evident with Blockbuster as they decided to expand into everything entertainment and away from their core business, renting videos. It had become Blockbuster’s goal to become a one stop shop neighborhood entertainment store. To complete this transformation, Blockbuster expanded the merchandise available by renting and selling videotapes, selling books, CD’s, as well as renting and selling video games. From its beginning, Blockbuster had developed a brand name that resonated as the premier place to rent movies. However, through Blockbuster’s expansion into other types of entertainment it undermined their core business-renting movies. Blockbuster entered into the music and literature arenas, which are primarily things you do alone. Conversely, watching movies was something you did as a family and enjoyed by all ages. The renting of movies was creating experiences with someone else, your family or a group of friends during snow storms, rainy days and family evenings. Furthermore, by selling videos, Blockbuster changed their mindset. In my opinion, Blockbuster went from believing and telling its customers, “be smart and don’t buy a movie you will only watch once, rent it.” Instead, they stated, “come in we have everything.”

Stage 3: Denial of Risk and Peril
The next stage according to Jim Collins is denial of...

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