A New Blockbuster Image
Autor: josephinenevado • October 5, 2013 • Study Guide • 818 Words (4 Pages) • 2,187 Views
I. Point of view: Chairman H. Wayne Huizenga
II. Statement of the Problem: What plan will Blockbuster choose concerning the future of their company?
III. Case facts
o Blockbuster began its operation in 1985 with one store and within 8 years, it increased to 3,200 stores in 10 countries around the world.
o By year 1989, Blockbuster was known as the “America’s Family Video Store”.
o The chief marketing officer of Blockbuster Tom Gruber, former McDonald’s marketing executive, stated that Blockbuster exhibits same marketing principles with McDonald, described as having a fast-service, convenient locations, family oriented and appealing to the kids.
o In November 1992, Blockbuster acquired Sound Warehouse and Music Plus Chains (a music retailing business).
o In December 1992, Blockbuster joint-ventured with Virgin Retail Group (an entertainment retailing chain) to open “megastores” in United States, Europe and Australia.
o In February 1993, Blockbuster bought Republic Pictures (a video-rental business).
o In April 1993, Blockbuster acquired majority of the interest in Spelling Entertainment group (an entertainment production company) and bought 21% of Discovery Zone (an operator and franchiser of indoors children’s play centers) giving Blockbuster the rights to open 50 New Discovery Centers.
o In August 1993, Blockbuster bought the two largest store franchises.
o In September 1993, Blockbuster invested a $600 million in Viacom (television business).
o By 1993, Huizenga took numerous measures to diversify Blockbuster, for he believes that even though Blockbuster earns as much as $1.2 billion, the business will have a little or no-growth in the future.
o Huizenga transformed Blockbuster from a video-rental business into a global entertainment company with different of forms of distribution
o Blockbuster announced as the no. 3 music retailer in the United States.
o Blockbuster’s opponents criticize Huizenga’s diversification strategy for they believe that video-rental business is still a success and analysts even expected that 1993 revenues will increase by 75%.
o Recently, the company revealed plans to make the Blockbuster Entertainment Village, a 2600-acre entertainment and sports complex in South Florida.
o In addition, Blockbuster has plans to create”game zones” within video stores. SEGA already rents video games through Blockbuster and uses the stores to try out leading-edge hardware.
IV. Alternative Decisions
1) Blockbuster
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