Blockbuster image
A New Blockbuster Image
I. Point of View
Harry Wayne Huizenga, Chairman, Blockbuster
II. Major Problem
What steps should Blockbuster Inc. take to ensure the company’s sustainability in the long run?
III. Case Facts
To determine Blockbuster Inc’s market position and future business strategy, SWOT analysis was conducted and company traits and overall environment categorized as follows:
SWOT Summary
|Strengths |Weaknesses |
|High market share in the video rental industry |Company resources are finite/spreading resources too thin |
|High capital used to purchase new companies/products |No clear sense of direction for the future |
|Various business units |Over confidence in current market share |
|Opportunities |Threats |
|Video-rental business is thriving |Stuck in a market promising little or no growth in the future |
|Product integration possible through acquisition of related |Other media for home entertainment |
|businesses |Piracy |
To summarize, Blockbuster Inc holds a major portion of the video-rental industry’s current market. At the moment, the market is thriving although a potentially major threat would be the advent of new media for entertainment. Also, case facts do not indicate any concrete steps by the company to secure their current market share as well as plans on how to effectively manage their new business acquisitions.
IV. Alternatives
Before we discuss which steps Blockbuster Inc should take to ensure their sustainability, let us first discuss the potential strategic choices as presented by the Ansoff Growth Strategic Matrix.
The Ansoff Growth Strategic Matrix was first presented by H. Igor Ansoff in the Harvard Business Review of 19571. A tool used since then for analyzing growth, the matrix presents main strategic choices (ie. Market penetration, Market Development, Product Development, and Diversification) which managers can use to determine the direction their company wants to take moving forward.
Ansoff Growth Strategy
I. Point of View
Harry Wayne Huizenga, Chairman, Blockbuster
II. Major Problem
What steps should Blockbuster Inc. take to ensure the company’s sustainability in the long run?
III. Case Facts
To determine Blockbuster Inc’s market position and future business strategy, SWOT analysis was conducted and company traits and overall environment categorized as follows:
SWOT Summary
|Strengths |Weaknesses |
|High market share in the video rental industry |Company resources are finite/spreading resources too thin |
|High capital used to purchase new companies/products |No clear sense of direction for the future |
|Various business units |Over confidence in current market share |
|Opportunities |Threats |
|Video-rental business is thriving |Stuck in a market promising little or no growth in the future |
|Product integration possible through acquisition of related |Other media for home entertainment |
|businesses |Piracy |
To summarize, Blockbuster Inc holds a major portion of the video-rental industry’s current market. At the moment, the market is thriving although a potentially major threat would be the advent of new media for entertainment. Also, case facts do not indicate any concrete steps by the company to secure their current market share as well as plans on how to effectively manage their new business acquisitions.
IV. Alternatives
Before we discuss which steps Blockbuster Inc should take to ensure their sustainability, let us first discuss the potential strategic choices as presented by the Ansoff Growth Strategic Matrix.
The Ansoff Growth Strategic Matrix was first presented by H. Igor Ansoff in the Harvard Business Review of 19571. A tool used since then for analyzing growth, the matrix presents main strategic choices (ie. Market penetration, Market Development, Product Development, and Diversification) which managers can use to determine the direction their company wants to take moving forward.
Ansoff Growth Strategy