Blockbuster: Leadership & Strategic Failures
Blockbuster: Leadership & Strategic Failures
Scott E. Morris
MGT 460
Professor Robin McCart-Brown
May 30th, 2011
Abstract This research paper will explore and analyze the leadership and strategic failures that occurred within Blockbuster Incorporated. The paper will look at leadership and strategic theories that could have assisted Blockbuster. In addition the paper will discuss the importance of leadership within an organization, and its necessity for the company to survive.
Blockbuster: Leadership & Strategic Failures
Overview
Blockbuster started as an idea by David Cook who owned a company called Cook Data Services that provided computer software to the oil and gas industry in Texas. In the early 80’s the oil and gas industry took a turn for the worse in Texas, and Cook decided to attempt a venture into the movie video rental business. The current video rental marketplace was primarily small privately owned business that had a small inventory of movies that was kept locked up and behind the counter. Cook’s idea was to offer a wide selection, allow the videos to be on the shelf, provide excellent customer service, and integrate his computer software programming background to create a software system to track inventory. On October, 19, 1985 Cook opened his first store in Dallas, Texas. After opening up three additional stores, Cook sold a large portion of the business to a group of investors with Wayne Huizenga, the founder of the world’s largest garbage disposal company, Waste Management, Inc. to finance expansion.
Growth
During the years of 1987, and under the management of Wayne Huizenga, Blockbuster began to seek expansion. Huizenga and his team began to seek out small independent video rental stores across the country as a means to expand their business. “To expand a company’s geographic coverage—One of the best and quickest ways to expand a company’s geographic coverage is to acquire rivals with operations in the desired
Scott E. Morris
MGT 460
Professor Robin McCart-Brown
May 30th, 2011
Abstract This research paper will explore and analyze the leadership and strategic failures that occurred within Blockbuster Incorporated. The paper will look at leadership and strategic theories that could have assisted Blockbuster. In addition the paper will discuss the importance of leadership within an organization, and its necessity for the company to survive.
Blockbuster: Leadership & Strategic Failures
Overview
Blockbuster started as an idea by David Cook who owned a company called Cook Data Services that provided computer software to the oil and gas industry in Texas. In the early 80’s the oil and gas industry took a turn for the worse in Texas, and Cook decided to attempt a venture into the movie video rental business. The current video rental marketplace was primarily small privately owned business that had a small inventory of movies that was kept locked up and behind the counter. Cook’s idea was to offer a wide selection, allow the videos to be on the shelf, provide excellent customer service, and integrate his computer software programming background to create a software system to track inventory. On October, 19, 1985 Cook opened his first store in Dallas, Texas. After opening up three additional stores, Cook sold a large portion of the business to a group of investors with Wayne Huizenga, the founder of the world’s largest garbage disposal company, Waste Management, Inc. to finance expansion.
Growth
During the years of 1987, and under the management of Wayne Huizenga, Blockbuster began to seek expansion. Huizenga and his team began to seek out small independent video rental stores across the country as a means to expand their business. “To expand a company’s geographic coverage—One of the best and quickest ways to expand a company’s geographic coverage is to acquire rivals with operations in the desired
References: Blockbuster, (2006), 2006 Annual Report – 10k to Shareholders, retrieved from http://investor.blockbuster.com/phoenix.zhtml?c=99383&p=irol-reportsannual Gamble, John for Competitive Advantage. McGraw-Hill Higher Education/CourseSmart, Goldsmith, Jill, (October 9th, 2005), Blockbusted!: Vid biz gets shaft from jolting techno Hitt, Michael. Ireland, Duane. Hoskisson, Robert. (2009) Strategic Management: Competitiveness and Globalization Concepts and Cases, Cengage Learning Richardson, Karen. (January 5, 2006), Heard on the Street: No Late Fee Policy hurt Blockbuster, Pittsburg Post-Gazette, retrieved from http://www.post- gazette.com/pg/06005/633119-28.stm Yukl, Gary. (2010) Leadership in Organizations, 7th Edition. Pearson Learning Solutions, New York, New York