A New Blockbuster Image
V. Case Studies
A New Blockbuster Image
In the fall of 1993, Chairman H. Wayne Huizenga of Blockbuster faced a host of difficult decisions concerning the future of the company. Should he slow down the diversification of the company? Was his approach too scattered? A year earlier, in 1992, Blockbuster was merely a video-rental giant. Steps taken in the past months, however, had set Blockbuster on a course toward becoming a full-fledged entertainment company. But the steps taken were not without a few stumbles, and criticism about Huizenga’s decisions was multiplying. As 1993 drew to a close, Huizenga had reason to consider rethinking what he wanted for the company.
Blockbuster began in 1985 with one store. Within three years, there were 415 stores around the country As of October 1993 there were more than 3, 200 stores in 10 countries around the world. In a word, Blockbuster has enjoyed tremendous success.
According to former McDonald’s marketing executive Tom Gruber, chief marketing officer at Blockbuster in 1990, the key to the company’s success lies in its “McMarketing” principles: fast service, convenient locations, family orientation, and kid appeal. “The same factors at work in fast food retailing are at work in video retailing,” said Gruber. By 1989, Blockbuster capitalized on its image as “America’s Family Video Store.”
But by 1993 Blockbuster was seeking a new image- that of a multimedia company. The video chain with 1.2 billion dollars in sales considered itself stuck in a market promising little or no growth in the near future. Although more than 66 percent of U.S. households own at least one VCR, the advent of interactive technologies including 500- channel TV and video-on-demand calls into question the future of video rentals. So Huizenga took numerous measures to diversify blockbuster.
In the meantime, however, the video rental business is thriving. Herein lies one of the reasons opponents criticize Huizenga’s diversification strategy;
A New Blockbuster Image
In the fall of 1993, Chairman H. Wayne Huizenga of Blockbuster faced a host of difficult decisions concerning the future of the company. Should he slow down the diversification of the company? Was his approach too scattered? A year earlier, in 1992, Blockbuster was merely a video-rental giant. Steps taken in the past months, however, had set Blockbuster on a course toward becoming a full-fledged entertainment company. But the steps taken were not without a few stumbles, and criticism about Huizenga’s decisions was multiplying. As 1993 drew to a close, Huizenga had reason to consider rethinking what he wanted for the company.
Blockbuster began in 1985 with one store. Within three years, there were 415 stores around the country As of October 1993 there were more than 3, 200 stores in 10 countries around the world. In a word, Blockbuster has enjoyed tremendous success.
According to former McDonald’s marketing executive Tom Gruber, chief marketing officer at Blockbuster in 1990, the key to the company’s success lies in its “McMarketing” principles: fast service, convenient locations, family orientation, and kid appeal. “The same factors at work in fast food retailing are at work in video retailing,” said Gruber. By 1989, Blockbuster capitalized on its image as “America’s Family Video Store.”
But by 1993 Blockbuster was seeking a new image- that of a multimedia company. The video chain with 1.2 billion dollars in sales considered itself stuck in a market promising little or no growth in the near future. Although more than 66 percent of U.S. households own at least one VCR, the advent of interactive technologies including 500- channel TV and video-on-demand calls into question the future of video rentals. So Huizenga took numerous measures to diversify blockbuster.
In the meantime, however, the video rental business is thriving. Herein lies one of the reasons opponents criticize Huizenga’s diversification strategy;