5. Blockbuster - Before the advent of digital streaming, video rental stores were the place to gowhen you fancied a night-in watching a movie or box set. This was a new phenomenon in the1980s as more and more people purchased home VHS players. By the time the firstBlockbuster store opened in Dallas in 1985, the video rental industry was taking shape -helping to create a huge new income stream for film distributors.Over the years, Blockbuster became the industry leader, growing in size to have over 9,000stores around the world and revenues of $5.9 billion at its peak in 2004. In the UK, it had over4,000 stores and its blue and yellow signage was familiar sight on the high street.At the turn of the century, Blockbuster still dominated the video and DVD rental market.However, internet speeds were improving. This carried the potential to radically alter how weconsume all forms of media. The idea of streaming a feature-length movie online was now areality.Some had this foresight, others did not.Whilst the fledgling Netflix proactively evolved its business model from a mail-order DVDsubscription service to an online streaming service, Blockbuster was slow to respond. Thecompany did develop its own streaming services but none of these caught on. It was evenslow to adopt Netflix's popular and convenient mail-order service.Added to the competitive challenge, was the operating cost of running bricks and mortar videostores. Blockbuster placed faith, as well as millions of dollars, in keeping these stores going.All the while this was a cost its competitors needn't worry about. Coupled with the dwindlingdemand for its services, by the late 2000s it was clear Blockbuster's days were numbered.Blockbuster went into administration in 2013.Using Rumelt's Criteria for Evaluating Strategies, evaluate the strategies of Blockbuster thatled to its failure.

Strategic management is a systematic and continuous process in which managers set the strategies…

Answered: Using Rumelt's Criteria for Evaluating…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

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Using Rumelt's Criteria for Evaluating Strategies, evaluate the strategies of Blockbuster that led to its failure.