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Blockbuster Video case analysis
David Cook founded Blockbuster video in 1985, opening the first store in Dallas Texas
and has grown to become the worlds number one video chain. Mr. Cook took the idea of
video rental and improved it by creating the video superstore concept. Many family-owned
video rental stores could not compete against Blockbuster stores. Blockbuster stores were
highly visible stand-alone structures that appealed to customers. Blockbuster His stores
had a wider selection of videos and offered longer hours of operation. He focused on
creating a family image for his stores by including a childrens section and excluding adult
movies. He also made it possible for busy people and people with children the opportunity
to view movies for a longer period by starting the 3 day rental period. In 1986, Mr. Cook
sold 33% of Blockbuster to h, m & Flynn and in 1987; he decided to leave the company
making Mr. Huizenga CEO. Mr. Huizenga had experience growing small companies but
no experience in retail, so he hired the best managers who were capable of developing a
retail chain. Under Mr. Huizengas leadership Blockbuster experienced major growth. By
1992, Blockbuster had over 3,000 stores (1,000 franchise and 2,000 company owned).
Blockbuster had established 3 operating divisions to manage functional activities. These
three divisions cut cost for the company by eliminating the outsourcing of these jobs.
SWOT ANALYSIS
STRENGTHS
One of Blockbusters greatest strengths is its ability to keep up the change. When video
tapes and VCRs were going out of style, Blockbuster quickly moved to DVD rental.
