A New Blockbuster Image

I. Point of view
For this case, the point of view is Mr.H.Wayne Huizenga, Chairman of Blockbuster
Entertainment Inc. who has to decide about the future of company. He also has set up the
organization goal toward becoming a full-fledged entertainment company.

II. Major problem

What is the strategy plan of the company to reach its goal of becoming a full-fledged
entertainment company? Or is there a future plan when the video rentals may not be able to
grow in the future? (He had to look for a future strategy to pacifies the criticism and boosted
the future of the company)

III. Case facts

In the future, the blockbuster company has an organization goal is “full fledge
company” which response customer’s needs in the entertainment industry. The key to the
company’s success lies in the slogans “fast service, convenient locations, family orientation,
and kid appeal”. Blockbuster capitalized on its image as “America’s Family Video Store” that
they were more than 3200 stores in 10 countries around the world. In the other hand,
Chairman forecast the future of video chain in a market promising little or no growth in the
near future due to the advent of interactive technologies including 500 channel TV and
video-on-demand. Moreover the rapid diversification make someone doubt in his decision
because when look through growth rate of existing data is still continue positive
dramatically. The company also have revealed the big project for Blockbuster village; a 2600
acre entertainment and sports complex in South Florida.
SWOT Analysis
Internal Factors
Strength
- Strong goal based on offering a wide range of diversification entertainment
- Good image company as “America’s Family Video rentals”
- High market share (more than 2300 stores in 10 countries)
- Far-sighted vision of Chairman
 - Invest in diversification of businesses and joint venture is the way of risk
management including reduce business competitors.
- Blockbuster produces publications in concert tour to enable the business to good
communicate with audiences
Weakness
- There may be no clear future business strategy.
- Mismatch opinions between chairman and employees may be due to insufficient
information.
- Shortage of skilled consultants plan in certain business strategy represents a threat
to steady growth of profits for Blockbuster Inc. in those markets.
Opportunity
- Entertainment business is needed in the society of the US households. (66 percent)
- Entertainment business has many diversification.
- New trends in the consumer behavior can open up new market. It provides a great
opportunity for the organization to build new revenue streams and diversify into new
product categories too.
Threat
- Intense competition
- Risk from investment in different countries are different such as political, Liability
laws and economic conditions may be given change in policies in those markets.
- Consumer behavior changes all the time.
- Imitation of the counterfeit and low quality product is also a threat to company’s
product especially in the emerging markets and low income markets.

Internal Factors STRENGTH WEAKNESS

1.Strong goal 1. There may be no clear

External
Factors
OPPORTUNITY
1.Entertainment business is
needed in the society of the
US households. (66 percent)
2.Entertainment business
has many diversification.
3.New trends in the
consumer behavior can open
up new market.
THREAT
1. Intense competition
2. Risk from investment in
different countries
3. Consumer behavior
changes all the time.
4.Imitation of the counterfeit
and low quality product
IV. Alternative Cause of Action
Alternative 1 : Proceed the diversification in business following by these steps;
2.Good image company
3.High market share
4. Far-sighted vision of
Chairman
5.Invest in diversification of
businesses and joint venture-
6.Blockbuster produces
publications in concert tour
SO Strategies (Advancement)
1.Proceed the diversification
in business
2.Create the new products and
outstanding different from
competitors
ST Strategies (Avoiding Threat)
1.Maintain the old customers
by special promotion
2.Produce products for specific
group
3.Publication in different ways
such as online, radio,
newspaper for wider
customers
future business strategy.
2. Mismatch opinions between
chairman and employees due
to insufficient information.
3. Shortage of skilled
consultants plan in certain
business strategy
WO Strategies (Overcoming
weakness)
1.Hire the skilled consultants
or professors plan in certain
business strategy
WT Strategies (Avoid and
Overcome)
1.Rethink diversification based
on the right information and
people’s agreement
2.Slow down the
diversification in business
 1.Create the new products and outstanding different from competitors for specific
group
2.Publication in different ways such as online, radio, newspaper for wider customers
Advantage?
Disadvantage?

Alternative 2 : Slow down the diversification in business following by these steps;

1.Rethink diversification based on the right information and people’s agreement
2.Maintain the old customers by special promotion
Advantage?
Disadvantage?

Alternative 3 : Hire the skilled consultants or professors plan in certain business

strategy
Advantage?
Disadvantage?

V. Decision
a) Rationales
b) Implementation
c) Contingency