Using Ray Kroc’s expansion strategies and the same techniques that led to the growth of his Waste Management Company, Huizenga bought and built new stores in the most convenient locations. Huizenga embarked on expanding Blockbuster. ©melissamn/ Blockbuster Through The Decades: Megahit to Flop Timelineĭavid Cook relinquished control of Blockbuster to Huizenga, a successful businessman who built the entertainment company into a thriving business. A customer shops for DVD rentals inside one of the Blockbuster Video, when the stores were still open. He relocated the company’s Headquarters from Dallas, Texas, to Fort Lauderdale, Florida. Huizenga took over the leadership of Blockbuster. In 1987, Cook divested part of his video rental business to Wayne Huizenga, the founder of Waste Management, Inc, the largest garbage collection company worldwide. This helped Blockbuster focus on movies that people would rent more frequently. He developed a computerized system that made it easy and efficient for the company to manage stock and identify its customers’ needs. Using his innovative mind, Cook set Blockbuster apart from the competition. He opened his first store in 1985, expanding to three more stores in 1986. As an imitator entrepreneur, Cook decided to go large scale and revolutionize the growing movie industry. So, he looked for a market that lacked a key player that he could dominate and saw that opportunity in video rentals. He thought of investing the $ 8.4 million earned from the IPO elsewhere. Thus, oil & gas companies had to cut down discretionary expenditures, which meant no purchasing of optional software, translating to low sales for Cook’s database company. Six months later, there was a massive amount of surplus oil in the market. Cook took it public, raising $ 8.4 million. Within five years, the company had doubled its profits. ![]() In 1978 he opened a database service company with the aim of developing software for the oil and gas business. Unbelievably, it could not leverage its strong networks and resources to shoulder above its challengers.īut is that why Blockbuster failed? The Founding of Blockbuster: How it happenedĭavid Cook, the founder of Blockbuster, was a database developer and a solutionist who could easily spot a viable business opportunity and capitalize on it. Inefficient management and the great recession significantly contributed to Blockbuster’s decline. This led to the closure of all its stores apart from the Bend, Orengo franchise store, which remains open today. ![]() But twenty-five years after its entrance into the video rental business, Blockbuster filed for bankruptcy. It had more than 4500 stores across the US and other branches overseas in its peak years. This video rental chain expanded rapidly, becoming the world’s largest movie and video game provider. It held a large inventory (8,000 VHS and 2,000 Beta) which gave it a competitive edge over other reputable small-scale stores operating at the time. Keyes – CEO Notable Products Video Rentals Website The History of Blockbuster: What to Knowīlockbuster opened its first video rental store in October 1985 in Dallas, Texas. So what happened? How could a company that was so established only have one store left worldwide, in Bend, Orengo? How did it get here? Quick Facts Year Founded 1985 Founders David Cook Industry Entertainment Industry Headquarter Dallas, Texas Key People James W. But this did not last forever Blockbuster failed. It offered a vast selection of movies and had an unparalleled snack section making it the most convenient store for all in-house entertainment and snacking. Then, Blockbuster had over 9,000 stores across the globe and over 45 million registered customers. Most Xennials can recall those old days when, if you wanted to watch a movie, you’d walk into a video store in your neighborhood to rent a DVD or VHS tape. This decision, plus several other missed opportunities to change with market, led to Blockbuster’s demise.īefore the founding of Netflix and Redbox, Blockbuster was the king of the video rental industry in the 90s and early 2000s. This was a miscalculated decision Netflix became their main challenger years later. In 2000 Blockbuster failed to acquire Netflix for only $ 50 million. ![]() David Cook, the founder of Blockbuster, developed a computerized system that made it easy and efficient for the company to manage stock and identify its customers’ needs.A brick and mortar store with a familiar logo and layout, Blockbuster was a hub of many neighborhoods and provided a new means of family fun – including perfect movie watching snacks.Blockbuster was once the only way you could rent a movie and watch it at home – and dominated the industry in the 90s and early 2000s.
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