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Blockbusters Strategic Plan
By: Jessica Spears

Blockbuster is a leading global provider of in-home rental and retail movie and game entertainment. The company operates in the US, Europe, Latin America, Australia, Canada, Mexico and Asia. They have been in the business since 1985 when founder David Cook opened up his first Blockbuster video rental store in Dallas, Texas. It wasn’t until 1989 that the company acquired its first store out of country in both Canada and London. David’s Cook’s previous experience in the software industry really helped as a crutch when creating a new model for managing a video rental store. In the first couple years of business Blockbuster acquired Erol’s Video a video retailer and Major Video, a 175 store chain retailer. David’s early success came from superior inventory management techniques, magnetic data strips on movie boxes and sensors at the door to discourage theft, membership cards, and a dramatically increased movie selection. (Koening, pg c-29) Despite the early success of the new model, in 1986 Blockbuster was in financial distress and the company ended its year with a $3.2 million loss.
In 1987, Wayne Huizenga bought Blockbuster entertainment and was soon joined by two investors who purchases stock in the company. Shortly after that Wayne expanded the company focus from franchise model to store ownership which made a huge difference in the company’s success. In the late 1993, Blockbuster became an acquisition target for Viacom media network company. The $4.7 billion deal ran into difficulties when Viacom positioned itself to purchase Paramount Communications. While the merger eventually took place stocks for Blockbuster dropped hugely. In 1998 was when Viacom announced its intention to sell its remaining share in Blockbuster. In 2005 was when Blockbuster decided to eliminate late fees which resulted in…...

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