1. Assess the video-rental industry. How will this impact the strategy of businesses in this industry? 2. What role did technology play in Blockbuster s demise? How will technology impact the strategy of other like kind organizations? 3. What functional level and generic level business strategies were/are successful for the parties involved in this case? The case details the rise of Blockbuster as the leading video rental company and the forces such as increasing competition and changing technology that led to its decline and fall. Founder, David Cook, built Blockbuster upon society s changing desire to own VCRs and rent videos. Antcipating, greater consumer demand, Cook realized the need for IT speed. To this end, Cook s new strategy and business model revolved around developing appealing stand-alone superstores, that offered wide variety, longer rental periods, and long operating hours all of which would incorporate an IT system. As company-owned stores and franchised stores began to expand, Wayne Huizinga purchased Blockbuster with the intent of making it the industry leader in the U.S. video-rental market. Huizinga s new business model included a “cluster strategy, ” intense marketing campaigns to attract customers and build brand recognition, the formation of alliances, reducing cost structure, an IT upgrade, new store expansions in smaller market segments (free-standing and franchised), and acquisitions of smaller video chains. By 1990, revenues from video ren
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