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Blockbuster Entertainment Corporation

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  1. SWOT Analysis
    1. Strengths
    2. Weakness
    3. Opportunities
    4. Threats
  2. Problem Statement
  3. Alternatives' Growth Strategies
    1. New Product Development
    2. Developing strong strategic alliances - Market Penetration
    3. International Expansion - Market Development
    4. Criteria
    5. Analysis
  4. Recommendations
  5. Implementation

Blockbuster video is the undisputed king of the video-rental industry. The following comment made by Fran Bernstein of Merrill Lynch accurately describes Blockbuster's position. ?Blockbuster stands alone in the video rental market in both size and ambition. One wonders where is the Burger King to their McDonald's?? However, this statement does not signify that Blockbuster is devoid of threats or problems. The video-rental market is almost mature now and a slow down in growth is forcing Blockbuster to reevaluate its corporate strategy.

[...] Weakness Although Blockbuster has been very successful, there are areas of weakness. There has been a problem regarding customer satisfaction despite the extensive efforts of the company to cater to the customer's needs. On busy days, it seems to be unlikely that the popular new-releases will be in stock. The rental rates are another cause for customer concern. Currently, Blockbuster rents its videos for more than the industry average of two dollars per night for a film. Blockbuster's gangbuster acquisition style of expansion may also be a cause for concern. [...]

[...] The video-rental industry must keep itself up to date on new home entertainment activities. Just as the audiocassette replaced vinyl records, there is always the possibility that a new medium for movies will replace videos. Problem Statement Considering the maturing market in the video-rental industry, how should Blockbuster adapt in order to continue success and sustain growth? In order to build a long-term marketing strategy, we will elaborate on the business opportunities that Blockbuster should explore. Alternatives?Growth Strategies # 1 New Product Development One method of continuing growth is new product development. [...]

[...] First, there will be a very large initial outlay for Blockbuster in entering foreign markets. In addition, Blockbuster could suffer the opportunity cost of using its capital elsewhere. There is also the cost of time that it takes to enter into any international market. Other conditions are barriers to entry and whether or not the foreign markets would view Blockbuster, an American company, with a respected brand image. On the other hand, Blockbuster could greatly benefit from a market development strategy. [...]

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