Blockbuster Inc.
Introduction Blockbuster was founded in Dallas, Texas, in 1985. It is one of the world s leading
providers of videos, DVD s, and video games. According to the research group Burke, Inc.,
Blockbuster has nearly 100 percent recognition among active movie renters in the United States.
Combined with market leadership, this makes Blockbuster one of the strongest entertainment brands
in the US. The main purpose of this paper is to show how Blockbuster is using information technology
to gain a competitive advantage, and if it has in fact achieved a competitive advantage. The first
section of the paper is an industry analysis detailing the ins and outs of the movie rental business. The
next section, Company Analysis, we will describe in ... Show more content on Helpwriting.net ...
That has left companies such as Blockbuster, Hollywood Video, Movie Gallery, and independent
operations fighting over ever smaller pieces of the entertainment pie. In the Early 1990 s, there were
about 70,000 stores around the country that rented videos. Today, there are about 18,000. ( Movie
rental business in steep decline , 2005) Blockbuster is a large company with 40% market share (Dow
Jones and Company). In 2002, the revenue for Blockbuster was $5,565,900,000. In 2003 it was
$5,911,700,000 and in 2004 their revenue was $6,053,200,000. Over the past three years, Blockbuster
has shown a net income loss. In 2002 their income loss was $1,627,600,000 and in 2003 it was
$983,900,000. In 2004, they had a larger income loss than in 2003, it was $1,248,800,000.
Blockbuster currently has 84,300 staff members (Mergent Online). Blockbuster s performance in the
stock market is dropping. In 2002, the high of the year was $30.25 and the low was $11.80 (S P Stock
Guide 2003) The next year, in 2003, the high dropped to $23.07 and the low was a little higher at
$12.21 (S P Stock Guide 2004). In 2004 the high of the year was $19.37 and the low of the year was
$6.50(S P Stock Guide 2005). It is clear to see how drastically the stock dropped from year to year.
(Business and Company Research Center). Because Blockbuster has eliminated late fees from its
stores, people have seen a dramatic decrease in
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