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436 8.2

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436 8.2

Businesses succeed and fail for a variety of reasons that have small and large impacts on

their future. In an ever-changing business world, organizations must contend with several

internal and external factors in their respective environments that can shoot it to the top or send it

plummeting toward the ground. Indecision, taking too long to make a decision, or saying no to a

proposition can mean serious consequences for a business (Top Lists, 2020). Some businesses,

like Apple and Netflix, have succeeded and become brands known worldwide for their

innovation and transformation of consumer technology and communication and entertainment

viewing, respectively. Others, like Kodak and Blockbuster, are known for their failure that

followed several decades of being at the top of their game.

Former video rental business Blockbuster is one of many business failures that happened

due to bad decisions made that led to its decline. In the late 1990s and early 2000s, Blockbuster

reigned supreme in the video rental business with more than 9,000 stores across the United

States. In just one decade Blockbuster became a thing of the past after several poor business

decisions. Internal strife between investors led to an “aggressive expansion plan” (Ash, 2020)

consisting of buying out existing video rental chains and opening at least one new store daily

which worked for several years until it was offloaded to media conglomerate Viacom.

Technological innovations in entertainment viewing, namely streaming, were emerging. Netflix,

which was then a DVD-by-mail rental service, became the biggest competitor offering what

Blockbuster did not: convenience. Customers could search Netflix’s catalog for rentals to receive

and return them by mail, cutting out the need for a commute to the video store (Satell, 2014).

Blockbuster also contributed to its demise by refusing an offer to buy Netflix for $50 million and

then teaming up with soon-to-be disgraced accounting firm Enron to make its own video-on-

demand platform. After that failure, on-demand entertainment became the norm and Blockbuster

missed out on the new frontier of video rental (Davis & Higgins, 2013).


Ash, A. (2020, August 12). The rise and fall of Blockbuster and how it's surviving with just one

store left. https://www.businessinsider.com/the-rise-and-fall-of-blockbuster-video-


Davis, T., & Higgins, J. (2013). A blockbuster failure: how an outdated business model

destroyed a giant.

Satell, G. (2014, September 21). A look back at why Blockbuster really failed and why it didn't

have to. Forbes. https://www.forbes.com/sites/gregsatell/2014/09/05/a-look-back-at-why-


[Top Lists]. (2017, February 4). 10 worst business decisions ever made [Video]. YouTube.