{"id":517938,"date":"2010-04-06T13:20:35","date_gmt":"2010-04-06T17:20:35","guid":{"rendered":"http:\/\/futuresavvy.net\/?p=1258"},"modified":"2010-04-06T13:20:35","modified_gmt":"2010-04-06T17:20:35","slug":"the-blockbuster-bankruptcy-perfecting-an-existing-service-while-the-world-moves-on","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/517938","title":{"rendered":"The Blockbuster bankruptcy: perfecting an existing service while the world moves on"},"content":{"rendered":"

As of writing, Blockbuster clings to business life, with $1 billion in debt, unprofitable stores and continued losses, and it looks inevitable that it will file for bankruptcy protection. In Q4 ‘09 the company posted a loss of $434.9m on revenue of $1.08bn. The stock price has fallen is $0.26 per share, down from lofty levels of over $15 in the early part of the decade. That’s a lot of shareholder value down the drain. *<\/p>\n

\"blockbusterReading analysis by John Tamny in Forbes<\/a>, I lighted on the following paragraph — as perfect an encapsulation of why looking to the future in timely and in a high-quality way is essential, and how quality horizon scanning is integral to it:<\/p>\n

“As often happens as companies grow, Blockbuster concentrated on perfecting its existing service<\/em> while beating competitors offering the same instead of looking into ways that outsiders might destroy its business model altogether… For Blockbuster, the “disrupter” in question was Netflix. Indeed, popular as the Blockbuster brand was, getting to the video store in order to take advantage of its services was a hassle for customers–as was returning videos on time to avoid paying late fees. The rise of Netflix from well outside the traditional retail space<\/em> meant these problems were solved in one fell swoop.” <\/span>(my italics)<\/p>\n

Change that matters, that is, relatively sudden and acutely disruptive to incumbent business-model success, always<\/em> comes from outside an industry. Britannica wasn’t beaten by another encyclopedia. Eastman Kodak was beaten by digital photo startups, not by Fuji. And so on, and so on, through industry failure, whether it leads merely to value hemorrhage or all the way to Chapter 11.<\/p>\n


\nLooking vs seeing<\/strong><\/p>\n

Sure there are companies that lose because they are simply outcompeted, that is, are less capable than the competition in doing the same thing. Hertz is currently in this category. But when a clear market leader, with brand and capital and customers galore comes totally unstuck, it is always new technology and\/or new business model coming from the outside that has done it. In these cases, as with Blockbuster, companies fall to industry entrants that change ways of doing things, solving pain or trade-offs that buyers suffer, or otherwise provide consumers with more value.<\/p>\n

These are always, theoretically, innovations incumbents could have done themselves if they were ready to think ahead (and brave enough, when required, to cannabalize existing products that stood in the way of important future steps) and therein lies a conundrum about looking at new, external competitors. It’s seldom that the incumbent can’t see the intruder, that is, is not looking. Often they are looking intensively. It is that they don’t see the absolute disruption in the new until it is too late. It is a problem of perception. This is why industry horizon scanning is a little about the easy task of looking, and a lot about the much harder job of seeing. And why putting one’s corporate head down and making an existing product or service ‘more perfect’ is part of not seeing.<\/p>\n

* Interestingly, the Blockbuster demise was called exactly right in November 2007 by Don Reisinger on CNET<\/a>.<\/p>\n

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As of writing, Blockbuster clings to business life, with $1 billion in debt, unprofitable stores and continued losses, and it looks inevitable that it will file for bankruptcy protection. In Q4 ‘09 the company posted a loss of $434.9m on revenue of $1.08bn. The stock price has fallen is $0.26 per share, down from lofty […]<\/p>\n","protected":false},"author":5646,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-517938","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/517938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/5646"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=517938"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/517938\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=517938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=517938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=517938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}