The Many Reasons Why Blockbuster Failed – Courtesy of Management Gurus

I decided to resurrect my previous post on Borders bookstores for Blockbuster as some had trouble substituting Blockbuster for Borders in the previous article.

None of the gurus named or implied actually said anything about Blockbuster, just taking their stated recommendations and applying it to Blockbuster. You can see the futility of adopting that single magic, one-size-fits-all and Guru’s pedigree based recipes for running a business.

  1. Marketing is about telling stories. Blockbuster failed to tell a compelling story that customers want to believe.
  2. Blockbuster did not have a Level 5 leader. That would have moved them from Good to Great.
  3. They should have focused on their existing customers and retained them. Because increasing loyalty by 5% will increase profits by 80%. Not only that, the loyal customers will continue to pay higher prices.
  4. Blockbuster stores were not managed and run by designers, they lacked Design Thinking.
  5. They did not follow the Toyota Way of lean manufacturing and lean inventories.
  6. Blockbuster should have been a Long Tail retailer. (while this may sound as plausible, I would point you to the fact that Amazon makes bulk of its revenue not from the so called Long Tail products).
  7. Blockbuster failed to Enchant their customers, the should have influenced people to keep coming back and pay the full price even though Amazon was selling it at 40% off.
  8. Blockbuster failed in the area of customer service. They should have under-promised and over-delivered.
  9. Blockbuster should have increased their prices by 1% because that would have resulted in 12-15% profit they could have used to grow the business.
  10. Blockbuster lacked good copy-writing in their Ads. If the copy is fun and engages the customer they would come and pay full price for the books.
  11. Blockbuster failed to recognize that marketing is about customer conversations. Your customers are having conversations about you whether you are part of it or not. Blockbuster was left out of the conversation.
  12. Blockbuster should have adopted co-creation, working with the customers to design the books they want to read.
  13. They should not have been running the business based on Airport business books instead they should have run this like a Silicon Valley startup. They should have gotten out of the building and talked to customers and pivoted.
  14. They should not have been running the traditional media Ads. They should have been blogging and done inbound marketing.
  15. Their website should have been ridiculously easy to use. It is all about the user experience.
  16. Blockbuster employees were not in the “flow“, when employees are really engaged in what they are doing the business results take care of themselves.
  17. Discovering books should be fun, a game. Customers must be surprised, not knowing what is going to come next week. They failed to recognize this.
  18. A street vendor selling vegetables in India is still in business. Blockbuster is not. They should have learned from that vendor.
  19. Blockbuster stores and their eBook were not remarkable. When you are remarkable, people will remark on it.
  20. Blockbuster should have given free lessons on each subject. Like Lulu Lemon did they should have asked local speakers and tutors to come teach free classes on various subjects at their stores.
  21. The should have adopted , The Sony Way, The Motorola Way, The GE Way, The Apple Way, …
  22. They should have followed in the footsteps Justin Bieber, Lady Gaga, Bruce Lee, Michael Jordan, …
  23. Blockbuster employees should have taken afternoon naps because naps help kindle creativity
  24. Blockbuster was persistent not tenacious

Do you have one?


2 thoughts on “The Many Reasons Why Blockbuster Failed – Courtesy of Management Gurus

  1. I’m not really sure about some of these reasons.. Assuming that doing something will cause statistic X to happen is usually a sign that the ‘analysis’ is worthless. A much deeper post is needed to look at why Blockbuster failed (in my view).


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