C. Myblog

Is Your Battlefield Changing Like Blockbuster’s Changed?

July 23, 2015

Blockbuster

In 2004, with $5.9 billion in revenue and 9,000 stores, Blockbuster enjoyed a dominant position in its market.  In the evenings and on weekends, their stores were busy with people eager to review the latest titles and select their entertainment for the evening.  However, by 2013, Blockbuster was down to just 300 stores earning $120 million in revenue (Source: Blockbuster and the End of Movie Buying, Bloomberg Businessweek, 11/8/13).  What changed?

Consider the following questions:

  • What business was Blockbuster in?
  • Who did Blockbuster see as their competition?
  • What did Blockbuster’s customers want or value in 2004?  Did that change by 2013?

During the turn of the millennium, new players were entering the video market.  In 1999, Netflix began its subscription-based service allowing members to send and receive DVDs by mail.  By 2007, Netflix introduced video streaming over the internet.  In 2002, Redbox began to provide DVDs through its self-service kiosks placed at convenient locations like McDonald’s restaurants, grocery stores, convenience stores, and gas stations.

Blockbuster’s battlefield had changed.  New market entrants, with new approaches and technologies, fundamentally transformed the consumer’s expectations and behaviors.  Blockbuster’s customers began to see store visits as an inconvenience.  Customers had new options and began to choose them.

Today, in financial services, new entrants like Walmart, Apple, and Google are creating disruption.  Changing consumer behaviors are driving new business models and expectations.  To remain relevant and sustainable, it may be critical to consider whether credit unions’ battlefields have changed and, if so, what strategies could be employed to compete.

 

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