Blockbuster Wasn’t Up to the Challenge

September 23, 2010 | blog | By Mike Sullivan

Blockbuster filed Chapter 11 bankruptcy today, putting an official stamp on what had been rumored for months. The move delivers yet another object lesson for leading brands that fail to view themselves as challengers.

Whether hubris or incompetence is the culprit can be argued by others, but what is clear is that the once formidable category leader blew countless opportunities to adapt to marketplace changes. Netflix, redbox, and VOD each surfaced and served up ample opportunity for Blockbuster to innovate and change the game back to its advantage. Inexplicably, it didn’t.

In fact, Blockbuster seemed stuck in an aging model, not only rebuffing changing technology and distribution, but clinging to a customer service ethic that was just as hapless. The publicity surrounding the company’s inept handling of late feestelegraphed the apathetic approach to customer relations that I experienced firsthand many times at my local Blockbuster store. It ultimately drove me and thousands of others away from a brand we once enjoyed.

Things could have been different had Blockbuster embraced the challenger brand ethic. The best way to remain number one is to think like number two. Netflix and redbox are excellent examples of challenger brands that took on the category dominator by changing the rules of the game to their advantage. Of course, those rules will be changed again, and when they are, the leader had better be thinking like a scrappy follower.

Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency


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