A methodological analysis of Blockbuster 's fall, highlighting the reasons and possible solutions for change.

2. Carry out OD intervention for the company you selected
for the diagnosis.
Make a detailed action plan for the same.

3. Blockbuster
Blockbuster, officially Blockbuster LLC and also known as Blockbuster Video,was an American-based provider of
home movie and video game rental services (founded in 1978) . Services were offered primarily at video rental shops, but
later alternatives included DVD-by-mail, streaming, video on demand, and cinema theater. Previously operated by
Blockbuster Entertainment, Inc., the company expanded internationally throughout the 1990s. At its peak in 2004,
Blockbuster consisted of 9,094 stores and employed approximately 84,300 people worldwide – 58,500 in the United
States and 25,800 in other countries.
But by 2010, they filed for bankruptcy and
incurred a debt of a billion dollar, leading to
the final 300 of its 9k+ stores to be closed
down and now remaining as a single
souvenir store with just 3 of its original
80k+ by 2014.

4. Diagnosed problems
❖ Increase in competitive brands
There were many competitive brands in the market already, and with the new brand called
Netflix which offered surprising and baffling ideas, Blockbuster started to trail behind.
❖ Huge expenditure on physical stores
Even tho the technological age was upon them and their CEO Antioco brought another
chance for them, they failed to see it and continued to spend huge amounts on their
unrequired physical stores with a huge number of employees in total.

5. Diagnosed problems
❖ Failure to update their strategy
The times were changing and they cleary ghad to change how they delivered their product but
stayed resistant and did not adapt or bring the appropriate change.
❖ Faulty leadership and management
By giving their investors power over their idea without trusting their own leader and replacing him
with someone who could not understand the past failure (Carl Icahn). They could not bare to take
the risk and look forward and with such a closed and rigid mind, led the company to its downfall.
❖ Failure in adhering to the core value of their product.
They started out to be customer driven and deliver exactly what they needed but in the end just
become another company focused on numbers instead of the need and niche

6. It may be concluded that the main problems that have been diagnosed lie in areas which
predominantly require a combination of Strategic and Techno-Structural
Interventions.
Therefore, the Intervention plan which would be drawn out would largely focus on these
approaches.

7. Strategic Change Intervention:
Transformational Change
Transformational change can occur in response to or in
anticipation of major changes in the organization’s environment or
technology. In addition, these changes often are associated with
significant revision of the firm’s business strategy, which, in turn,
may require modifying internal structures and processes as well
as its corporate culture to support the new direction. Such
fundamental change entails a new paradigm for organizing and
managing organizations. It involves qualitatively different ways of
perceiving, thinking, and behaving in organizations. Movement
toward this new way of operating requires senior executives to
take an active leadership role. The change process is
characterized by considerable innovation as members discover
new ways of improving the organization and adapting it to
changing conditions.

8. Why?
Blockbuster is a company that was support to bring entertainment to to people at their
comfort. During a time where their product was new and the charges were considered
less compared to actual movies a lot of times, the customers were more than happy
with what they provided. But as times changed, Blockbuster failed to process the need
to change as well. The organization got internally dominated by a culture of numbers,
profits. Their neglected the truth about how Antioco brought the necessary change and
promised a huge turnover and customer satisfaction. Instead they focussed on not
cutting their miniscule loss and caved into the individuals who brought them money at
the moment even if the changes they proposed to implement had been a failed
experience for them before.

9. Overall,
Blockbuster needed to transform their entire entity if they wanted to survive the harsh
competition in the new technological environment.
They needed to communicate and learn to strategize their plans and actions to be something
that properly highlighted their core value.
The leadership and management had to work together to set examples and not delineate the
idea of change.

10. By using Integrated strategic change (ISC) which extends traditional OD processes into the
content oriented discipline of strategic management we will be using a deliberate, coordinated
process that leads gradually or radically to systemic realignments between the environment and a
firm’s strategic orientation, and that results in improvement in performance and effectiveness.
It is a process in which Design and
implementation of the strategic plan is
in one process only. For Blockbuster
which does not have time to spend on
lengthy processes as it was in dire
straits right after antioco was replaced,
this strategic plan of action would be
the most appropriate.

11. Step 1: Prepare for change
First, leaders prepare for change. Knowing that the world will never remain the same, leaders
collect information and analyze the strengths and vulnerabilities of the business on an ongoing
basis. This helps them anticipate emerging trends in the marketplace.Thinking about the future
and keeping an open mind also helps leaders stay personally resilient. They are able to find
new opportunities that emerge and take on new challenges with excitement. This helps set an
expectation of continuous improvement.
Step 2: Explain the change:
To bring back Antioco’s implementations of the discarding of late fees system and slowly pull
off physicals shops off the streets and place them more logically and restart the subscription
service which brought 6 million customers in a month.
Leaders know how to explain change, hence they can set the context and talk with others about
the business reasons for the change. They will learn to engage others in conversation and
clarify the long-term value of making the change.

12. Step 3: Create a change friendly identity
An organization’s identity can promote or hinder the transition of the company depending on
whether it supports change or stability. To move to a change-friendly identity, Blockbuster needs
to face their existing values and norms, assess their relevance to change and make
appropriate adjustments.This would involve interactive sessions wherein relevant stakeholders
may openly discuss and debate questions about their identity and how it can be ‘reframed’.
Step 4: Pursue proximity
This helps the organization to get closer to current and possible future environments and gain a
clear picture of environmental demands and opportunities.
Top management of Blockbuster must be encouraged to brainstorm about the future and
creating possible paths to success using various scenario-planning methods. They must
identify their core competencies and capabilities and then translate it into a strategy to move
the organization and competitive environment in desired directions.

13. Step 5 : Acknowledging Loss
Even when there is a sound business reason for making a change, people know that they will be affected
by the change and will have some concerns. They understand that fear and resistance are natural
reactions to change. Supporting people by recognizing the loss of familiar ways of working is an important
step towards building long-term commitment. It helps minimize disruptions to the business and
eliminates confusion for people during the change process. Blockbuster had to learn to let go of certain
factors such as their old policy of late fees to move forward, otherwise they would be stuck and spiral
down.
Step 6: Seek risk, launch and sustainability
This last stage involves bringing all of the prior processes together to pursue a series of
temporary competitive advantages. This so-called “hit and run” approach rests on the logic that in
turbulent environments, success results from identifying future opportunities, organizing to
take advantage of them, and then moving on to the next opportunity when things change. Through
this step, Blockbuster would be able to incorporate all their practices and plans holistically to
reach a sustainable outcome.

14. From the initial diagnosis, it was visible that Blockbuster was mostly
facing problems in areas of competition, faulty corporate structure,
flawed leadership and resistance to change.
This intervention technique of Integrated strategic plan (transformational
strategic change) , would be most important for the organization, and hence
each stage must be carefully planned and strategized, considering all
antecedent and consequences along with their pros and cons.
It would deal with the diagnosed issues effectively by focussing on proper
planning, refined strategizing and restructuring of the organization.

15. Techno-Structural Intervention: restructuring the organization
➔ The increasing global competition and rapid technological and environmental
changes force organizations to restructure themselves from rigid
bureaucracies to leaner, more flexible designs.
➔ These approaches are highly adaptive and innovative in developing
sophisticated managerial capabilities that further help the organization to
operate effectively.

16. Downsizing
Downsizing refers to interventions aimed at decreasing the size of the organization to reduce costs and
bureaucracy.
This typically is accomplished by decreasing the number of employees through layoffs, attrition,
redeployment, or early retirement or by reducing the number of organizational units or managerial levels
through divestiture, outsourcing, reorganization, or delayering and reducing the number of incumbetent
stores.
Steps to successful downsizing:
➢ Clarify the organization’s strategy
➢ Assess downsizing options and make relevant choices
➢ Implement the changes
➢ Address the needs of the survivors and those who leave
➢ Follow through with growth plans

17. Since Blockbuster had to file for bankruptcy, it was extremely important to make the decision of
downsizing, as it was paying wages to employees that were not even required in the first place.
As the shift from physical to technological was occurring, the customers themselve treated
these physical blockbuster shops to be a friday free-walk place and their existence was
contributing to nothing more than relics of an old time. Combined with other overhead
expenses, losses, ongoing recession period and severely disrupted cash flow due to
emergence of competition was adding to the expenditure of the company, further aggravating
the issue.
Therefore, downsizing would be an essential step which must be carefully planned and
implemented, as successful downsizing is closely aligned with the organization’s strategy.

18. Therefore with the use of an eclectic interventive approach ( transformational
and techno-cultural ) Blockbuster could have transformed along with the changing
eras and operate efficiently to beat the competition.