Blockbuster is the textbook GPI death. Success creates rigidity: 9,000 stores became 9,000 anchors. Late fees were margin: 16% of revenue from customer friction. Board politics killed adaptation: Antioco was right, got fired anyway. Debt accelerated death: $900M made pivoting impossible.
6 years to respond to Netflix. Rejected $50M acquisition in 2000. Board politics killed online pivot in 2007.
Unprofitable since 1997. Knew Netflix threat for decade. Shut down Total Access when it was winning.
9,000 stores, zero field intelligence reaching HQ. CEO laughed at Netflix offer.
Physical stores with leases. $900M debt. Late fees as revenue model could not be eliminated.
Antioco trying to adapt, Icahn ousted him. Keyes doubled down on brick-and-mortar.
Massive physical infrastructure. Netflix digital, Blockbuster locked in atoms.
Management did not understand streaming. 6 years behind market.
"Blockbuster GPI crossed 7.0 around 2004. They were dead. They just did not know it yet. The financials said healthy. The GPI said hospice."
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