Running head: FAILURE ANALYSIS/CHANGE STRATEGY 1

Failure Analysis/Change Strategy

Name

Date

LDR/531

Instructor Name

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Failure Analysis/Change Strategy

Week 6 Learning Team C assignments consisted of analyzing a business that failed and

one that succeeded within the last 5 years. After discussing the two companies that met the

criteria we selected Green Mountain Roasters, Inc. and Blockbuster Rentals (the brick and

mortar stores). Learning Team C identified each organization’s objectives, vision, and mission

statements, and the leadership styles, organizational theories, and structure that contributed to

each businesses success or failure through research and analysis.

Green Mountain Coffee Roasters, Inc.

Objectives, Values, Mission

In 1981, Robert Stiller, the founder of Green Mountain Coffee Roasters, Inc. was

vacationing at a ski resort in Vermont and had a great cup of coffee and decided to introduce it to

the company. Green Mountain was a small, specialty coffee store; however over the years the

company has grown rapidly. Green Mountain established a company that involved communities

that nurture the beans and has a goal in creating a larger business that creates healthier

communities. The company’s vision was merely to create a good tasting coffee while inspiring

the communities that nurture the beans. The company’s long-term viability as a business is

inextricably linked to the ecological and social viability of the communities where we work.

According to, Northwest Food Processors Education Research Institute 2007, “Our Purpose: We

create the ultimate coffee experience in every life we touch from tree to cup – transforming the

way the world understands business” (ERI, 2007).

Success Indicators

A part of Green Mountain Coffee Roasters, Inc. success begins with the company’s focus

on the environment. GMCR companions with cultivation in the processing of the company’s

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coffee. The company’s main focus is making the lives of the coffee farmers expand. According

to Global envisions, “GMCR is interested in helping coffee farming families become more

resilient at the household level, to not just survive, but to thrive under all economic, social, and

environmental conditions.” The company acknowledged the thin months through the year when

families must change their diets to make up for the lack of income, the company structured a

program devoted to satisfying the thin months with ways for the farmers to make extra income

and supplement the seasonal dips (Sarandon 2013).

Organizational Behavior Theories

Green Mountain management identifies diversity to inspire creativity and excellence;

therefore, the company encourages employees to share information and offer feedback openly.

This helps the company in developing open communication between leadership and employees.

According to, Mary Grace Neville, “the company’s use of an AI methodology for strategic

planning and organizational change exemplifies senior executives’ willingness to embrace

whole-system thinking” (Neville 2008 p. 566). Open forms of communication support an

environment that employee’s value. This encourages the employees to increase performance and

provides information that helps in improving company goals. When employee’s increases

performance for the success of a company the results are positive.

Role of Leadership

The Green Mountain Roasters Corporation succeeds in increasing profits and remains

socially responsible by becoming involved with communities where coffee bean farmers harvest.

The company’s management interacts with teams and working with employees helps the

company’s organizational structure remain moderately level. The organization’s culture consists

of shareholders, employees, and management and the outcomes of the increasing success of

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Green Mountain Coffee Roasters, Inc. According to "Seeking Alpha" (2014), “With a

compound annual growth rate of more than 75% between 2010 and 2012, GMCR's strategy is

leading it to grow in value and profits for shareholders” (Seeking Alpha, 2014). 

Blockbuster Inc.

Objectives, Values, Mission

Blockbuster Inc., was a global business with 8,000 brick and mortar stores. The stores

offered movie and game rentals for home use by consumers. Xie (2008), “Blockbuster identifies

its vision as "to be a complete source for movies and games" and summarizes its mission as: "to

grow our core rental business while continuing to use our brand, our massive database, our stores

and our studio relationships to deliver an even broader array of home entertainment to both

existing and new audience" (Form 10k, 2006). Blockbuster tries to satisfy customers' needs of

renting movies and games, as well as buying and trading them (Antioco, 2004)” (Introduction).

Blockbuster’s vision was too narrowly focused. A more broadly defined theme, like “Connecting

viewers to films and games they’ll love” would have been better (Plantes, 2010). Blockbuster did

not understand the business it was in. They thought they were in the entertainment distribution

business but it was actually more to do with the retail customer experience (Baskin, 2013).

Blockbuster failed to see the big picture and recognize the Hollywood’s box office receipts were

failing yet consumer’s need something to do with their time (Baskin, 2013). The company faced

new competitors with different offerings such as Netflix and Redbox. There were substitutes for

video rentals such as cable and satellite TV, and the movie theater (Xie, 2008). After 2000 cable

and satellite companies offered video on demand movies, online rentals were available, and

retailers such as Wal-Mart and Target were selling affordable movies and games. Company

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leadership attempted to change with the market demands but in most instances the strategies

were not fully implemented or not implemented swiftly enough to remain competitive.

Organizational Behavior Theories

The organization made many mistakes over the decades. It would have been easy to

predict the eventual downfall as their vision and mission was not clear and company strategies

were never carried out nor shared with the employees. Blockbuster was not sufficiently forward

thinking and did not see the threats from outside forces. When they did realize the threats from

competitors they were slow to react. They changed their business model several times over the

years but did not properly plan, communicate, and execute the new strategies during each

transformation period. With each ensuing transition, the company appeared to be desperate and

grasping at the success that came so easily to them in the early years.

Role of Leadership

Blockbuster has changed owners and leaders many times since inception in the early

80’s. The company was the brain-child of David Cook who opened the first store in Dallas in

1985. The company was purchased by Viacom in 1994 and leadership, now under Wayne

Huizeng, committed to diversification and heavily invested in the merger. Blockbuster began a

downward spiral and shareholders lost confidence as the company struggled to support Viacom.

Over the next decade the firm was led by several CEOs with differing visions and strategies. In

1996, Bill Fields changed the store image to an entertainment center offering toys, books, CDs,

magazines, and snacks, as well as renting movies and games. The “convenience store” feel was

not successful and stock continued to decline. In 2003-2004 under the leadership of Antioco,

Blockbuster offered customer’s an in-store membership allowing unlimited rentals. Antioco’s

next attempt to resurrect the business included his vision to transform the stores to a place where

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you could rent, buy, or trade movies and games (Blockbuster Inc., 2014). These many attempts

to transition the business proved unsuccessful.

Blockbuster failed to listen to the customer base and as much as it tried to change it could

not keep up. Why should anyone drive to a storefront and spend a half hour looking for a move

or game to rent when they could do it almost instantaneously from the comfort of their own

home. In addition to the inconvenience Blockbuster raised prices over time. In an attempt to cut

costs they reduced the number of employees resulting in a longer wait time for customers.

Blockbuster could not compete and eventually cost and convenience won out.

Leading Organizational Change

As the CEO of Blockbuster, Team B must closely identify the diverse factors that have

become issues in regard to the company’s vital areas of communication, customer satisfaction,

technology, economy, and growth. We must ensure the company appreciates communication at

levels of the company to prevent misrepresentation. It is vital that Blockbuster focuses on

modern technology because of the quick changes in new technology. Acknowledging customer

satisfaction and staying competitive is another aspect to the company’s success. As CEO of

Blockbuster, Team C must search for techniques to keep the company’s current market directed

at individuals of every age level and improve new ideas that would attract the total family

market.

Organizational Change

The business environment requires companies to undergo changes almost constantly if they

are to remain competitive. There are three basic stages for a company undergoing change. The first

type is identifying the current strategy is no longer suitable for the company's situation. The second

and third is by identifying the vision for the companies and implementing change for the new

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systems to adapt. The most vital areas for change consist of value proposition, customer segment,

channels, customer relationships, cost structure, key activities, key resources, key partners, and

revenue streams. Change can be critical in managing employees.  

Learning Team C selected to implement a change for the Blockbuster by following the

Kotter’s 8-step plan. Blockbuster management and employees must follow the plan listed below:

1. Create Urgency

Recognizing the negative effects of avoiding change

Developing new business opportunities

Increasing communications

Building support

2. Form a Powerful Coalition

Promoting well respected leaders

Requesting trust and strong commitment

Team building

Recognizing strengths, weaknesses and opportunities.

3. Create Vision for Change

Understanding of the organizations values

Developing a phases to summarize the organizations viewpoint and future

Developing strategies that delivers the vision

Continuous review of the company’s vision speech

4. Communicate the Vision

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Frequently promoting change visions

Practicing in communications channels

Incorporating the company’s vision

Addressing concerns

5. Empower Others to Act on the Vision

Developing change leaders

Obtaining consistent feedback

Rewarding employees for making change occur,

Ensuring compatibility of organizational structures, performance, and

compensation

6. Create Short Term Wins

Implementing small changes

Choosing cost effective goals

Acknowledging the goal advantages and disadvantages

Rewarding employees

Step 7: Build on the Change

Analyzing successes and failures

Developing new goals

Acknowledging continuous improvement

Step 8: Make Change Stick

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Communicating the progress,

Recapping success stories

Explaining the importance of change in orientation and training,

Developing new policies to supports the value of change

Conclusion

In business we will encounter differences in attitudes, personalities, skills, and values.

Identifying the areas where organizations need to improve their capabilities most is an important

step in any change effort. Such a skill is helpful in times of cost cutting where limited training

resources are available. It is important to close the competency gaps that prevent companies

from meeting business objectives. No matter what the industry, trends are changing by the day.

Blockbuster was faced with new competitors with different offerings such as Netflix and

Redbox. Blockbuster had more than enough time to adapt and make the appropriate changes they

needed in order to compete. The best victory is one that can be most difficult. Sometimes it takes

a business to reach down deep inside and come up with a strategy to remain on top.

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References:

ERI, 2007, Green Mountain Coffee Roasters, Retrieved from,

http://fredtalks.com/wp-content/uploads/2013/09/Green-Mountain-Coffee-Roasters.pdf

Sarandon, S, 2013, “Helping Small Coffee Growers Fatten Up the Thin Months”, Retrieved,

from,

http://online.wsj.com/news/articles/SB10001424127887323951904578291843600327004

Neville, G., M., 2008, Positive Deviance on the Ethical Continuum: Green Mountain Coffee as a

Case Study in Conscientious Capitalism. Business & Society Review

(00453609), 113(4), 555-576. doi:10.1111/j.1467-8594.2008.00332.x

Seeking Alpha, 2014, Green Mountain Coffee Roasters - On the Road to Success, Retrieved,

from http://seekingalpha.com/article/1893831-green-mountain-coffee-roasters-on-the-

road-to-success

Xie, Y., & Lin, I. (2008). Strategic analysis: Blockbuster case study. The Business Review,

Cambridge, 9(2), 68-75. Retrieved from http://search.proquest.com/docview/197294114?

accountid=458

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Baskin, J. (2013). The Internet Didn't Kill Blockbuster, The Company Did It To Itself. Retrieved

From h ttp://www.forbes.com/sites/jonathansalembaskin/2013/11/08/the-internet-didnt-

k ill-blockbuster-the-company-did-it-to-itself/

Blockbuster Inc. - Company Profile, Information, Business Description, History, Background

Information on Blockbuster Inc. Read more:

http://www.referenceforbusiness.com/history2/93/Blockbuster-Inc.html#ixzz2wo0PjchY. 

(2014). Retrieved from http://www.referenceforbusiness.com/history2/93/Blockbuster-

Inc.html

Plantes, K. (2010). Why Blockbuster failed and World Class will win. Retrieved from

http://www.plantescompany.com/blog/business-model-strategy-framework/why-

blockbuster-failed-and-world-class-will-win/