1. The Product: According to the company's 10-K filing with the U.S Securities and Exchange Commissions, Blockbuster Incorporated is a public company. Its stock is traded on the New York Stock Exchange. This company was founded in Dallas, Texas in 1985. Since 1985, it has become the world's leading providers of videos, Digital Video Discs and video games, with worldwide revenues of more than $6 billion in calendar year 2004. Approximately 80 percent of Blockbuster's revenues are generated in the United States, where this company has more than 48 million member accounts. By December 31, 2004 Blockbuster had approximately 9,100 stores in the United States and more than 3,200 stores located in 24 other countries including one located in the Middle East in Israel (Blockbuster 10-K).
2. The New Channel Requirement: The Blockbuster business model satisfies the challenge that it must be a product that does not currently exist in Egypt to the extent that there are no other retailers of movies, DVDs and video games that have developed the business model used by Blockbuster. Rather than simply purchasing a limited number of games, movies and DVDs at whatever discount retailers receive for buying in bulk, Blockbuster has developed a profit sharing program with their suppliers. The key to this arrangement involves the fact that Blockbuster does not pay for all of the movies and games it acquires. Instead, it pays the suppliers a percentage of the rental fee. As a result of what the suppliers now find to be a lucrative arrangement, Blockbuster is able to obtain a large number of copies of popular programs for each of its stores making it likely that if a consumer cannot find the product they are looking for at a local retailer that Blockbuster will have the product in stock.
3. Growth Plans: The growth objective of Blockbuster is to push small interdependent video and game retailers out of business. There are a number of techn...