The Bankruptcy of Blockbuster

CompUSA, K-Mart, Blockbuster. Once great companies that dominated their industry, only to fall victim to more nimble companies that combined technological innovation and a desire to meet the needs of consumers. When Wal-Mart started rolling out new stores in every American city with the lowest prices possible, K-Mart did little to change its business model, hoping that Wal-Mart would simply go away like an annoying mosquito, until one day Wal-Mart became so dominant that K-Mart went bankrupt. In the 1990s, Blockbuster was the captain of its industry, making obscene profits off the late fees and video rentals of its consumers. When Netflix and other video rental chains arose to give consumers an easier way to rent movies without having extended waits or obscene late fees, the customers quickly took notice and left Blockbuster in the dust. Because Blockbuster did not change their business model and instead continued doing essentially the same thing until it had to file for Chapter 11 bankruptcy. There's a lot we can learn from Blockbuster--the world is always changing, and if you don't adapt to the new circumstances faster than your peers, you will eventually be left behind. The Suns Financial Diary wrote a great article about the Fall of Blockbuster, which you can check out here: http://www.thesunsfinancialdiary.com/personal-finance/fall-blockbuster-lesson-keeping-business-model-current/ .

Yellow Page Cancellation Opt-Out Service On The Rise

Whenever someone talks about buying a stock, one of the primary risks facing an investor is the potential for technological obsolescence. After all, Eastman-Kodak was once the most powerful name in the photo business, racking up millions of dollars in profits. Rapid technology increases has significantly disrupted the company's business model, and these technological forces have reduced Kodak to a pale shell of its former self. Whenever a company faces industry headwinds, people often joke of the business going the way of the 'horse and buggy business.' Whenever you're thinking about a business, you should immediately think about how vulnerable the company is to technology. For instance, it would be much easier for technology increases to bring down a printing business than it would, say, a beverage company. If you had to guess between McGraw-Hill and Coca-Cola which business model would still be intact in a hundred years, I know I would put my money on the latter.

Chris Morran at The Consumerist has written a great article about the decaying yellow and white book industry, noting the sharp increase in the number of people opting out of receiving the giant paper doorstop. If you'd like to read his amusing article, I've included a link here: http://consumerist.com/2011/06/seattle-residents-have-canceled-225000-yellow-pages-in-only-two-months.html .