Information on modern organisations
Many companies fail because they didn't capitalise on e-commerce side of the company and did not have a business strategy. This was evident because during the recession companies that did not have a clear strategy using ICT inevitably failed. HMV and Blockbuster are classic examples of this, and in this blog I will go in a deeper analysis and evaluation of why they went bust.
Organisations can be categorised in three main types of organisation that can be readily identified:
Commercial organisations
These are what we would normally call businesses. They trade in a competitive market with the main objective is to survive and make profit and growing the business. The smallest of these businesses are sole traders like a stall on your local market or windows cleaners; the largest are international companies like coca cola or Ford motor company.
public organisations
These organisations are funded by taxation and are controlled by directly or indirectly by the government. Theses include: direct government bodies such as government departments and the civil service; local government, public educational bodies such as school, colleges and universities; the health service; the armed forces and the emergency services.
non-profit or charitable organisations
These organisations raise their finance from donations or grant funding and use the funds to raise a particular cause or issue, they provide employment and incomes for the organisations administrators. There are many types of these organisations like private education and health care fields, many of whose organisations are set up as charities.
Blockbuster
The DVD and rental company had 528 stores across the country and 2 million customers. A company that once dominated the industry was preordained to extinction because they did not see that driving to a shop and renting a movie was not as easily accessible as downloading it online.
Retail consultant said: "There are shifts in the market place all the time. Blockbuster had a window of opportunity 5 years ago to respond to changes in the market perhaps buy a streaming service and perhaps build on their strong band.
The main lessons that you can take away from Blockbusters failure is that it doesn't matter how successful you are today, tomorrow is not guaranteed. With technology evolving rapidly businesses have to adapt and have a clear strategy Here are my thoughts how Blockbuster could have survived:
HMV
HMV is looking to follow in the footsteps of blockbuster, HMV a market leader in the entertainment industry, sales fell dramatically to 13% to £288 million in six months to the end of October.
HMV opened its flagship in 1921 in oxford street in London and now they have over 240 stores and are at the risk of losing those shops because they have not put enough onto their website. The demand for online is increasing, extenuating this fact music fans in Britain have streamed audio tracks more than 3.7 billion times last year. Furthermore digital albums sales increased by 14.8% to 30.5 million last year. However in store sales have been been at a deficit, sales of album on CD by 19.5% last year to 69.4 million. The growth of digital downloads, the recession and competition from supermarkets were all eroding its business performance.By far the biggest impact, however, was the explosion in popularity of mail order websites such as Play.com, Amazon, and Tesco.com. For almost a decade these companies exploited a loophole in EU tax rules to ship DVDs and CDs at VAT-free prices from the Channel Islands – thereby undercutting HMV.