Why do you think Blockbuster has used various operating forms (company-owned operations, joint ventures, and franchises) for the different foreign markets it has entered?.
Blockbuster used various operating forms such as company-owned operations; joint ventures, and franchises for their different foreign markets. The operation they used depends upon the place they entered. They need to use strategy that applies to that certain country. Like for example, in the British market, the operating form they used was the company owned operation. This is because franchising was not yet developed in the United Kingdom video store market. While in Japan, the company planned to expand in this country through franchising its outlets and expected to have a thousand store by the year 2000. This is because of several conditions such as: First, there were no major video rental chains in Japan; second, there were only 1,800 movie theaters in Japan which is fewer than one tenth the number in the US; lastly video stores there catered mainly to males under 25 years of age by renting tapes of pornographic and violent films, so Blockbuster would target an older and more family-oriented market and would rent no adult videos.
Another reason why they need to use various operating forms is that they get different benefits from the different operations. Joint venture refers to a cooperative effort among two or more organizations who share a common interest in a business enterprise or undertaking. In this case, Blockbuster made a cooperative effort with Cityvision in the United Kingdom as a springboard for their expansion into France, Germany, and Italy via joint ventures. The company also made a 50/50 joint venture with a Japanese partner, Fujita Shoten. The benefits they get from having a joint venture are: First, the tax benefits that some nations extend to companies with local partners or a lack of finances, personnel, or local marketing expertise.
