Control and Evaluation

Lei Yang

Control and Evaluation

Control and evaluation are audit techniques and tools that are widely used in western developed countries. It is by the management or business personnel directly involved in the investigation and evaluation of the effect of internal control process, its purpose is to provide reasonable guarantee for the implementation of organizational goals.

Annual-plan

Billionaire Wayne use $18 million to bought Blockbuster in 1987, and the new owner make Blockbuster become to a real leviathan. Blockbuster only has 19 stores when it first traded. Huizenga expand the company for an annual rate of 500 stores. Company's share price has soared, and has nearly 3000 stores by 1994, the $500 million cash flow that is almost monopolized the market. Huizenga predict that new technology will pose a threat to Blockbuster so he has sold this "hot potato" to the media giant Viacom in 1994 for $8 billion, and it lose half market value after two years. The reason why Blockbuster lost is because it has ignored the impact of the Internet on traditional business operation mode.

Profitability control and Efficiency control

The strategy of Blockbuster they call it the "controllable customers dissatisfied". On Friday evening, large Numbers of people poured into the store, the latest and most popular films was soon rob empty, but the Blockbuster has movies that more than other competitors, and shelf displays and more scientific, the results although most of the guests can't find the most wanted film, but still can take the "settle for second best" choose to leave for a happy weekend. This strategy makes the overall customer satisfaction very high, and strong sales was growth. There is very few charge or even free for the Films that are not very popular or old movies. But these films have high profits for Blockbuster, from relatively unpopular films, Blockbuster gains the 70% of the profits.

Strategic control

Although the Blockbuster was buried by the new technology development, but it truly born from new technology either. Blockbuster was founded in 1985 by David cook who is a computer programmer. cook noted that the traditional  video rental business are difficulties, the shopkeeper basically don't know what movies in the store, guests only can see the video covers, after decided to rent a movie, shop assistant will looking for it from the storeroom with a cover, whether it have or dose not. Its weakness is obviously, guests cannot get the film that they want many times. Cook, write a software for management the inventory film, at the same time let the computer set up the most favorite film list from guest every day, it makes all the stores can track the inventory movie every day, also can determine which one of the most popular film, which one is less popular. Similar classification software is quite common today, but it is a revolution in that year. In addition, cook make all stores more suitable for family, light and bright, there is absolutely no pornographic movie, easily, Blockbuster became to the most high-profile retail, and occupy the market in a short period of time.