Netflix Case Study
1) Market readiness (cfr. reading material and PPTs class 1, 2 and 4):
How would you appraise and distinguish Netflix’ on-line movie rental offer compared to Blockbuster, Wal-Mart, Amazon and others, e.g. in terms of user-responsiveness, price/(added) value-for-money, delivery/convenience, …?
Max. 40 lines
Netflix had developed in the early days of its activity a different approach towards the movie rental industry. First of all, the main advantage that Netflix has regarding its competitors is the first-mover posture. Indeed, with the growth of Internet-available services, Netflix felt that there was an opportunity to meet consumers’ expectations: online access to a wide choice of movies. It was also the first movie rental company to mail its movies to its customers. In these businesses, it was several years ahead of its competitors.
In terms of price, although not being as cheap as the Wal-Mart rental offer, Netflix’ subscription fee is affordable. The fee was comparable to what Blockbuster is charging its customers. Netflix is cheaper than Amazon if you borrow at least 2 movies a month which is mainly the case for Netflix’ customers as they have an average of 15.
Regarding the variety of choice offered by the companies, Netflix has one of the widest portfolio of movies. As it is not the main activity of Wal-Mart, it has a smaller selection of movies. Compared to Blockbuster which offered mainly recently released movies, Netflix positioned itself as an outlet for independent films of various genres.
Moreover, Netflix has created an interactive community thanks to its subscribers. Thanks to their Cinematch software, it could optimally respond to customer’s movie preferences. It also created “Friends” and “Profiles” which enable subscribers to share their comments about movies they have seen, their favorite films and so on. These different features created added value for subscribers compared to other providers such as Wal-Mart and Amazon, and helped
How would you appraise and distinguish Netflix’ on-line movie rental offer compared to Blockbuster, Wal-Mart, Amazon and others, e.g. in terms of user-responsiveness, price/(added) value-for-money, delivery/convenience, …?
Max. 40 lines
Netflix had developed in the early days of its activity a different approach towards the movie rental industry. First of all, the main advantage that Netflix has regarding its competitors is the first-mover posture. Indeed, with the growth of Internet-available services, Netflix felt that there was an opportunity to meet consumers’ expectations: online access to a wide choice of movies. It was also the first movie rental company to mail its movies to its customers. In these businesses, it was several years ahead of its competitors.
In terms of price, although not being as cheap as the Wal-Mart rental offer, Netflix’ subscription fee is affordable. The fee was comparable to what Blockbuster is charging its customers. Netflix is cheaper than Amazon if you borrow at least 2 movies a month which is mainly the case for Netflix’ customers as they have an average of 15.
Regarding the variety of choice offered by the companies, Netflix has one of the widest portfolio of movies. As it is not the main activity of Wal-Mart, it has a smaller selection of movies. Compared to Blockbuster which offered mainly recently released movies, Netflix positioned itself as an outlet for independent films of various genres.
Moreover, Netflix has created an interactive community thanks to its subscribers. Thanks to their Cinematch software, it could optimally respond to customer’s movie preferences. It also created “Friends” and “Profiles” which enable subscribers to share their comments about movies they have seen, their favorite films and so on. These different features created added value for subscribers compared to other providers such as Wal-Mart and Amazon, and helped