They are the top competitor for Netflix because they are steady coming up with new ideas and not to mention they did play a huge part in almost putting block buster out of business. 3. In what ways has Netflix’s business model evolved because of (1) changing technologies and (2) staying on top of the business model innovations of its competitors? They are now making sure that they stay on top of technology trends that are making it easier for companies to offer DVD quality movies and television shows online. I also notice that because of competitors like hulu and iTunes, Netflix is now offering there service on devices such as the ps3, xbox360, iphones and online.
The potential of vending machines (exhibit 1) Question 3 What effects will the rise of the VOD market likely have on Netflix business model? 1. Netflix now repositions itself as a company of film investor and source of high quality content, not just a rental-by-mail company. 2. Netflix is changing its business to instant streaming media.
Microsoft is looking at the future of gaming with the global community using broadband Internet access. For Xbox360, they need to consolidate their first mover advantage for Network gaming. They need to launch the product globally whilst keeping the costs in the supply chain down. The strategy shifts from having best performance console in the market to low cost, fast mover strategy to get the “Xbox360 gaming experience” quickly to the market to capture market share. Games developers are likely to develop games for the first mover and adapt the games for the rest, which could compromise the gaming experience for the laggards, unless there are new games (like in the case of Wii).
d. Fees that studios charge Netflix for access to the studios’ content. From these four challenges I think that the Netflix‘s development of original programming is the most difficult to address need a lot of effort and a major investment in a completely different direction from sharing video either through DVD rental or online streaming. I think the easiest one would be dealing with the fees because the raising fee can involve an increase in Netflix’s own price structure, which could bring an effect on demand for its distribution services. 2. Each of the four major challenges faced by Netflix relate to the genetic managerial challenges of dealing with globalization, diversity, and ethics, they all link of the challenges that confront Netflix, some of the link are more clear than others.
Netflix in a Competitive Market Laura Seymour Excelsior College NETFLIX Netflix, even with much competition, since established in 1997 had been able to stay innovative and transition themselves to stay profitable. The company consistently keeps a good brand image for their customers and knowing what their customer wants is very important to them and has helped them benefit financially. They are able to be competitive by using a niche strategy (pg.36) and offer the largest collection of titles affordably. Netflix has implemented challenges in their field of experts be using forecasting (pg.9) to be able to monitor the company’s sales online to understand what their customer’s preferences are. This concept called cloud computing (pg.13) enables them stabilize their inventory and meet demand.
Case Analysis 3: Blockbuster Identification of the strategic issues and problems Beginning with minimal competition, Blockbuster is a company recognized in its industry as one of the first worldwide powerhouses in media and game rentals. As technology and competition continuously grows, Blockbuster increased their strategic focus to preserve their brand’s global power through strategic alliances. Their multiple channels in media entertainment keep them at a competitive advantage but the concern remains that their dependency on assets and relationships isn’t what will keep the company ahead in the future. Blockbuster’s reliance on this alone, as a strategy to continuously compete with evolving times, will be their biggest weakness. Opportunities are still available for Blockbuster to reevaluate and implements new strategies.
Netflix: Case Analysis Core Strategy: Netflix’s main strategy is to grow their large subscription business which combines both streaming TV/movies and DVD’s by aggressively pursuing new content deals. They realize that the more content that they can offer their consumers, the more subscriptions they will sell, and the more loyal their current customers will be. Additionally, Netflix recognizes that their competition is quickly adapting to their current content strategies; therefore, they expect to further develop their advantages such as brand, distribution, and their proprietary merchandising platform. Strengths: * High online retail customer satisfaction ratings and high customer loyalty produces excellent word-of-mouth. * Largest online media retailer.
As a result, consumers are more likely to spend on a good quality rental services that provide newest on-demand movies. • Change in technology – as I mentioned before, smart TVs are one of the favorable technological shifts that helped movie rental industry to gain bigger market share. Companies that provide high-speed Internet services are also key players because their product affects the demand for online movie streaming. These technological changes and many other innovations helped movie rental industry to prosper but there might be other innovations that could impact companies like Netflix. Continuous research and development is the key to changes in technology and Netflix has to stay on top of it all.
Sony with significant interests in the entertainment industry has established a Playstation Network – an online console service where users can also purchase or rent music, movies and other digital entertainment content. Sony has positioned the Playstation as a multipurpose entertainment console. As such Sony markets the Playstation at a loss and attempts to leverage the platform and realize profits from the games and other entertainment properties. Microsoft has traditionally targeted the “hardcore” game player offering superior processing, graphics and overall performance. Microsoft also offers the Xbox at below cost and attempts to realize profits through its own game sales and through licensing royalties from independent publishers.
Great inventory system- they look at subscribers queues ahead of time and use a national inventory system so they always have the right product in the right place at the right time. 1. delivery time= key measure of subscribers satisfaction v. Customers can freely unsubscribe to Netflix willingly and they will be invited back later on, and all their preferences will still be in the system. vi. They emphasize recommending older movies to their subscribers (only 30% of their business is new releases as opposed to 70% of blockbusters business) b. What advantage do they have relative to a Blockbuster or Hollywood Video retail chain?