Netflix Case Study Essay

5265 WordsApr 1, 201322 Pages
Netflix Case Study Analysis Executive Summary: Netflix Inc. (Netflix) is currently the largest online provider of DVD rentals in the US. Founded by Reed Hastings in 1997, the company offers monthly prepaid rental services utilizing its online search engine, where the company then mails DVDs to subscribers via the United States Postal Service (USPS). Since the company’s inception, Hasting has been exploiting disruptive innovations as a means of creating a competitive advantage over incumbents within the industry. Netflix faces stiff competition within the movie rental industry that includes Blockbuster Video and traditional “mom and pop” video rental stores. Now, Netflix must develop a new strategy in response to the competitive moves…show more content…
The company was able to take advantage of innovators and early adopters of DVDs to create a niche market for itself within the movie rental industry and when the early majority started to endorse DVD players, the Netflix service offering easily transitioned across the “chasm” and into the “bowling alley” through the beachhead of supplying independent films and lesser known titles. The revolutionary movie rental system also allows for the delivery of unmatched economic value to the customer (EVC). This unparallel EVC is easily explained through Frances X. Frei’s work “The Four Things a Services Business Must Get Right.” As Frei explains, if a company is able to define what excellence is in terms of the type of experience they want their customers to have then that company will be able to create a service that a customer will value. Frei also explains that a company must target specific attributes that that the company will excel in and others that the company is willing to deliver an inferior performance in. Netflix determined that it would excel in the three specific categories of convenience, value and selection while allowing for an inferior performance as it pertains to procuring a large inventor of new released movies. Netflix accomplishes to create service excellence through multiple attributes. First, it creates service excellence through its search engine that allows customers to easily search for movies based upon

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