Netflix Case Study Essay

1089 WordsFeb 13, 20145 Pages
Netflix: Why it Works Tava Dennis MGT 323 February 5, 2014 Stephen Theriault Abstract Netflix is a popular and affordable choice for film entertainment enthusiast and has seen significant growth in just over decade. As a novice and avid Netflix subscriber, we have found a company that has found its target market in our home. It appears that Netflix founder, Reed Hastings, made the right business moves at the right time. He entered the market at a time when he could have found himself failing to succeed. Realizing that the demand for instant streaming was a bold move in the late 1990’s when the internet and personal computers were still new and a developing phenomenon. A risky business venture proved to dominate the…show more content…
The perks of instant streaming has allowed movie watchers to not have to leave the comfort of their own home to instantly watch the movie of their choice. As the article pointed out, Netflix quickly realized the competition in the market. With Blockbuster dominating most of the industry since the 1980s, Hastings certainly wanted his company to be as successful as Blockbuster. In the infancy of Netflix, it modeled much like Blockbuster with the exception of having to leave the couch to rent a movie. Looking at the market from a situational perspective, an increasing number of households were using the internet just as Netflix was taking off. Strategically as the industry has seen, Netflix made a bold and intelligent move in redirecting their business. Customers can now have unlimited due dates and no late fees on movie rentals. Blockbuster battled the competitive market to offer its customer base a similar plan of action known as Total Access which allowed grace periods. By that time, Blockbuster had seen a major reduction in revenue realizing that Netflix was winning in the movie rental industry. It was too late for the Blockbuster, who was once the industry leader. Environmental elements play a critical role in any market. America is a fast paced country and psychologically, we all want everything “right now.” We don’t want to wait, pay extra, or leave our homes if we don’t have to. Netflix took advantage of the human behavior that is evolving

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