Netflix Case Study

1814 Words Mar 16th, 2012 8 Pages
Executive summary

The report starts by identifying creativity and innovation as the key to Netflix past success as Harold has consistently shown in his decisions throughout the history of the company taking bold action to chase un-ventured routes to satisfying customer needs.

The essence of the report however, is to highlight the issues surrounding the current technological advancements in the DVD rental market now that VOD has become a feasible and realistic platform that can be supported. Netflix is faced with a multitude of options and my argument is that it must base its decision upon the long term strategy of the business.

There is still a growing demand for DVD’s in their physical format proven by their increasing rate
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Introduction
This report first seeks to highlight the innovative thinking behind Netflix’s success followed by the major issues surrounding Netflix’s operations in 2007, leading onto an analysis of the technological advancements within the DVD rental industry at the time, paying particular attention to the growth and development of the VOD market. The report also seeks to explore the various strategic options Netflix has available to tackle this new and potentially lucrative market whilst considering their potential impact on the long term strategy of its core business in order to provide recommendations as too how Netflix should best deal with the situation at hand in order to enjoy continual growth and prosperity for the future.
The secret behind the success of Netflix’s operations
Netflix’s concept is a direct result of the innovative thinking of Reed Harold, the company’s founder and CEO. Harold typically saw the potential to satisfy customers better through the use of a new distribution channel online, using the American postal service. Through this business model he “pioneered online DVD rentals” (Kaufman, 2007) pursuing a route to market that had never been taken before.
Netflix Chose To target the DVD market rather than replicating the model of video retail chains (Kaufman, 2007) at the time at a time when ‘blockbusters’ operated using a brick and mortar

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