Netflix Core Competencies

The movie rental industry is a living industry; there are constant changes with advances in technology, rights management, and the slow, but steady, move away from physical Media. Companies such as Netflix, Hulu, RedBox, and Blockbuster are being forced to look at new business models and try to keep up with these changes.

Netflix followed a very well structured International strategy by planning their mission statement which is mainly directed to end users. “For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.”

Q 1. Some of Netflix’s capabilities and core competencies are mentioned in the case. Go

The downturn of the economy has taken away many peoples disposable income and Netflix’s limited online library may have caused customers to question if it was worth it or not.

Netflix needs to stay with the current trends of customers world-wide, keep creating Netflix original series, and keep updating their system when new devices are invented or entertainment improves. Netflix is a phenomenal way to stream the best content that is currently available to users and if they continue to provide excellent customer service at an affordable rate then I will continue to be a loyal customer for many years to

First formed in 1991, Netflix has become today’s predominant video rental service. They offer a hybrid service allowing DVD delivery by mail as well as streaming movies and TV shows via their company website or access on 200 other devices. Their unique business process has netted them over 16 million subscribers and revenue around $500 million annually. The reason for their growing success can be attributed to a good business model and just as important, properly implemented systems. An extremely efficient supply chain management system (SCM) and customer relationship management system (CRM) have helped Netflix become the world’s largest video subscription service.

Instead of various local chain stores, Netflix operated from a single virtual store that offered customers new rental features. The web services platform utilized customization and a user-friendly design to facilitate renting movies. “CineMatch,” a proprietary developed application, tailored the virtual store to each subscriber. This technology produced customized rental suggestions for customers while maximizing potential inventory. “CineMatch” incorporated a subscriber rating system of past rentals to generate more efficient and personalized future recommendations. The web-based services also improved selection through the ability to easily browse Netflix’s large inventory catalog and add selections to a personalized “Queue,” which lists movies customers have scheduled to receive. Instead of being forced to navigate through the traditional genre and alphabetized catalog, Netflix offered an easier movie selection process. Besides the selection efficiencies, members have the ability to share ratings, reviews, and movie selections with each other through the “Community” feature.

Netflix has around 75 million subscribers today which suggests that it is a very popular organisation. Netflix at the moment serves many markets across the world whinch included the US and Europe. Netflix suffers from competition from companies such as Amazon prime. Both of these companies compete to gain customers in this compact market. Netflix's corporate strategy fits in with their business level strategy as they deal mainly with DVD rental via online streaming. The deal that is in place with Warner bros has a major impact on how Netflix conducts itself. If other online streaming companies don't face this deal of not being allowed to stream their contents untill 28 days after the public release date then other companies have a competitive advantage which would lower Netflix's revenue. This would cause customers to leave Netflix as they may be able to see films at an earlier date with rival

Netflix is able to offer its customers a flat monthly fee for services, no contract requirement, no late fees, a large variety of television shows and movies, in a convenient way, at a reasonable price.

The story of Netflix is a story about the American dream; this was a long shot idea that turned into a million dollar business. They started from a small company that was a rival to then powerhouse blockbuster video. They started by sending DVD’S through the mail, to streaming them online. This happened in just a couple of years. This paper is about the questions concerning the case in chapter four of the text.

The CineMatch software also allows Netflix to maximize their library utilization. Increasing the demand for older or smaller market movies not only assists Netflix in better meeting subscriber demand but also decreases the payout of revenue sharing that often accompanies the most popular new releases. Netflix has revenue sharing contracts with most of the major movie studios. Under the agreements the firm pays a percentage of the subscription fees for a predetermined period of time in exchange for receiving the most popular titles at a considerably discount over the whole sale price (Netflix SEC).

The resources that are significant for Netflix are divided into two categories that are tangible and intangible. The tangible resources of the company include financial assistance, organisational and physical requirements. Financial assistance is considered as the basic resource because all the operations and functions of the business are dependent on this resource. For instance, the focus of the company is that revenue keeps on growing, however, in order to achieve this target, investment is needed which can be fulfilled by financial resource. Another division of tangible resource is organisation in which the company need organisational resource for conducting their functions. It is noticed that Netflix hired about 7 chief managers in order to ensure that business keeps on running smoothly. Moreover, they also hired 75 employees in their Beverly Hills. These are the organisation resource, which are also required for performing the basic activities of the business. In terms of physical resource, the company needs number of DVDs to provide service. It is also one of the important resources for Netflix because their function takes place on this particular resource. While on the other hand, intangible resources include human resource in which the company focused on hiring competent and skilled employees (Rothaermel, 2012; Teece,

To offer a wide selection of DVDs for its consumers, Netflix worked with more than 50 studios and distributors. Revenue sharing arrangements

The online movie rental business is changing. As technology changes, DVD’s will not be the medium of choice. The shift will be downloadable movies. Most people enjoy the ability to watch a movie immediately, thus another of Netflix’s

First of all, it offers a “prepaid subscription service” that allows customers to simply subscribe and pay a fixed fee per month. This gives the customer the ability to rent unlimited movies, something never heard of in this industry. In addition, customers are also worry-free about returning movies late since Netflix did away with all late fees. It must also be stated that in contrast to other companies that offer subscription based services, Netflix has made it relatively easy to unsubscribe from the packet or service the customer has selected. One may think this is a poorly thought idea, but it has helped customers return. These returning customers are satisfied and