Net Flix Case Study

1. Only a few of the dot-com businesses that have tried to startup have made it past the beginning stages. The movie and entertainment industry is constantly evolving which makes it even harder for a movie based dot-com business to flourish. With the ease it takes to go to Wal-Mart or Blockbuster to rent or buy a film, the online movie business has been forced to develop software and technology that makes it easier to rent movies. Online movie rental businesses need to adapt to the fact that people may be able to download movies onto their televisions or computers instead of renting.

2. Netflix has a vision to “change the way people access and view the movies they love.” Over the next four to seven years Netflix would like to have customers in five percent of all U.S. television households. This would be equal to approximately five million subscribers. This vision can be met by staying ahead of their closest competition, Blockbuster and Wal-Mart.

3. Netflix wants to provide all the benefits of a movie rental store without the hassle of having to return the rentals before being charged a late fee. Customers would only be able to keep out a certain number of movies at a time. For a set price the customer could watch the movies they want, without late fees. Customer satisfaction was achieved through fast delivery, low prices, and allowing the purchaser to see the movies they want to watch with less hassle. Browsing for movies with the click of a button is quicker than going to the store and walking through aisles to find the right selection. The advantage that Netflix has is convenience. Their customers find it easy to browse and rent movies, while having them delivered in a minimum amount of time.

4. Netflix is based mainly on movies, while Blockbuster, Wal-Mart, and others also carry a selection of video games and a wider collection of genres. Wal-Mart carries a name that attracts many customers due to the low prices and the company name. It has also expanded to a rental DVD company very similar to Netflix. Customers can pay a fee for unlimited service and a selection like that of the Netflix company.

5. The online movie rental business is using fast delivery, and wider selection to attract new customers. Netflix also uses a recommendation system to attract more traffic on their site. This system has accounted for about 50% of traffic on the site. Customers feel that they can rent more movies that they want through the unlimited rentals plan. With more people becoming comfortable with the internet and hardware improving, the online movie industry is able to receive more recognition.

6. Some of the key factors needed to be successful in the online movie rental business are fast and free delivery, wide selection of many genres, easy access, and reliability. By delivering the product to the customer free of charge and quickly, this allows the consumer to do more from the comfort of their own home. Wide selection is definitely important because many people have different tastes in movies. Easy access through improved technology allows customers to browse without problems finding what they want. Allowing the consumer to get what they want with less hassle and cheaper prices keeps customer satisfaction high.

7. Strategically Netflix has changed the way that people can obtain the movies they would like to watch. Allowing a wide selection at cheap prices through the internet was a very innovative way of creating a new market for movies. The strategy to allow movie rentals without late fees, and also providing multiple rentals at a time attracted many new customers. Financially the company’s sales have continued to rise every year that they have been in business. At the same time that sales have risen, expenses have also gone up each year. Due to expansion and better technology the expenses will naturally rise. As long as the sales continue to rise the company should be in great financial shape. Competitor’s sales have also continued to rise similarly to Netflix. Although competitors’ profits maintain steady growth also, Netflix is constantly attracting new customers through great service and recommendations.

8. Netflix seems to have a great reputation for customer service. Nine out of ten customers saying that they were so pleased they were willing to tell their family and friends to join also. Netflix