Case ID: 607138     Solution ID: 30091

Netflix Case Solution


Since his time in the corporate world Reed Hastings wanted Netflix to pursue the mission of providing the best home movie service that he firmly believed would maximize the customer satisfaction in relative to what was provided by the traditional retail rent a movie model. For this idea to become successfully accomplished, the company experience drastic strategical shifts within its structure and assets. This eventually led to a much developed and refined business model that created a disruptive chaos for especially those operating the video rental chain stores. Netflix not only possessed a large national inventory but also an effective recommendation system that calculated the viewership across the broad catalog. By having exposure to an expansive customer base, Netflix earned a successful name in the industry and became increasingly popular amongst the low profile and independent films and documentaries. It managed to enjoy its status as a known and convenient distribution channel for the film industry. Blockbuster despite being the country’s largest video rental firm took ample time before reacting to the new model initiated by the Netflix and thus brought about the “Blockbuster Online”. During this time aggressive prices were used and eventually created a heated competitive environment between the two.

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