Netflix Case Study Essay

* Do a Balanced Scorecard Analysis
* How do Customers view us?
* Customers view Netflix as a revolutionary way to watch their favorite shows and movies. With over 70,000 different titles, Netflix has accumulated over 20 million subscribers.
* The main characteristics that appeal to customers are:

1) Value
2) Convenience
3) Selection”.

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* The ability to watch their favorite movie from the comfort of their own home cannot be matched. From delivering DVDs in 1997 to having an “all you can eat” style online today, Netflix is certainly on the rise and customers absolutely love the product. * How do shareholders view us?

* According to Netflix’s financial statements, shareholders should be rather impressed with the work that Netflix has done. * With a gross profit of $370,600,000, which seems to be growing exponentially, Netflix shareholders have no reason to be upset with this up and coming company. There is always room for innovation, and shareholders will jump at the chance to expand and become a more diversified company. * What core competencies do we need?

* The core competencies that Netflix critically needs are anchored in their marketing techniques. They are a well known company, but as the text says, “70% of the U.S. population lives within a 10 minute drive of a Blockbuster”. It is difficult to compete with a company that has had brand loyalty for years. * Getting the company name out more would be extremely beneficial to the company in order to secure value and a potential competitive advantage. * The best core competency created by Netflix thus far is the ability to recommend shows and movies to customers due to their previous movie choices. * How do we create value?

* Netflix creates value by limiting the tangible assets that a competitor such as Blockbuster pays for on a daily basis. * Blockbuster pays wages to workers, rent, and overhead. * Making Netflix digital was an extremely brilliant plan that would save money and make customers happy at the same time. Constantly updating and making things better and more efficient are essential in an online business. * As stated in the case, “Our explicit strategy is to invest in things that are strategically relevant to customer satisfaction potential”, and when customers are happy, value is always created. * Do we have a competitive advantage?

* The competitive advantage held by Netflix is that they realized that 70% of movie rentals are new releases, and they took advantage of that statistic. * Therefore, they took the initiative to start mailing new releases to the customers in order for it to be more convenient. * Brand name and customer awareness gives Netflix an enormous competitive advantage over new entrants. * Today, with the online warehouse of movies and Video On Demand, Netflix has severely put a damper on the operations at competing firms.