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SMG SI 422 (16)
John Kirks (16)
Lecture 18

SMG SI 422 Lecture 18: Class 18 - Netflix

2 Pages

Strategy & Innovation
Course Code
SMG SI 422
John Kirks

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Carmen Zheng 41117 Prof. Kirks SI422 Class 18 Netflix 1. Why you have been long or short Blockbuster stock at the time of the case? Why? What about Netflix? Why? I would short Blockbuster stock at the time of the case because of how Blockbuster ignored the threat of Netflix and didnt acknowledge them until they grew much bigger. Then, they had to race and launch a business model similar to Netflix. I would long Netflix because Netflix entered the market when the Internet emerged. They started anticipated what the customers would want instead of what they needed now. They had already been developing VOD technology when other companies started using them. 2. Did Netflix do the same jobs for consumers that Blockbuster did? How did this evolve over time? Although they both provided movies and shows for consumers to watch, they did it very differently. Blockbuster had retails locations where consumers would be able to come and rent out popular movies whereas in Netflix, you had a subscription that would mail DVDs to your home and you were able hold up to three movies at a time. Netflix had initially did pricing the same way traditional video stores did, 4 per movie plus a 2 shipping charge and they had a due date and if it wasnt return by that time, they would incur a late fee. Netflix later offered unlimited movies, holding up to 4 at a time, for a lower price. They achieved that by buying older movies that were cheaper and created a recommended system that recommended those old movies. Blockbuster went online as well but a couple years later. They tried to match what Netflix did and better but it made them suffer through huge operating costs and it wasnt made up in revenue. Netflix said if they came 4 years early, Netflix might not have survived 3. As you examine each major shift in Netflixs strategy, what might have been an assumptions checklist that they might have used at each stage? What assumptions checklist might you use for Video on Demand? An assumption checklist they might have done at each stage would be to determine that they were a type of disruptive technology. They were anticipating what the customer needed as opposed to wanted. They increased their targeted characteristics of convenience, value, and selection. I would use the same checklist for Video on Demand.
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