Netflix Case Study Example | Topics and Well Written Essays - 2250 words

Netflix - Case Study Example Before Netflix, Blockbuster had been a sole giant of the industry but its business was totally focusing the rental DVDs through retail outlet points. Those retail outlets carried few employees who can hardly recommend to the customers about the movies except the hit releases. Yet, the company was serving the whole United States as no other competitor had such resources to expand such bigger chain of DVD rental locations. What Blockbuster strived hard is to open so many DVD rental outlets such that the farthest retail outlet is around ten minutes drive in the urban areas of United States. The hit movies and recent releases were the ones that were the major occupiers of the shelves of the Blockbuster’s rental outlets as the demand for lesser-known movies had been very slow and uncertain. With the entry of Netflix in the rental DVD industry, Netflix adopted a first mover strategy such that rather opening rental DVD outlets, it started its operations by renting out the DVDs through internet based web portal. The company made an investment in its website such that the subscribers subscribed their accounts on Netflix’s website and then they can choose their preferred movies from a wide collection of movies held by Netflix. Those DVDs, which are selected by the subscribers, are sent to them via direct mail through US Postal Services. In around a day, those movies are shipped to their respective destinations at a cost of $4 per movie along with $2 cost of shipping and handling. The biggest advantage reaped by the customers was that now they can even have the access to the lesser-known movies, which ordinarily cannot be easily available at the rental DVD outlets. Another greater advantage that Netflix provided to its customers was the waiver of â€Å"late fees† which substantially boosted its business. Pricing was also an important aspect through which Netflix climbed quickly in terms of reaping the profits. Firstly, the