Netflix

NETFLIX CASE

Customers have flocked to Netflix because of the firm’s innovative strategies. It introduced DVDs for the technology adopters in contrast to VHS Cassette provided by the other traditional retailers. By its cross promotional programs with the manufacturers and sellers of the DVD players, It captured the market and offered the DVD by mail. Moreover, a traditional video store like Blockbuster has 5194 locations and stocks roughly 3,000 DVD titles on its shelves. At traditional retailers, shelf space is the biggest constraint limiting a firm’s ability to offer customers what they want. These stores were reluctant to stock the lesser known films because of its inconsistent demand so the shelves are mostly dedicated to the hit movies, which are top at box office. To put it simply, Blockbuster stocks blockbusters. Customers are left out with relatively narrow choices in the traditional stores. Netflix with its 44 distribution centers offers its customers a selection of over of 77,000 different titles and deliver the DVD by mail in one business day and became the best source for the lesser known movies.

Netflix came up with a personalized customer preference system. Upon signing up a new account, customers take a survey and based on it the software more accurately recommends movies that would appeal to him or her. The Consumers use the Netflix website to rate videos they’ve seen and specify their movie preferences. The software is integrated with its warehouses and recommends movies that are likely to be in stock so users aren't frustrated by a wait. If it does not have enough DVDs of a particular movie to meet the demand, software will recommend another title that it should have in stock. In the traditional retail stores the customers could generally select a title with a limited amount of advice from the sales staff. Traditional stores like Blockbuster rent movies, which are subjected to extended viewing fees....