Netflix Case

tflix case

Case: Netflix

Question: What are differences between the major brand, market, service and technology position which define the online strategy of Blockbuster and Netflix?

In recent years the video rental industry has evolved, the raise of the internet commerce provides an opportunity and a new channel to promote and realize movie rentals. Netflix was one of the pioneers in this matter confronting the leader in movie rentals with brick and mortar stores, Blockbuster.

Today Netflix is the world’s largest movie rental service with over 6.3 million members and a deep collection of many movies, no “physical” stores, low prices, no late fees, with a friendly web site and a strong customer data base. [1]

Blockbuster is trying to modify their business model and keep close to the innovations in the video rental industry.

In the Business-to-Consumer e-Strategic grid it is possible to appreciate the general differences and the positions between Netflix and Blockbuster. Netflix is firmly located in the Market Quadrant with a focus and “ability to integrate marketing, customer service and use of information and technology to deliver a profitable long-term market share or niche strategy”[2]. They moved from the Technology Quadrant to the Service Quadrant focusing on developing and retaining customers to finally be located in the Market Quadrant where they are securing a profit; while Blockbuster is stuck the Brand Quadrant. As they began in the Technology Quadrant as Netflix, but their business model (including all their stores) was not based in technology, they were focused on marketing and trying to show people their mail order offering. The problem with Blockbuster is that they waited too much in offer the online service, so they failed to deliver on the promises their brand represent and what the market was offering. Right now, Blockbuster to move on to the Market Quadrant has to secure a profit in their current channel. They...