Netflix: David Becomes Goliath

Questions and Exercises

1. What are Netflix's sources of competitive advantage?
2. Does Netflix have a strong brand? Offer evidence demonstrating why the firm's brand is or isn't strong. How is a strong brand built?
3. Scale advantages are advantages related to size. In what key ways is Netflix "bigger" than the two major competitors who tried to enter the DVD-by-mail market?
4. What is the long tail? How "long" is the Netflix tail compared to traditional video stores?
5. What "class" of software does Netflix use to make movie recommendations? Think about Chapter 2 "Strategy and Technology": Which key competitive resource does this software "create"? What kinds of benefits does this provide to the firm? What benefits does it provide to Netflix's suppliers?
6. Could a new competitor match Netflix's recommendation software? If it did, would this create a threat to Netflix? Why or why not?
7. What is the Netflix churn rate and what are the reasons behind this rate?
8. Netflix uses technology to coordinate the process of sorting and dropping off DVDs for the U.S. Postal service. This application of technology speeds delivery. What other advantage does it give the firm?
9. How has Netflix improved its customer service operation? What results reflect this improvement?