The Walt Disney Company and Watch Instantly

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Netflix: Disintermediator or Disintermediated?

1. As completely as possible, sketch the value chain for Netflix from the production of content to viewer. Netflix is a company that allows consumers to sign up for a membership that sends shows and movies on DVD, in the mail. Members can order them and return them at their convenience. Once you return a disc, Netflix will send a new one to you that same day. The monthly fee depends on how many discs you plan to receive at a time, such as one, two, or three. Part of a Netflix membership includes watching movies on your computer using the Netflix movie viewer. To enhance your viewing experience, you can optimize your Internet connection to improve the quality of the movie viewer.

2. How does horizontal and vertical conflict impact Netflix? In marketing, vertical conflict is conflict that occurs between organizations that work together to provide the same product to the consumer. For example, a business selling potatoes might have a conflict with a supermarket that sells the potatoes. A horizontal conflict is one that occurs between two enterprises that might work together, either directly or indirectly. For example, a bookstore might have a coffee shop owned by a different business operating in the bookstore.

3. How does Netflix add value for customers through distribution functions? Netflix has another competitor to watch out for. Movie Gallery's principal activity is to provide retail home video in rural and secondary markets. They offer a wide selection of movies and video games for rent and sale. Movie Gallery has developed and implemented a flexible and disciplined business strategy that centers on driving revenue growth, maximizing store level productivity and profitability and minimizing operating costs.

The stores offer from 4,000 to 15,000 movies and from 200 to 1,000 video games for use with most video game platforms. Although Movie Gallery, Inc. has not executed any online rental...
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