a day in the life of frederic godé
Analysis part
Question 1
In its competition with Netflix, where did Blockbuster go wrong? How was the use of customer data a key differentiator? How might Blockbuster have better positioned itself against Netflix?
Answer
3 things that Blockbuster goes wrong are:
1. Slow & Inadequate Response
“No Late Fees” program was misleading
“Total Access” program was not well integrated – customers had to maintain separate accounts for the Web-based system and the store.
2. Structural Issues
Stores were franchise-based and Web site was maintained by corporate
Capex requirements for starting a separate Web-based logistics system to deliver DVDs by mail
3. Lack of Information Systems
Lack of knowledge about its customers’ preferences and behaviors
Lack of an appropriate CRM system
Question 2
What are the core competencies of Netflix’s current business model (primary DVD-by-mail with an online component)? Assess the value of Netflix’s business as described in the case
Answer
Core competencies of Netflix’s current business model
1. Flexibility
• Subscription model – no late fees!
• Customers could rent and watch movies on their own schedules
2. Selection and Logistics
• No physical stores
• Allowed deep selection in a wide variety of genres
3. Convenience
• Mail delivery obviated the need to drive to bricks-and-mortar stores
• Queuing system on Web site allowed customers to have a constant flow of movies
4. Customer Insight
• Cinematch collaborative filtering algorithms aided the discovery process – better customer experience
• Recommendation system and analytics allowed deeper understanding of customer trends, which let Netflix adapt better and more quickly
Question 3
What effects will the rise of the VOD market likely have on Netflix’s business model? How does VOD threaten Netflix’s business? What opportunities does it present?
For opportunities, Netflix has ability to license its platform, be the benchmark in movie streaming and higher impact of
Question 1
In its competition with Netflix, where did Blockbuster go wrong? How was the use of customer data a key differentiator? How might Blockbuster have better positioned itself against Netflix?
Answer
3 things that Blockbuster goes wrong are:
1. Slow & Inadequate Response
“No Late Fees” program was misleading
“Total Access” program was not well integrated – customers had to maintain separate accounts for the Web-based system and the store.
2. Structural Issues
Stores were franchise-based and Web site was maintained by corporate
Capex requirements for starting a separate Web-based logistics system to deliver DVDs by mail
3. Lack of Information Systems
Lack of knowledge about its customers’ preferences and behaviors
Lack of an appropriate CRM system
Question 2
What are the core competencies of Netflix’s current business model (primary DVD-by-mail with an online component)? Assess the value of Netflix’s business as described in the case
Answer
Core competencies of Netflix’s current business model
1. Flexibility
• Subscription model – no late fees!
• Customers could rent and watch movies on their own schedules
2. Selection and Logistics
• No physical stores
• Allowed deep selection in a wide variety of genres
3. Convenience
• Mail delivery obviated the need to drive to bricks-and-mortar stores
• Queuing system on Web site allowed customers to have a constant flow of movies
4. Customer Insight
• Cinematch collaborative filtering algorithms aided the discovery process – better customer experience
• Recommendation system and analytics allowed deeper understanding of customer trends, which let Netflix adapt better and more quickly
Question 3
What effects will the rise of the VOD market likely have on Netflix’s business model? How does VOD threaten Netflix’s business? What opportunities does it present?
For opportunities, Netflix has ability to license its platform, be the benchmark in movie streaming and higher impact of