1. How does the Netflix business model work? 2. Which firms are or have been Net
ID: 1230044 • Letter: 1
Question
1. How does the Netflix business model work?2. Which firms are or have been Netflix’s most significant competitors? How do their financial results or performance of their efforts compare to Netflix’s efforts?
3. What recent appointment did Reed Hastings accept in addition to his job as Netflix CEO? Why is this appointment potentially important for Netflix?
4. Why did Wal-Mart and Blockbuster managers, as well as Wall Street analysts, underestimate Netflix? What issues might you advise analysts and managers to consider so that they avoid making these sorts of mistakes in the future?
Explanation / Answer
1. How does the Netflix business model work? This is a firm in which, holding costs are minimized by offering cheap rentals to consumers. 2. Which firms are or have been Netflix’s most significant competitors? Blockbuster has been a major competitor as well as HULU How do their financial results or performance of their efforts compare to Netflix’s efforts? Blockbuster has a large market share because they not only offer movies through the mail but they also offer a brick and mortar store where transactions can happen on the spot. 3. What recent appointment did Reed Hastings accept in addition to his job as Netflix CEO? Board of microsoft Why is this appointment potentially important for Netflix? This is important because of opportunities offered through pairing up with microsoft. On microsoft xbox live, you can view net flix 4. Why did Wal-Mart and Blockbuster managers, as well as Wall Street analysts, underestimate Netflix? They all thought renting movies a-online and through the mail was an inconvenience to consumers. What issues might you advise analysts and managers to consider so that they avoid making these sorts of mistakes in the future? They need to change with technology and adapt to new situations as they come their way. Hope this helps
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