The report starts by identifying creativity and innovation as the key to Netflix past success as Harold has consistently shown in his decisions throughout the history of the company taking bold action to chase un-ventured routes to satisfying customer needs.
The essence of the report however, is to highlight the issues surrounding the current technological advancements in the DVD rental market now that VOD has become a feasible and realistic platform that can be supported. Netflix is faced with a multitude of options and my argument is that it must base its decision upon the long term strategy of the business.
There is still a growing demand for DVD’s in their physical format proven by their increasing rate …show more content…
Blockbuster didn’t see Netflix’s offering as a threat until 2004 after Netflix had gained an extensive market share.
Netflix learnt to experiment (Liedtka, 2006) in creating this new online market, the company had no way of learning from the mistakes of competition that had previously ventured into the market. For example Hastings tested the marketing via trial and error originally using the Netflix website as a portal for selling theatre tickets and a price comparison service for various products online which proved unfruitful, it soon became clear that focus was needed and they decided to concentrate on the DVD rental business there forth.
Blockbuster could have easily destroyed Netflix if they had foreseen the potential earlier but they didn’t, highlighting the problems surrounding big companies with the mentality that because they are big they don’t need to change. Lack of innovation has cost Blockbuster dearly sending them into bankruptcy within a 5 year period. This is what happens in a market influenced by technological advancements.
Analysis of issues
Netflix has been monitoring the development of new technology, waiting for the time when technology had advanced to support VOD and now that time has come. VOD is a natural result of technological advancements and looks to become the new format for media boasting the benefit of making films instantly accessible to