Marketing Strategy Textbook
Case Study: Netflix Fights to Stay Ahead of a Rapidly Changing Market
Synopsis:
In the face of changing technology and shifting customer preferences with respect to movie distribution, video rental giant Blockbuster fell to its competition. Meanwhile, Netflix has grown to become the top rent-by-mail and video streaming company, while other strong competitors have emerged to dominate movie distribution via kiosks (Redbox) and online (Apple, Amazon, Hulu, and others). Looking to the future, Netflix's survival depends on its ability to adapt to and adopt new technology and marketing practices issues Blockbuster failed to navigate due to its reactive, rather than proactive, stance toward a rapidly changing market. Netflix faces an uncertain future as the DVD rental sector approaches the end of its life cycle. However, the company is poised to dominate the video streaming sector for the foreseeable future. The problem is, the future changes rapidly in this industry.
Questions
1. What role will Redbox play in the development of Netflix's strategic plans? How threatening is Redbox to Netflix's future?
2. How will new competition from digital content providers force Netflix to alter its strategy?
3. What new opportunities do you see in the movie streaming business, or the entertainment industry as a whole?
4. Do you think Netflix will remain the dominant force in both streaming and movie rentals? Why or why not?
5. What could Netflix have done differently to ensure Qwikster's success?