"Competition in the Movie Rental Industry, Part 2" discussion of M.Azim Ulfati

"Evaluate Netflix’s current strategy and determine if the strategy is sustainable."

The current Netflix’s strategy is subscription business strategy, which is growing and is consisting of streaming and DVD-by mail content.

In order to keep the customers happy, Netflix uses a customer intimacy strategy and makes it very easy and fast for subscriber to access a wide selection of content on a wide selection of devices.

Subscribers are offered a low price choice of deliver method and platform. This strategy will be very sustainable and effective and has helped grow the company’s resources and make the company to compete in the market with other companies.

"Identify a Netflix strength and suggest how this strength may be leveraged in the marketplace to ensure a competitive advantage."

I think Netflix’s strength is that it entered the market for DVD rentals at a time when there were few other competitors in the market and let them establish their brand name and image for providing unique service. Netflix was the very first company that started offering DVD rental by mail and later on online subscription and offered customers a greater variety of DVDs and movies in the marketplace among the competitors and today Netflix entry has allowed it to maintain a high relative market share in the online DVD rental industry. I think if Netflix wants to be on the top of the company I would suggest that it should try its best to produce the highest quality service and keep its online system subscription updated based on the needs and wants of customers.

"Predict the future of the movie rental industry. Provide support for your prediction."

I will predict that the future of the movie rental industry will be based on competition with rivals, innovation and effective strategy based on the needs and wants of customers. Netflix bundling of DVD rental with streaming movies will enable them to work out and distribute movies digitally while continuing to build a large customer base of subscription. VOD will continue to gain popularity and will eventually unseat DVD and other physical forms of media. Netflix will make its streaming services available under a separate subscription plan of its own. This will happen when the penetration of technology allowing for viewing streaming content on high-end TVs is substantially high. The Apple tv is used to wirelessly connect to one’s computer and retrieve movies downloaded from the iTunes store on to the computer then play those movies on tvs.

I would predict that if Netflix hesitate to enter or does not gain sufficient experience in the VOD market, it will only see diminishing market shares, especially as DVD and other formats may begin to lose popularity in favor of purely digitally transmitted media.