Exhibit A
Netflix Comparative Advantage Analysis
Compared to retail competitors like
Blockbuster & Redbox,
Netflix’s capabilities appear to be:
Product Management
•
Ability to develop and deliver superior-quality and/or customized goods and services. Inferior Equivalent Superior
Communications Management and Brand-building capability
• Ability to create & manage customer value perceptions leading to high levels of brand equity, using effective: positioning, advertising message delivery, personalized communications, & integrated mktg communications
Inferior Equivalent Superior
Pricing Management
• Ability to extract the optimal revenue & profit from customers, e.g., through a sophisticated yield management system capability
Channel Management
• Ability to establish and manage channels of distribution that effectively and efficiently deliver value to end-user customers
Customer Relationship Management
•
Ability to identify and initiate, maintain, and leverage relationships with profitable prospects and customers to create superior customer-level profits.
Requires d ata collection & interpretation capability & individual targeting
& personalized communications capabilities for individual customers.
Market Sensing & Customer Insights
• Ability to learn about customers, competitors, channel members and the broader market to develop actionable market intelligence and customer segmentation and targeting schema
Inferior
Inferior
Inferior
Inferior
Inferior
Equivalent
Equivalent
Equivalent
Equivalent
Equivalent
Superior
Superior
Superior
Superior
Superior
Marketing Planning & Implementation
• Ability to conceive and implement marketing strategies that optimize the match between the firm’s resources (including multiple product lines/brands) and the marketplace to achieve superior sales and profits
Given this analysis, Netflix’s competitive advantage is best described as (if you think they have no advantage, describe what you think their best chance for establishing advantage might be and what capabilities would be required to achieve the advantage):
Compared to VOD competitors like
Amazon & Time Warner,
Netflix’s capabilities appear to be:
Inferior
Inferior
Equivalent
Equivalent
Superior
Superior
Inferior
Inferior
Inferior
Inferior
Inferior
Netflix’s competitive advantage is best described as:
Based on superior:
Equivalent
Equivalent
Equivalent
Equivalent
Equivalent
Superior
Superior
Superior
Superior
Superior

Demographics:
Geographic:
Psychological:
Behavioral:
Exhibit B
Customer Profiles for Netflix and Redbox
Netflix customer Redbox customer