Netflix Business Strategy Quiz

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What technological constraints delayed Netflix's entry into the market?

Technological limitations in streaming technology

Storing movies and the need for internet

High real estate costs for distribution centers

Lack of distribution centers and high DVD shipping costs (correct)

What was Netflix's value proposition?

Low-cost distribution centers and real estate

High economies of scale and low willingness to pay

Competing on price with other DVD rental stores

Differentiation and high willingness to pay (correct)

How did Netflix dominate two 's-curves'?

By expanding into international markets

By acquiring other DVD rental companies

First with DVDs, then with streaming (correct)

First with VHS, then with DVDs

In the streaming industry, what are the substitutes as compared to the DVD industry?

YouTube, cable, Instagram, TikTok Signup and view all the answers

Why was Blockbuster slow to respond to Netflix's disruption?

Blockbuster was in the mature phase Signup and view all the answers

What were the two technologies that enabled Netflix's original business model?

DVD and innovation in DVD by mail Signup and view all the answers

What resources allowed Netflix to deliver value?

Low-cost distribution centers and economies of scale Signup and view all the answers

What was the impact of DVD shipping costs going down for Netflix?

Lowered average cost and raised willingness to pay Signup and view all the answers

How did Netflix's distribution centers contribute to their competitive advantage?

Lowered average cost and improved economies of scale Signup and view all the answers

What was the reason for the delay in Netflix's entry into the market?

Technological and logistical constraints Signup and view all the answers

What differentiated Netflix from its competitors?

Innovation with DVD by mail and dominance in streaming Signup and view all the answers

What allowed Netflix to disrupt themselves with the streaming industry?

Innovation and adaptation to new technology Signup and view all the answers

Why did Blockbuster’s total access fail?

It lacked the underlying cost structure that Netflix had adopted Signup and view all the answers

How did Netflix make the leap from an old technology s-curve to a new technology s-curve?

They made the jump with some luck and their existing subscriber base Signup and view all the answers

Where does eHarmony lie in determining the competitive scope?

Between differentiation and niche quadrants Signup and view all the answers

What are complements in the context of Porter's Sixth Force?

Goods whose prevalence enhances the value of another Signup and view all the answers

Why do companies like PlayStation reveal the console cost months before release?

To let developers know how much they will sell and ensure high willingness to pay Signup and view all the answers

What is the reason that a three-sided platform is difficult in the gaming industry?

Existing consoles have low prices, making it hard for third-party hardware makers to profit Signup and view all the answers

Why does Xbox charge royalties while Windows does not?

To make money on the side of the games and extract more money from high willingness to pay Signup and view all the answers

What is the correlation between gamers' willingness to pay and the number of games they buy?

It has a high correlation Signup and view all the answers

What is the impact of indirect network effects in the gaming industry?

They increase barriers to entry and willingness to pay Signup and view all the answers

What is the challenge with a three-sided innovation platform in the gaming industry?

Existing consoles have low prices, making it hard for third-party hardware makers to be profitable Signup and view all the answers

Why does Windows not charge royalties for gaming, unlike Xbox?

There is a low correlation between willingness to pay and the number of games bought Signup and view all the answers