Netflix Business Strategy Quiz

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Questions and Answers

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?

<p>YouTube, cable, Instagram, TikTok (B)</p> Signup and view all the answers

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

<p>Blockbuster was in the mature phase (A)</p> Signup and view all the answers

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

<p>DVD and innovation in DVD by mail (B)</p> Signup and view all the answers

What resources allowed Netflix to deliver value?

<p>Low-cost distribution centers and economies of scale (D)</p> Signup and view all the answers

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

<p>Lowered average cost and raised willingness to pay (B)</p> Signup and view all the answers

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

<p>Lowered average cost and improved economies of scale (B)</p> Signup and view all the answers

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

<p>Technological and logistical constraints (C)</p> Signup and view all the answers

What differentiated Netflix from its competitors?

<p>Innovation with DVD by mail and dominance in streaming (D)</p> Signup and view all the answers

What allowed Netflix to disrupt themselves with the streaming industry?

<p>Innovation and adaptation to new technology (A)</p> Signup and view all the answers

Why did Blockbuster’s total access fail?

<p>It lacked the underlying cost structure that Netflix had adopted (D)</p> Signup and view all the answers

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

<p>They made the jump with some luck and their existing subscriber base (A)</p> Signup and view all the answers

Where does eHarmony lie in determining the competitive scope?

<p>Between differentiation and niche quadrants (A)</p> Signup and view all the answers

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

<p>Goods whose prevalence enhances the value of another (A)</p> Signup and view all the answers

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

<p>To let developers know how much they will sell and ensure high willingness to pay (B)</p> Signup and view all the answers

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

<p>Existing consoles have low prices, making it hard for third-party hardware makers to profit (D)</p> Signup and view all the answers

Why does Xbox charge royalties while Windows does not?

<p>To make money on the side of the games and extract more money from high willingness to pay (A)</p> Signup and view all the answers

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

<p>It has a high correlation (D)</p> Signup and view all the answers

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

<p>They increase barriers to entry and willingness to pay (C)</p> Signup and view all the answers

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

<p>Existing consoles have low prices, making it hard for third-party hardware makers to be profitable (D)</p> Signup and view all the answers

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

<p>There is a low correlation between willingness to pay and the number of games bought (D)</p> Signup and view all the answers

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