Podcast
Questions and Answers
What is the term used to describe the rate at which customers leave a product or service?
What is the term used to describe the rate at which customers leave a product or service?
- Engagement rate
- Churn rate (correct)
- Retention rate
- Acquisition rate
Which of the following accurately describes the First Sale Doctrine?
Which of the following accurately describes the First Sale Doctrine?
- It permits the distribution of legally acquired physical copies. (correct)
- It mandates that all content must be distributed for free for a short time.
- It allows firms to distribute digital copies of content.
- It restricts the reproduction of digital products.
What is a primary advantage of Netflix's use of collaborative filtering through Cinematch?
What is a primary advantage of Netflix's use of collaborative filtering through Cinematch?
- It increases fixed costs.
- It enhances customer loyalty by personalizing experiences. (correct)
- It eliminates the need for content acquisition.
- It limits the types of content available to customers.
What does the term 'windowing' refer to in the context of content availability?
What does the term 'windowing' refer to in the context of content availability?
Which of the following best describes a marginal cost?
Which of the following best describes a marginal cost?
What competitive advantage did Netflix have over Walmart and Blockbuster?
What competitive advantage did Netflix have over Walmart and Blockbuster?
What feature of Netflix's business model allowed it to offer a wide range of titles?
What feature of Netflix's business model allowed it to offer a wide range of titles?
Which of the following technologies did Netflix use to enhance its distribution capabilities?
Which of the following technologies did Netflix use to enhance its distribution capabilities?
What major investment did Netflix make for its delivery infrastructure?
What major investment did Netflix make for its delivery infrastructure?
When companies like Netflix become public, what must they disclose?
When companies like Netflix become public, what must they disclose?
What does Netflix's unmatched data asset provide the company?
What does Netflix's unmatched data asset provide the company?
Which element is crucial for Netflix's ability to manage scale?
Which element is crucial for Netflix's ability to manage scale?
What element does the concept of 'long-tail' refer to in the context of Netflix?
What element does the concept of 'long-tail' refer to in the context of Netflix?
What does strategic positioning refer to?
What does strategic positioning refer to?
What characterizes economies of scale?
What characterizes economies of scale?
What is meant by inventory turns?
What is meant by inventory turns?
What do imitation-resistant value chains rely on?
What do imitation-resistant value chains rely on?
How do switching costs affect consumer behavior?
How do switching costs affect consumer behavior?
What does the term 'fast follower problem' refer to?
What does the term 'fast follower problem' refer to?
What is a key characteristic of network effects?
What is a key characteristic of network effects?
What is a critical factor for competitive advantage according to the resource-based view?
What is a critical factor for competitive advantage according to the resource-based view?
What does operational effectiveness involve?
What does operational effectiveness involve?
What is meant by straddling in a competitive context?
What is meant by straddling in a competitive context?
What role does branding play in competitive advantage?
What role does branding play in competitive advantage?
How does viral marketing contribute to a business?
How does viral marketing contribute to a business?
What factors comprise the primary activities of a value chain?
What factors comprise the primary activities of a value chain?
Which of the following is NOT a characteristic of commodities?
Which of the following is NOT a characteristic of commodities?
What is the purpose of APIs in a business context?
What is the purpose of APIs in a business context?
Which of the following is NOT one of Porter's five forces?
Which of the following is NOT one of Porter's five forces?
How does Zara minimize the risk of markdowns and write-offs?
How does Zara minimize the risk of markdowns and write-offs?
What does an omnichannel strategy integrate?
What does an omnichannel strategy integrate?
What is one of the key benefits of Zara's use of RFID tags?
What is one of the key benefits of Zara's use of RFID tags?
What is the primary focus of the bargaining power of buyers in Porter's five forces?
What is the primary focus of the bargaining power of buyers in Porter's five forces?
What technology does Zara utilize to gather customer preferences in real-time?
What technology does Zara utilize to gather customer preferences in real-time?
How quickly can Zara design and launch a product in stores?
How quickly can Zara design and launch a product in stores?
Which of the following strategies does NOT directly relate to Zara's inventory management?
Which of the following strategies does NOT directly relate to Zara's inventory management?
What significant change in sales did Zara experience during April 2020?
What significant change in sales did Zara experience during April 2020?
What is the main consequence of having too much unwanted product in retailer inventory?
What is the main consequence of having too much unwanted product in retailer inventory?
What aspect of customer demand does Zara’s design process heavily rely on?
What aspect of customer demand does Zara’s design process heavily rely on?
What is a potential effect of information asymmetry in pricing?
What is a potential effect of information asymmetry in pricing?
Which of the following is true about Zara's supply chain management?
Which of the following is true about Zara's supply chain management?
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Study Notes
Sustainable Competitive Advantage
- Sustainable competitive advantage is achieving financial performance that consistently outperforms industry peers.
- Operational effectiveness refers to performing the same tasks better than rivals.
- Fast follower problem arises when a competitor enters a market quickly with a comparable or superior product at a lower cost.
- Strategic positioning involves performing different activities than rivals.
Resource Based View
- To achieve sustainable competitive advantage, firms must control a set of exploitable resources that are valuable, rare, imperfectly imitable, and non-substitutable.
Imitation Resistant Value Chains
- Value Chain: set of activities through which a firm creates and delivers a product to customers.
- Primary activities include logistics, inbound and outbound operations, marketing and sales, and service.
- Secondary activities include firm infrastructure, human resource management, technology/research & development, and procurement.
- Brands can be a source of competitive advantage by representing a symbolic embodiment of all aspects connected with a product or service.
- Viral Marketing can be a powerful tool for spreading brand awareness.
- Scale Advantages are benefits that firms gain from their size, such as:
- Economies of Scale: Spreading investment costs across increasing units of production.
- Switching Costs: Cost consumers incur when switching from one product to another.
- Differentiation refers to offering products or services that are nearly identical but offer unique value propositions.
- Network Effects: When a product or service becomes more valuable as more people use it.
- Distribution Channels: The paths through which products and services reach customers.
- APIs (Application Programming Interfaces) are tools that allow firms to connect their systems and services with those of other companies.
Porter's Five Forces
- Intensity of rivalry among existing competitors
- Threat of new entrants
- Threat of substitute products or services
- Bargaining power of buyers
- Bargaining power of suppliers
Price Transparency
- Price transparency refers to the ease with which consumers can compare prices across different sellers.
- Information Asymmetry exists when one party in a transaction has more information than the other.
Zara
- Zara's success is based on its ability to respond quickly to changing customer demand.
- Zara leverages data to understand customer preferences and tailor its designs accordingly.
- Zara uses a vertical integration strategy, owning several layers of its value chain.
- Inventory optimization models help Zara manage its stock levels effectively.
- Zara's manufacturing facilities are close to its stores, allowing for fast turnaround times.
- Limited production runs and full-price pricing minimize the risk of leftover inventory.
- Zara has adapted to the shift towards e-commerce through its omnichannel strategy.
- Zara's RFID system helps track inventory and facilitate efficient logistics.
Netflix
- Netflix has successfully transitioned from a DVD rental business to a streaming service.
- Netflix's strength comes from its customer service, brand, scale, and data assets.
- Netflix has a long-tail strategy, offering a wide selection of unique titles.
- The company's automated distribution centers enable fast overnight delivery to customers.
- Netflix uses algorithms like Cinematch to personalize customer experience based on viewing history and preferences.
- Netflix leverages data to optimize its content library and reduce churn rate.
- Netflix operates on a fixed cost structure, with marginal costs associated with streaming content.
- Netflix uses a "coopetition" strategy with companies like Amazon.
- Content acquisition is a significant challenge for streaming services like Netflix.
- The First Sale Doctrine allows firms to distribute physical copies of legally acquired copyright-protected products.
- Netflix has adopted a windowing strategy, limiting content availability for specific time periods.
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