Case Study 1

Challenges of a New Web Business

In the case of Netflix it is a very interesting venture. It could very well be the wave of the future. With the majority of the world watching movies at home, do to the cost of going out to the theater and watching the movie. Home entertainment is a up and coming business. The average person would much rather watch a movie in the comfort of their home without fighting the crowds and the theaters taking a bite out of their pocket with the high ticket prices and the expense of the concessions. A few questions will look at the future of businesses such as Netflix and if they will be able to survive in the every growing Internet trade market.

Case Study Questions:

1. What are the advantages and limitation of NetFlix’s present use of information

technology to support its business?

Advantages:

• Ease of just clicking and ordering the movie you want. No waiting in line or speaking on the phone with operators.

• The ease and simplicity of the webpage makes it really user friendly and it is not that hard for even the Internet illiterate to understand.

• Ready availability to your account makes it easy to know your current balance and what you have viewed.

Disadvantages:

• With the sensitivity of DVD’s "ie dust, scratching" when the user does return it damage could occur during the users possession.

• The turn around time could start to frustrate users. If they wanted the movie by a certain time and a unforeseen delay came it could tend to lead to negative feedback.

• Disloyal customers who either do not return their selection on time or do not even bother to return it at all. Sure they will have the customers credit card but all a customer would have to do it have the card they used at rental time deactivated and they received a free DVD movie.

2. What additional business uses of Internet and other information technologies would your recommend to NetFlix.

Some other information that they may consider adding to their page is manufactures of DVD players. DVD is just beginning to peak and is headed up. Users are still attached to their VCR’s and are reluctant to switch to DVD in large due to rumors. A reputable company such as Sony or Magnavox would look great and browsers would most likely go to look at the sites causing Netflix to receive kickback.

3. What business moves should NetFlix make to improve their changes for business success?

Some options that they should look at are insurance, give the customer the option of paying say 25 cents per DVD that would cover any damage that may occur to the DVD during the customer having it. Video Outlets use this tool and many customers like the security of say the DVD was scratched or cracked during them having it they are not liable and to a customer a quarter is better than say $25.00. This would generate revenue for those disloyal customers that do damage or keep the DVD.

Featuring more information on DVD players or manufacturers of DVD players would be a huge plus. This would give the VCR addicts a taste of the capabilities and pluses of DVD players.

Overall this could be a successful venture with a few shadowy areas. Reputable customer base would be my greatest concern. The founders have probably looked into this and have a means of making up for losses they do receive

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