UCR-BUS 113 Extra Credit Case Analyses NetFlix 40 points possible, 10 points per question

CASE STUDY OBJECTIVES

Netflix is an example of a challenger who disrupted a strong incumbent through a superior business model. At the time the case was written, it was not at all apparent that the company would deal such a crushing blow to Blockbuster, as its value proposition appeared to be inferior. However its focus on tailoring its service to a job that its customers had, and the tight integration with a sophisticated operational model that had vastly superior economics made it the winner in the DVD rental market. The emergence of video-on-demand poses a new question for the company: how can or should it respond to what seems like a new disruptive challenge. With this context in mind, we aspire for students to use the case as a vehicle to: 1. Understand how disruptive innovations vs. sustaining innovations are framed relative to the context in which they exist. While most students will jump to the conclusion upon opening that VOD is disruptive, the case will lead them through Netflixs thought process in framing it as a sustaining innovation. 2. Examine how emergent strategies were built using experimentation and the collection of consumer data. See how management hypothesized and tested theories. 3. Practice using theories to predict the outcome of various choices for the video-on-demand direction

Case Analyses Questions

1. Would you have been long or short Blockbuster stock at the time of the case? How about Netflix? Why? 2. Did Netflix do the same jobs for consumers that Blockbuster did? How did this evolve over time? 3. Compare Blockbusters and Netflixs profit models. How might the differences affect the respective companys strategies? 4. As you examine each major shift in Netflixs strategy, what might have been an assumptions checklist that they might have used at each stage? What assumptions checklist might you use for VOD?

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