Case #6: Netflixâ€™s Business Model and Strategy in Renting Movies and TV Episodes Assignment Questions 1. How strong are the competitive forces in the movie rental marketplace? Do a five-forces competitive analysis (refer to Chapter 3) to support your answer. 2. What forces are driving change in the movie rental industry? Are these driving forces likely to have a favorable or unfavorable impact on competitive intensity and future industry profitability? Use Table 3.3 on page 76 (The Most Common Drivers of Industry Change) and the supporting explanations on pages 72â€“76 for help. 3. What is your appraisal of Netflixâ€™s operating and financial performance based on the data from the case exhibits? What positives and negatives do you see in Netflixâ€™s financial performance? Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Netflixâ€™s recent financial performance. 4. What does a SWOT analysis of Netflix reveal about the overall attractiveness of its situation? 5. What 2 to 3 top priority issues does Netflix management need to address? What 2 to 3 top priority issues does Blockbuster management need to address? 6. What recommendations would you make to Netflix CEO Reed Hastings? At a minimum, your recommendations should cover what to do about each of the top priority issues identified in question 5. 7. What recommendations would you make to Blockbuster CEO James Keyes? At a minimum, your recommendations should cover what to do about each of the top priority issues identified in question 5.
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