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1. In 2007, few traditional media companies focused on video-streaming and it was at that time Netflix began experimenting with this technology. Although he demonstrated video-streaming in 2007 (as alternative to downloading of movies), Reed Hastings at Netflix believed that it wasn’t yet ready for primetime. He commented that: “The market is microscopic…DVD is going to be a very big market for a very long time.” Writing in the 2008 annual report, he noted: “In 2009, we will maintain our focus on improving our core services as well as gaining even greater traction with streaming.” At the end of 2011, Reed Hastings wrote in the CEO Letter: ” Our core strategy is to grow our streaming subscription business domestically and globally. We are continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more Internet-connected devices….and that the DVD portion of our domestic service will be a fading differentiator to our streaming success.”
2. Providing content in a convenient and unique way
3. First leader in online streaming in multiple platforms
4. Cost friendly for customers
5. Vast variety of movies and television shows to choose from for a variety of viewers
6. Core competencies-resources
a. Tangible
i. Financial: revenue is always in a growth state/2009-1.67 billion revenue
ii. Organization: 7 chief managers to run business with 75 employees
iii. Physical: over 13 million subscriptions
b. Intangible
i. Human resources: talented employees
ii. Reputation: fast services
7. Core competencies- value chain
a. Supplier chain management: signed revenue sharing agreement with an unprecedented 50 film distributors
b. Operation: fast and more efficient with technology
c. Distributor: innovative logistic system/ quick delivery
d. Marketing: offline marketing strategy/ direct mail promotion/ no obligation for first month (free trial)
e. Services- no late fee