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Netflix- The Movie Rental Industry

- Assess how technology and the changing demands of customers have impacted the movie rental business.
- Suggest a strategy for Netflix to prevent a new entrant into the marketplace and demonstrate its effectiveness.
- Evaluate any new products in this marketplace and the potential impact to Netflix's market share
- Evaluate Netflix's current strategy and determine if the strategy is sustainable.
- Identify a Netflix strength and suggest how this strength may be leveraged in the marketplace to ensure a competitive advantage.
- Predict the future of the movie rental industry. Provide support for your prediction.

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Step 1
The movie rental business has been affected by the changing demands of the customers. The customers want to pay for the movies they rent but do not want to be constrained by physical DVDs. They do not want to physically pick up the DVDs and return them after the rental period is over. This requirement of customers can easily be satisfied by technology. There can be direct downloads of movies over the internet. The customer can pay the rent electronically and download the movie. Technology can enable hassle free access to movies. The customer does not have to return the movies to the seller.

Step 2
The strategy that Netflix can adopt to prevent a new entrant into the marketplace is to have a large collection of movies and programs that a new entrant cannot match. Further, Netflix has cost advantages because of which it can implement its strategy of flat-fee, unlimited rentals without due dates/late fees, ...

Solution Summary

The Movie Rental Industry is discussed step-by-step in this solution. The response also has the sources used.