Accounting Netflix Case Study: David Becomes Goliath 

Questions: 1) According to strategy guru Michael Porter, firms can choose two kinds of strategy to achieve competitive advantage: lower-cost production and differentiation. These strategies are not mutually exclusive, and Netflix competes with both of them. Identify two (2) ways in which Netflix achieves cost advantage and two (2) ways in which it used differentiation. 

Questions 2) What key competitive resource does the Cinematch software “create”? What kinds of benefits does this provide to Netflix? 

Questions 3) Could a new competitor match Netflix’s recommendation software? If it did, would this create a threat to Netflix? Why or why not? 

Questions 4) What made it possible for Netflix to scale better than its much bigger rival, Blockbuster? How did this lead to being able to provide “long tail” products? 

Questions 5) Netflix’s main service is now streaming movies. a) Would you say that Netflix has achieved a sustained competitive advantage? Considering that several such services are now offered by firms like Disney, Apple, and Hulu, do you think it can last? b) Would a “clicks and bricks” strategy make sense for Netflix? Why or why not