Questions

1. Faced with the increased costs of delivering DVDs by

mail and streaming online content, clearly Netflix had

to take some action. Describe the decision-making

process you would have advised Netflix management

to follow.

2. What values are reflected in the Netflix decisions

presented in the case?

3. Think back to the chapter discussion about the con-

cept of escalation of commitment. Was Netflix's

continuation with its pricing action (which resulted

in a large loss of customers) reflective of escalation

of commitment, or was it a rational plan? Explain.