Assignment 1 - Netflix vs Blockbuster

Assignment 1 - Netflix vs Blockbuster - Assignment 1...

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Assignment 1 Competing with Information Technology Two companies that are competing using information technology are Netflix and Blockbuster in the movie rental industry. Netflix originally started as a pay-per-rental model much like Blockbuster did where customers would pay for each rental. The difference here is that Netflix only exists in cyberspace and at the time, Blockbuster only existed in a physical location. After two years of the pay-per-rent model Netflix switched to a monthly subscription based service where customers could rent one to eight DVDs at a time and rent as many DVDs as they want for one flat monthly fee. Netflix was the first to introduce no late fees as well and free, fast shipping. Since Netflix only exists on the internet their information technology systems play a huge role in their success. As of December 2006, Netflix had 6.3 million subscribers and over 70,000 titles with more than 42 million DVDs. These DVDs are shipped through the 42 shipping centers located throughout the United States and usually arrive at their destination within one business day. This much movement requires a very efficient distribution system in order to consistently perform as promised. The advanced information technology system they have set up works great in controlling these distributions. This ties into the inbound logistics part of the value chain model. The information technology system they have for their inbound logistics of DVDs allows them to automatically update inventory and provide that data to its customers online. For
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This note was uploaded on 05/08/2008 for the course CIS 310 taught by Professor Onlineclass during the Spring '07 term at Cal Poly Pomona.

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Assignment 1 - Netflix vs Blockbuster - Assignment 1...

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