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Netflix
The value chain at Netflix is as follows. The inbound logistics reflects the content for which Netflix is able to secure distribution rights. The more content, the better the value to the consumer. The operations are mostly behind the scenes, but this is what allows Netflix to manage the physical DVDs in its collection. More importantly these days, operations are what allow for high-quality streaming, without which that line of business would have gone nowhere. With respect to streaming, operations and outbound logistics are closely linked, the process happening nearly instantly. With the DVDs, the use of USPS and the policy of not having deadlines work together to provide a positive customer experience. Marketing and sales provides value for Netflix as well, because the company is able to reach its customers, and promote new content to them. A key element of marketing is the queue, something that has attracted Netflix users since the company started. Service is how Netflix resolves problems and interacts with customers. The relaxed attitude the company has with its DVDs is part of the service, but so...
Horizontal conflict is when "multiple manufacturers sell through the same or different retailers" (Settle, 2012). Netflix's pricing policy generally does not facilitate horizontal conflict, because the content is not priced individually. Vertical conflict occurs when there is a conflict between levels in the distribution channel. This is the case with Netflix. Though the case does not elaborate, Netflix is having significant problems with content providers, for example Disney and Sony, and the result is that Netflix customers are losing access to films from some major content providers (Edwards & Grover, 2011). This conflict threatens to diminish the company's value to its customers, especially since customers have long had access to works from those providers. However, Netflix competes against new initiatives run by those studios, so there is little likelihood of this vertical conflict being resolved.
3. The distribution function adds significant value for Netflix customers. The DVD service saved…
Works Cited:
Edwards, C. & Grover, R. (2011). Netflix bets new content deals will be mea culpa to angry users. Bloomberg. Retrieved April 9, 2012 from http://www.bloomberg.com/news/2011-10-15/netflix-bets-new-content-deals-will-be-mea-culpa-to-angry-users.html
QuickMBA.com. (2010). The value chain. QuickMBA.com. Retrieved April 9, 2012 from http://www.quickmba.com/strategy/value-chain/
Suttle, R. (2012). Examples of horizontal conflict. Houston Chronicle. Retrieved April 9, 2012 from http://smallbusiness.chron.com/examples-horizontal-conflict-32871.html
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