Summary C&D: Zara and Netflix Case Flashcards
What is a point of sale system (POS)?
A transaction processing system that capture customer purchases
How does Zara leverage their POS system?
They use sales data to plan new styles based on feedback rather than on guesswork
What is vertical integration?
When a firm owns several layers in its value chain
What is the definition of logistics?
Coordinating and envying the flow of goods, people and information among locations
What are limitations of Zaras value chain?
- Just in time manufacturing can create delays
2. Zaras model creates more financial vulnerabilities
What is collaborative filtering?
Monitoring the trends of customers and using data to personalize their experience
What was the result of Netflix moving first?
- large selection
- large network of distribution channels - large customer base
- data assets
Why was it difficult for Netflix to go digital at first?
- They needed separate licenses to offer unlimited streaming, which was difficult and costly
- Windowing was also a problem
What is disintermediation?
Removing an organization from a firm’s distribution channel
What were the benefits of disintermediation in the film industry?
- Studios do not need to share their revenue with third parties
- Studios do not lose interface with their customs, and can collect and keep valuable data
What is an A/B test?
A randomized group of experiments used to collect data and compare performance among two options studied (A and B)
What are the current two advantages of Netflix’s size?
- Scale of the firms library (longer tail)
2. Scale of the customer base (ability to pay for longer tail)
What are the challenges with broadband for Netflix?
Netflix uses a huge amount of broadband which has lead to ISPs imposing bandwidth caps
