2. Areas of Focus 1. Know Your Operation 2. Determine Your Customer Profile 3. Establish Locational Criteria 4. Gather Market Data 5. Accessibility / Visibility Northern Arizona University http://jan.ucc.nau.edu/~wlr2/ha442/class/concept/location/
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Editor's Notes
We found the criteria for opening a business in a new location according to Northern Arizona University, and applied it to Netflix.
Bullet 1 – Many distribution centers cut down on the amount of time that customers’ DVD’s spent in transit. Netflix has over 40 distribution centers across the United States, which allows for 90% of subscribers to get their DVD’s the day after Netflix ships them (same time for return trips). Bullet 2 – Here is how the receiving process works. Employees open the envelopes and scan a UPC barcode on the sleeve containing the DVD. The Netflix inventory system automatically updates the subscriber’s queue and sends an e-mail that confirms the DVD has arrived. An employee then inspects the DVD to make sure it isn’t broken or too damaged to play and returns it to the shipping center’s inventory. The shipping process requires that work of machines and people too. The system compares the subscriber’s queues (list of desired DVD’s) with inventory information for each shipping center to tell the employees which DVD’s to ship. Employees then put the DVD’s into the red mailing envelope and seal it. A machine applies the sticker that keeps the envelope closed during shipping. Machines also sort all of the outgoing DVD’s into bins by which ZIP code they are going to (kind of like what happens at a UPS, FedEx, or USPS facility). Bullet 3 – Netflix delivers about 1.5 million DVD’s through the U.S. Postal Service everyday, with its billionth DVD being delivered in 2007. Netflix has a successful operation that is critical to it being near or at the top of the DVD rental market because its use of machines and people is balanced, efficient, and the system is not too costly. The company’s efficiency allows it to charge much lower prices (than Blockbuster for example) for much longer rental periods than other companies (Redbox for example).
-There are several different criteria that separate movies based on their genre. This makes it easy for streaming Netflix users to find the movie they want, or another like it. It also provides an instant queue so customers can list the movies they plan to see or send in for. -Netflix provides a blu-ray option for a little bit more that allows viewers to get high quality movies, as opposed to the diminished quality provided by streaming services -A recent business partnership interest has developed between the two companies, whose main functions compliment each other well. Facebook can attract the millions of Netflix subscribers to their page, and Netflix can utilize the movies and “like” sections of the Facebook profile to conduct studies on popular tastes -Many customers were angered at the recent raise in price, however, with the market dominance Netflix has, they have little to fear unless a new organization takes over. Companies like Blockbuster have little to show for competition.
Compared to the rest of North America and Central America, the United States has the luxury of DVDs shipped to their door step. Netflix DVD library has a broader range of movie titles and television shows compared to just having an instant queue library like Canada. Netflix ships it's DVDs anywhere the USPS does, which is everywhere (in the United States.) If Netflix were to expand it's DVD and instant streaming capabilities to the rest of the world, it would have a monopoly because they pioneered the distribution of instant streaming media. Netflix has a huge advantage over companies new to the distribution of streaming media because they have had time to perfect their system of distributing streaming media.
Many of the "disaster" options appeared to be purchased by investors who anticipate sharp declines. • increase in implied volatility is often linked to options buying in anticipation of some catalyst—an event, like an earnings release. Implied volatility then tends to recede with the passing of the event as traders sell options. • The market was reflecting the possibility that shares of Netflix could move $70 in either direction by options expiration in one month • Shares fell $13.72, or 9.5%, to close Tuesday at $130.03, compounding Monday's losses to notch a 16% decline this week. Netflix's stock has lost more than half its value since July. • "There's a lot of speculation in this stock, people trying to catch momentum. In Netflix, it's almost been a straight line down, so people are buying puts and taking a chance here, [but] it's hard not to believe there's going to be a rebound at some point, no matter how bad this story, and that does attract call buying," said William Lefkowitz, options strategists for vFinance Investments.
Streaming can be accessed from computers, and all current major videogame consoles (PS3/Xbox 360/Wii). Streaming on the Nintendo 3DS was implemented on July 14, 2011. Netflix streaming will be possible on Nintendo’s new console, the Wii U. Streaming is also possible on the iPhone and Droid smart phones. Point Netflix members are able to rent movies and keep them for as long as they like. Movies are delivered to customers through the mail, meaning that customers do not need to drive to brick and mortar stores or Redbox kiosks to rent movies. The subscription model also saves customers from having to deal with late fees from the few brick and mortar stores that remain, or the additional $1 per day charge from Redbox.
