Premium Essay

Dvd for Less Case Study

In:

Submitted By sk91
Words 653
Pages 3
DVD For Less
DVD for less is an online business that makes all of its money from customers that shop for DVD players online. Their competitive advantage is that they can sell DVD players for around $200 less than its competitors because it benefits hugely from low costs from its suppliers.
DVD for less has now outsourced its warehousing and storage activities to an external firm, this firm is called Baselio Logistics who is charging them $500,000 annually for the warehousing of their inventory. This strategic move is going to have a positive impact on the business overall because their costs will decrease drastically. These costs that will decrease include the warehousing costs, average inventory costs and the carrying costs. Previously DVD for less was paying $1.46 million for warehousing and had an average inventory of $5 million of which the carrying cost was $1.25 million. Also under these circumstances their order fill rate was 97% and of the other 3% of the customers, 1% would cancel their orders and 2% would be unhappy but wait for the second delivery all these customers would also be compensated for the company’s mistake with a $35 coupon towards any of their products. Every late order would also have a handling fee of $20 per order so this would be a waste of $55 per customer for every customer that received the incorrect order. This is another extra cost that the company would need to pay.
After the company’s warehousing and storage was handled by Baselio Logistics their total costs went down by approximately $2.635 million and their order fill rate jumped up to 99%. The costs that they are now saving on are warehousing (they only pay $500,000 compared to the $1.46million), average inventory (which decreased by 30% so it only costs $3.5 million compared to $5 million before) and the carrying cost (which would automatically reduce because of the reduced

Similar Documents

Premium Essay

Ellements of a Marketing Plan Report

...chosen to be discussed in this paper is Netflix. First, this paper will explain the specific key environmental forces created for opportunity for the company. Second, it will discuss five environmental forces and trends to influence the company’s marketing efforts and future product offering. Then, this paper will explain what differentiation strategy the company should undertake to encourage their target market over other competitors. Lastly, it will analyze lessons learned from the Geek Squad case study. Environmental Forces Netflix is a DVD rental and online streaming service. The key environmental force created for the company when they first started out is the DVD mail service. Before there was Netflix, customers had to go to rental stores such as Blockbuster to rent movies. One issue that customers would have is the stores running out of the movies they wanted or possibly not even carrying those movies to begin with. Shipping the movie gives customers more time and takes less energy than having to drive to the store to pick out what movies they want to watch. The founder of Netflix, Reed Hastings, foresaw the potential in the rental industry when he started the company. When Netflix first start they were only offered movies through the mail, but by 2007 they added online streaming to their services. Adding the streaming service created a huge opportunity for Netflix to succeed in the movie rental business. Purchasing Patterns...

Words: 1070 - Pages: 5

Premium Essay

Supply Chain in the Entertainment Industry

...1. The in-house and production capabilities enabled Zara to offer fresh designs at stores twice a week throughout the year. Zara produced about 11,000 styles each year, 5 times as many as a comparable retailer. a. Analyze in detail the problems faced in the supply chain due to their excessively frequent new\? product introductions. b. What strategies were adopted to achieve such a high rate of new product introductions? 2. The entertainment industry of Hollywood has undergone four major transformations in the last 40 years, from “Films shown in theatres” to “Video Rental of VHS Cassettes” to “Sell Through DVDs” to “Digital Delivery of Content”. Analyze how the factors of Product Pricing, Channel of Distribution, Inventory Management and Customer Service have changed in the supply chain though the four generations driven by technology. The film industry is the only industry that we can say has gone through so many changes as far as supply chain. Everything has changed! Channels of distribution, customer service, inventory, revenue sharing options, production, marketing and pricing. We will call these stages or eras of changes generation 1,2,3,4. In the next paragraphs I will accommodate the different stages of the industry approximately in each generation: * In generation 1 movies were only shown in theatres, a price to watch the movie...

Words: 1718 - Pages: 7

Premium Essay

Case Study Blu Ray vs. Hddvd

...Question 1: In the case study Blu-ray versus HD-DVD: A standards battle in high-definition video (Schilling, 2013,pp 65-66), what factors do you think influenced whether (1) consumers, (2) retailers, and (3) movie producers supported Blu-ray versus HD-DVD? Discuss and justify your answer using the theory behind the selection of dominant designs. Intro; In the early 2000’s Toshiba and Sony, two tech giants went head to head to provide homes with the next generation of high definition video. Toshiba’s new technology was called HD-DVD and was compatible with the old technology, DVD. Sony released Blu-Ray which required a new playing system altogether. After both companies had secured major contracts in the entertainment industry there was one moment that helped Sony to become the dominant product. Time Warner, formerly in alliance with Toshiba, switched to Sony prompting other undecided companies, including Walmart and Netflix, to follow suite. After this the tech war was effectively over and Toshiba ceased production of HD-DVD’s and components. Although at the same time an alternative product for watching movies was growing; online streaming. This provided a similar experience, depending on how fast the internet was in the area, but at a cheaper cost of being digital media. Consumers; in the fight for supremacy the early adopters of the technology are very influential because they will be more likely to have researched about which product was better based on technical factors...

Words: 1869 - Pages: 8

Premium Essay

Dynamics of Viral Marketing

...how the recommendation network grows over time and how effective it is from the viewpoint of the sender and receiver of the recommendations. While on average recommendations are not very effective at inducing purchases and do not spread very far, we present a model that successfully identifies communities, product and pricing categories for which viral marketing seems to be very effective. 1 Introduction With consumers showing increasing resistance to traditional forms of advertising such as TV or newspaper ads, marketers have turned to alternate strategies, including viral marketing. Viral marketing exploits existing social networks by encouraging customers to share product information with their friends. Previously, a few in depth studies have shown that social networks affect the adoption of individual innovations and products (for a review see [Rog95] or [SS98]). But until recently it has been difficult to measure how influential person-to-person recommendations actually are over a wide range of products. Moreover, Subramani and Rajagopalan [SR03] noted that “there needs to be a greater...

Words: 19974 - Pages: 80

Premium Essay

Blockbuster Video

...Blockbuster video Case study By Ange li n a I., An to n G., N ah ia n U. понедельник, 5 декабря 11 г. Introduction ability to analyze the company’s performance over the years is a duty of every manager. Today we are going to try to analyze and look deeper into the case of Blockbuster and it's evolution over the years .In order to do this, we are going to answer several questions, which will help you to understand the problems, that Blockbuster faced and solutions The it's implemented. понедельник, 5 декабря 11 г. понедельник, 5 декабря 11 г. Business problems and decisions Changing rental patterns. households acquired As more cable TV, customers no longer wanted to rent older videos. With the new approach, customers only cared about the new releases. But, at $65 a tape, those costs were high—and after about a month, people moved on to rent the next release, so the store no longer received money to cover the original purchase price. In 1997, CEO John Antioco found a solution. He negotiated a deal with the leading Hollywood studios. Blockbuster would purchase tapes for $6 upfront, then give the studios 40 percent of the rental revenue. Competitors could not match the cost savings. About 2,500 of them (10 percent of the U.S. market) went out of business. понедельник, 5 декабря 11 г. Business problems and decisions But, entertainment technology rolled on. By 2001, the world was quickly switching to DVDs late 2001, Blockbuster again had...

Words: 1984 - Pages: 8

Free Essay

Netflix's Case Analysis

...Group 3 13 May, 2010       Netflix  -­  Group  Case     1. Describe  the  competitive  environment  of  the  video  rental  industry.     During  the  time  that  this  case  was  written  the  Video  /  DVD  rental   industry  had  matured  from  a  Mom  and  Pop  Shop  in  the  local  town  or   down  the  street  to  the  business  model  that  Blockbuster  had  implemented.   Location,  Location,  Location  was  the  model.  Open  more  stores  and   increase  your  market  penetration.       Blockbuster  had  approximately  7,800  brick  and  mortar  stores,  each   carrying  approximately  1000  titles.1  These  DVDs  were  owned  by  the   store  and  the  volume  generated  mainly  came  from  recent  release  rentals   and  new  movie  sales.             The  market,  outside  of  the  Blockbuster  market  was  fragmented,  with   several  copycats  of  Blockbuster,  and  continued  existence  of  smaller,   possibly  regional  rental  shops.  No  viable  Internet  distribution  model   existed  when  Netflicks  was  launched.  The...

Words: 1469 - Pages: 6

Premium Essay

Elite Auxiliary

...Elite Auxiliaries Abstract Elite Auxiliaries is a choreography agency that also produces, markets, and sells its own custom equipment and videos. The company is a fairly new company based out of Jacksonville, Florida and its clientele spans the entire Southeast region of the Unites States. Looking at environmental factors that must be taken into consideration by company managers, factors relevant to the decision making process will be examined. Recommendations will be made to managers to decide if production should continue or discontinue as well as how to improve profitability to become more attractive to stockholders. The company’s environmental scan will help managers determine if the company can sustain and what changes are necessary to do so. Elite Auxiliaries Company Details Elite Auxiliaries (EA) is a marching band auxiliary choreography agency that specializes in providing choreography services to marching bands and auxiliary units in the Southeastern part of the United States. It provides this service primarily through licensed choreographers who are employed by the agency as independent contractors. A subgroup of Elite Auxiliaries is Flags by EA. This is the production branch of Elite Auxiliaries, which provides flag equipment, such as poles, custom and stock silks, as well as choreography and skills videos. The company employs 100 workers, broken up into two groups: choreographers, who make up about 20 workers; and production and office staff, who make up...

Words: 2294 - Pages: 10

Premium Essay

Netlfix

... |Return a viewed movie to get a new|iPod Touch, Sony PS3, etc. | |Create your own list of movie |Can order 4 DVDs at a time in |Keep each movie as long as you want |one from the list | | |online |unlimited plan | | | | | | | | | | | | | | | | | | | | | | | | |(3. Outbound logistics) |(4. Marketing & Sales) |(5. Service) | |(1. Inbound logistics) |(2. Operations) | | | | VALUE CHAIN (How does the business model of NETFLIX add value?) |DVD/Blu...

Words: 861 - Pages: 4

Premium Essay

Case 26 - Star River Electronics Ltd.

...March, 2015 Case 26 – Star River Electronics Ltd. Introduction Star River Electronics is a joint venture between England’s Starlight Electronics Ltd. and an Asian venture-capital firm, New Era Partners. Star River Electronics is based in Singapore, and its mission was to manufacture CD-ROMs as a supplier to major software companies. Star River Electronics has gained fame in the industry for producing high quality discs. As the optical and multimedia products became more and more popular in the mid-1990s, CD-ROM manufacturing industry experienced rapid growth during this time. Due to this effect, small manufacturers overreacted, creating oversupply that pushed prices down by as much as 40%. Consolidation followed as less efficient producers went out of business. Because of its superior reputation, Star River was able to survive the shakeout. While other CD-ROM manufacturers floundered, Star River’s volume of sales grew at a robust rate in the past two years. Unit prices, however, had declined because of increasing competition in the market and the growing popularity of substitute products, especially digital video discs (DVDs). DVDs had 14 times larger storage capacity and is a threat to displace CD-ROMs. Although, CD-ROMs still comprised 93 percent of all optical-disc-drive shipments in 1999, a study predicted that this number would fall to 41% by 2005, while DVD drives would fill the remaining 59%. Star River Electronics had begun to experiment with DVD manufacturing...

Words: 1419 - Pages: 6

Free Essay

Paper

...internet crimes are rising. The internet criminal is safer, less likely to get caught has a higher return on investment and is maybe even a little bit younger. Due to the increased use of computers in business its easier for employees to steel from the companies they work for misappropriating trade secrets and the like for significant financial gain. The ease with which the crimes are committed and the availability of computer based tools to commit crimes and the attitude that “they will never come after me” makes people that aren’t predisposed to the traditional types of crime generally pretty willing criminals. An easy example of that would be the ease with which movies can be pirated. Its actually surprising the number of and type of people willingly pirate movies. Admittedly I was introduced to the practice by being shown where to obtain the software by an information security officer of a federal government agency. Many of the crimes aren’t financially motivated and malicious in intent attempting to destroy data because of a personal vendetta. I think the increase in cyber crime is directly attributable to the drop in traditional crime. I might not agree with the statement in the book “since the Internet leaves almost permanent traces motivated offenders might refrain from crime once realizing they can somehow be identified” The statement might be more believable were there not proof that I think proves otherwise case in point financial fraud ring recenetly nabbed it stands...

Words: 827 - Pages: 4

Free Essay

Project Management

...Management Case Studies These case studies represent a range of projects in different libraries. They are all based on real events. The participating librarians were asked to provide details of projects within the headings used in the case study template which is located at the end of this document. Each case study is presented using these headings to enable the reader to make comparisons between the projects but there is some slight variation of style and detail. Although some editing has been done by the writer of these learning objects, the intention is to retain as much of the individuality of each project as possible. Brief conclusion and analysis is provided at the end of each case study by the writer of these learning objects. Several of the projects are ongoing at the time of writing. This partly reflects the nature of projects in ILS whereby they run parallel to mainstream service delivery. This offers real challenges for those involved and especially for the project leader who will continually need to prioritise the tasks, commitment and speed of working towards completion. None of these projects have been submitted by or directly involve senior managers. Although most have some approval and reporting to senior staff, these projects are managed by professionals in the middle management strata of their organizations and involve different grades of staff or volunteers. Senior staff are less accessible than middle managers and would probably claim to have less time...

Words: 12974 - Pages: 52

Premium Essay

Term Paper on Computing Fundamental

...INTRODUCTION A. Origin of the report: This report on “Features, Advantages, Disadvantages and Price of Desktop Computer, Laptop Computer, Palmtop Computer, PDA and Mobile Phone” is submitted to Tahmina Khanam, course teacher of the course MGT 308 “Computing Fundamental” on July 02, 2009. The information of the report has been conducted under the direction of Lecturer Tahmina Khanam. B. Purposes: To find out the different features of different types of computer and latest technology and their advantages, disadvantages and prices. C. Scope of the study The frontier of the report is that it only discusses about desktop computer, laptop computer, palmtop computer, PDA and mobile phone. We have known a lot of things through the internet. D. The Limitations of the study The report has some limitations. The websites did not provide clear information about a lot of topics. Everything in there is very complicated. E. Methodology There are two types of method by which we have collected all the data and information. The first method is that we went to computer sales centre to know about the computers features and prices. The second is that we searched the internet for further information. The data and other analysis those have been done in this report are on the basis of the course “MGT-308 – Computing Fundamental”. F. Report Preview We discuss one by one the types of the computer. And we also include features, advantages, disadvantages and price with...

Words: 8668 - Pages: 35

Premium Essay

A Horror Show at the Cinemaplex

...themselves. The low cost high quality home theaters systems are giving family’s the movie feel without the cost, or dealing with cell phone conversations, rude staff, and commercials’. C. Bargaining Power of Suppliers The bigger megaplexes do have some bargaining power as far as concession items but they still sell their concession for the same price as the average for all theaters. D. Bargaining Power of Buyers The theater is at the mercy of the studio and the consumer. There is money to made mainly in locations where going to the movie is the high light in your small town. The theaters have little buying or selling power in the current strategic set up. E. Threat of substitute product or services The rate moves are going to DVD and cable on Demand is an easy cheap way for people to see a movie without a big cut into the family budget. Many have big TV’s in their home so the home theater is a huge threat to the local movie house....

Words: 1150 - Pages: 5

Premium Essay

Netflix Case Study

...continuously rethink and develop its marketing strategies if it wishes to stay on top of the competition. This paper looks at several areas surrounding Netflix current market strategy and how it will likely fair against its competition moving forward. Along with looking at the current market strategy of the company focus will also be paid to Netflix’s past failures and success and the potential for continued success in the future. Keywords: Competition, Competitive Advantage, Marketing Strategy   Netflix Case Study In 1998, Netflix CEO Reed Hasting, along with software executive Marc Randolph officially opened Netflix for business. Hasting and Randolph realized the potential opportunity and perceived growth that the DVD market would have on the US entertainment sector. Further they were able to capitalize on DVD’s smaller size, in comparison to VHS, and developed an approach to deliver the new entertainment media to consumers via rent-by-mail service. While the DVD was becoming rooted in the US market, Netflix was able to build strategic relationships with the hardware manufactures as well as studios. These relationships allowed Netflix to hone in on the consumer market and get the company’s name associated with the growing media. Hasting and Randolph achieved economies of scale in...

Words: 1962 - Pages: 8

Premium Essay

Defeating Child Obesity

...Child obesity is a condition where excess body fat negatively affects a child's health or wellbeing. The cause of childhood obesity are spread out, and certain factors to this epidemic include lack of physical activity and dietary patterns. Changing eating and physical activity in children with the use of nutritional guides, work out DVDs and proactive parents can assist in decreasing child obesity (Ryder, 2011). Child Obesity is determined through BMI, body mass index. Children over age 2, or teens whose BMI is less than the 5th percentile are considered underweight. A child that ranges in the 5th percentile and less than the 85th percentile are at a healthy weight. In the 85th percentile to less than the 95th percentile are considered overweight. Equal to, or greater than the 95th percentile are considered obese. Today, about one in three American kids and teens is overweight or obese, nearly triple the rate in 1963. One major contributor to a child’s diet that affects their weight is beverages that include soda and juice boxes. The consumption of soda by children has increased throughout the last 20 years by 300 percent. Scientific studies have documented a 60 percent increase risk of obesity for every regular soda consumed per day. With the growing use of computers, and watching TV this is a big contributing factor as well that contributes to child obesity. We find that these activities take away the physical activity that children need to stay healthy. Sedentary...

Words: 2290 - Pages: 10