Netflix has taken over Wal-Mart's online DVD rental business. When Wal-Mart first entered this space, some analysts thought Netflix was dead. How could a small company possibly fight against the behemoth from Bentonville? Remember, whenever you are looking at competitive battles, you have to look beyond the resources of the combatants. You have to look at whether they have the processes to succeed, and whether their values will prioritize doing what needs to be done to succeed over all the other options on their plate. Sure, Wal-Mart has the money and talent to replicate Netflix's business model, but it would require taking that talent and money away from the core business, and creating very different processes than Wal-Mart knows well. Now we'll see what happens as Blockbuster continues to teeter.
Thursday, May 19th, 2005