Netflix was launched about twelve years ago. Netflix was originally nothing more than an online version of a traditional video rental store. Customers could visit the Netflix website and choose which items they wished to rent. Each rental cost $4, along with a $2 shipping fee, plus late fees, if applicable. This model was not very price competitive or efficient compared to brick-and-mortar video rental retailers. To gain a competitive advantage, the company slowly transformed itself. Two years later, Netflix evolved into its current form. It has focused on technological advances and improved product offering to be competitive. Today, Netflix has over 8.6 million subscribers.

1. What type of retailer is Netflix?
2. To compete more efficiently with Blockbuster, should Netflix open brick-and-mortar retail stores? Why or why not?
3. Are there other forms of nonstore retailing that Netflix should consider using along with its current distribution activities?