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The case describes an innovative approach to online DVD rental pioneered by Netflix in a sector hampered by short life-cycle products (movies). The industry has a supply chain that is prone to misaligned incentives between echelons, resulting in product shortages and poor customer satisfaction. Amango hopes to import this business concept pioneered by Netflix to Germany. To be able to do so, the company must copy Netflix's operating system and manage to solve its working capital problem. At first glance this seems to be an easy thing to do, but an analysis will show that several pieces must fall into place so that Amango can have the same success. The case fits very well in a module about demand-driven supply chains or a module about new concepts in supply chain management. It can also be taught as a stand-alone case on the strategic shifts in the entertainment industry, particularly with regard to the Internet.
Competing in information-based operations. Information-driven businesses.