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Netflix CEO Reed Hastings made this important observation about dealing with rivals:(1) In a highly competitive marketplace, firms must be paranoid about the multitude of potential rivals.(2) You can afford to ignore rivals in small markets, but you can never ignore rivals in large markets, such as on-line video companies like YouTube.(3) There are tens and maybe hundreds of start-ups who think that they are going to eat Netflix’s lunch. The challenge for a management team is to figure out which are real threats and which aren’t.(4) Netflix’s position is so strong that I don’t worry about new entrants.
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