MGT350 Mod 5 Critical Thinking PDF

Preview

Summary

MGT350 Mod 5 Critical Thinking...

Description

Running head: NETFLIX THREE CIRCLES PAPER

Netflix Three Circles Paper MGT350 – Business Policy and Strategy Colorado State University – Global Campus

1

NETFLIX THREE CIRCLES PAPER

2

Netflix Three Circles Paper Netflix is one of the largest online streaming service available. It is priced well, has many titles, and even is making its own original series. Netflix also listens to what the research about their customers says and brokers deals with their providers to accommodate. For example, households with children who have an income over $50,000 a year have a positive opinion toward Netflix, so they brokered a deal with Disney that gives access to content targeted at young children (Pearce, Robinson, 2013, P. 27-3). Netflix started out as a DVD mail out service, I was an early subscriber myself. I was able to rent movies I wanted to see without having to go to the video store, Netflix sent them directly to my home. I returned them in the prepaid envelope when I was ready for the next set. Now Netflix has grown into a household name for streaming movies, series, and even their own original programing. Circle One: What Customers Need and Want from Netflix When one considers subscribing to any service, price will be a major concern. Price, quality, platforms, and the ability to rate content are some of the findings of what is important to customers from a Netflix Case Study (Pearce, Robinson 2013, P. 27-10). With the last recession, money became tight for many families across America. This means that unnecessary expenditures are no longer an option because there is less disposable income to go around. It is easy to understand why price, quality, and how many devices a customer can utilize to stream the video is important, regardless of how much disposable income a family or individual has. It also makes sense that those who use Netflix regularly would appreciate the opportunity to rate the content. One of the ways Netflix does this is by giving the option to rate the content after a customer has finished watching it. This is good because you know that the rating you see when browsing the titles are from people who have watched the film and wished to leave their opinions. Most people appreciate that their feedback is valued.

NETFLIX THREE CIRCLES PAPER

3

Circle Two: How Customers See Netflix Netflix is one of the biggest names in online streaming. They revolutionized the field and many times had to create their own software to accommodate their customer’s needs (Pearce, Robinson, 2013, P. 27-10). Netflix truly is a household name. Speaking from my personal experience, I do not know one person who does not hold a Netflix subscription. Their original programing is also highly popular and yielding additional revenue for the company. I myself just purchased many toys from the Netflix Original Series “Dino Trux”. My son loves this program and we recently upgraded our Netflix subscription to accommodate his devices so we did not have to watch children’s programing 24/7. Also “Orange is the New Black” is frequently making entertainment news because of its popularity. Per Nielsen, ONTB had 6.7 million viewings in the first 72 hours (Barr, 2016). These numbers show me that Netflix subscribers are appreciating the original programming. With there being so many providers for online streaming, it is beneficial for Netflix to make themselves stand out. They also provide the ship to home video service where they began their company. In 2011 Netflix’s CEO and co-founder Reed Hastings used the Netflix blog to announce that they intended to split their DVD delivery service from their online streaming service and call it Qwikster. They also intended to raise the prices for their services, this outrages customers and they lost 800,000 subscribers in the US (Pearce, Robinson 2013, P. 272). Hastings did not spit the services of Netflix in the wake of the negative attitude of the customers, towards the split. How Customers Perceive Netflix’s Competitors As far as competitors, Netflix has three that can be considered major, those are Redbox, Hulu, and Amazon Prime. Hulu uses ads to keep their prices low, but they also have original

NETFLIX THREE CIRCLES PAPER

4

programming as well. Hulu has gained in popularity with 12 million subscribers, however it is said that their growth has slowed. They are also offering a commercial free subscription for $12 a month, and they are looking to offer a cable like bundle of channels that will be priced at $40 a month (Stelter, 2016). Their popularity may continue to grow, but they have less than half of the subscribers Netflix has, so it is a safe bet that Netflix is more popular. Amazon Prime has a video service available to its members. This is a little difficult to call on account of Amazon Prime’s members having access to free two day shipping on orders as well as unlimited reading of many popular titles within Kindle. The Prime membership is not exclusive to online streaming so the amount of subscribers is not necessarily indicative of the popularity of their online streaming. Redbox has self-serving kiosks all over the United States. Their first venture into online streaming did not succeed, but it has been said they are working toward streaming once again and will call it Redbox Instant (McCormick, 2016, P. 3). If they cannot bring it about a second time they will most likely have a fate similar to Blockbuster, being that “Redbox’s revenue for the fourth quarter of 2015 dropped 17%, to $407 million, as movie rentals plunged 24% year over year.” (Spangler, 2016, P5). People are not really renting hard copies of movies like they used to, they prefer the convenience an online streaming service can offer. Conclusion All three of these points are important to deciding how a company can move forward. In order to have a valuable strategic plan, a company should know where they and their competitors stand. Customer’s views of a product or service are vital pieces of information. In order to properly asses a company’s customers one must look at all facets of the customers. What

NETFLIX THREE CIRCLES PAPER customers what, what they think of the products and services, and what they think of the competitor’s products and services are all important things to know when looking into what a company has that others do not. If there are 100 online streaming companies, customers would look to the one that gives them the most for their money. In order to assess what exactly is ‘more’ a company needs to know the answers to these questions.

5

NETFLIX THREE CIRCLES PAPER

6 References

Barr, M. (2016) We Finally Know How Many People Watched Orange Is the New Black. Retrieved From: http://www.tvguide.com/news/nielsen-reveals-orange-is-the-new-blackratings/ McCormick, R. (2016) Redbox is testing its second attempt at a streaming service. Retrieved From: http://www.theverge.com/2016/7/22/12254552/redbox-digital-streaming-servicetests Spangler, T. (2016) The Slow Death of Redbox: Why the Kiosk Colossus Is the Next Blockbuster. Retrieved From: http://variety.com/2016/digital/features/redbox-businessmodel-doomed-1201706612/ Stelter, B. (2016) Hulu closes in on 12 million subscribers; plans cable-like TV option. Retrieved From: http://money.cnn.com/2016/05/04/media/hulu-subscribers-cable-bundle/ Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic and global competition (14th ed.). Boston, MA: McGraw-Hill/Irwin...