Netflix Case Study

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Recommended: Information overload disadvantages

1. Reading review questions.
a. What is information overload? Information overload is too much information which causes a negative effect on the decision making process. It is also described as occurring when the volume of information supply exceeds the processing capacity. What causes it? First, Personal factors relating to the individuals limitations to process information. Second, Information characteristics that are uncertain, ambiguous, complex, and intense. Third, Task and process parameters for example time pressure. Fourth, Organizational design, to illustrate brain storming with a group of individuals with drastically differing opinions and ideas can lead to information overload. Fifth, Information technology allows for information to be generated from numerous sources which can be overwhelming and bombard decision makers thus assisting in information overload. What …show more content…

How could Netflix management use Steps for Better Thinking in decision making?
1. Identifying
a. Problem. Finding competitive programing.
b. Relevant information. Competitors have access to same programs and vendors.
c. Uncertainties. Competition may gain competitive edge and Netflix loses customers.

2. Exploring
a. Biases. Embarrassment of negotiating new contract with vendors for high price for first crack at movies months prior to competition.
b. Assumptions. New customers and higher fees to offset new contract.
c. Qualitative interpretation from various points of view. (i)New contract price too high (ii) alternative options were available to be competitive. Stockholders upset wish to replace management.

3. Prioritizing
a. Ranked list of factors to consider. Very important impact of policy on profitability, market share, and share price. Somewhat important: Ways to remain competitive without signing new contract or losing customers
b. Conclusion. Management made a poor decision. Netflix should renegotiate contract to save money and offer newer subscribers a lower subscription

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