Value Discipline Definition The definition of value discipline is a competitive plan/strategy which describes who a firm is and what they do. It is the essential piece of decision making for every strategic plan in the company. The decision making capabilities outlined by the value discipline shapes the culture of the company. There are three main types of value disciplines: operational excellence, product leadership, customer intimacy. The Value Discipline of the Firm Netflix’s value discipline is customer intimacy. Netflix offers a unique and differentiated set of services to their customers/subscribers. This allows them to personalize and customize the services and products they offer in order to meet the vast needs of their customer base at a relatively low cost. As “one of America’s most innovative technology leaders”, Netflix provides a strategic solution that is tailored to each individual customer. A competitive advantage is gained by using a professional strategy of consumer intimacy. However, this platform does not only provide them with a competitive advantage, it shapes the organizational environment, culture, and value design of the firm. Netflix has a user-centric based policy. Individual preference data is stored in their database which enables for product/ service customization. They can expand their services and products complexity without having to further increase the level of familiarity and understanding that is necessary for the handler to utilize the products and services. This differentiator makes Netflix unique compared to competitors in their industry. The context-driven variability used allows Netflix to provide a more user-centric solution. The role of technology at Netflix Current State Technolo... ... middle of paper ... ...g system that supports the scalability of their data. The following is their input on their new proposal to create a new operational insight tool in order to provide a solution to their challenge: As the firm moves forward, top managers must pay attention to staying unique to sustain a competitive advantage. Netflix does not own their content, nor do they have any tangible assets. Netflix is a part of a broad range of network users. As technology continues to grow exponentially, Netflix will have to be readily adaptive to change and innovation. Technology never stops growing and evolving, therefore, Netflix’s business platform should never stop growing and evolving. At the same time, they must be careful to remain user friendly and customer centric by keeping the technology at a level where users will not have to obtain a certain set of technological skill sets.
Mujtaba, B., & Johnson, W. (2012). Case 5: Publix Super Markets--Achieving Customer Intimacy. Weinstein, A. Superior customer value: strategies for winning and retaining customers (3rd ed., pp. 269-286). Boca Raton, FL: CRC Press.
§ There are a large number of substitute products. Netflix is in the business of providing personal entertainment at an affordable cost. Since any other form of entertainment is considered a substitute, Netflix?s industry is in direct competition with all other forms of entertainment, whether it be reading, physical exercise, regular television, etc. If trends in popular culture move away from those related to movies, revenues may be affected.
In conclusion, the vast technology change opens many opportunities for Netflix to grow. By assessing the market environment and challenges, it enables Netflix to overcome the obstacles to remain as the market leader. To achieve the future growth, Netflix should implement both strategic and tactical approaches to compete with others. The strategic and tactical business plans for Netflix are improving content libraries, developing more partnership with production firms, and staying with the low-pricing strategy.
Companies like Amazon and Netflix are very effective in predicting what customers normally buy and watch. Knowing what your customers are or are not buying will allow you to position products that they are statistically likely to purchase based on recent transactions and activity. This is a powerful tool for Netflix because it keeps users engaged and actively using the service but also allows them to tailor their investments in content towards items that are more likely to keep users active on their site.
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in strategic focus has allowed Netflix to grow into the largest online entertainment subscriptions service in the United States with over 6.3 million subscribers (Netflix).
The following essay will analyze Netflix Company’s social commerce strategy. It includes the definition of social commerce, company history, social commerce strategy that the company is engaging, the effect of social commerce for the company and measuring social commerce success of the company. Below, brief definition of social commerce and the company history.
Netflix is one of the America’s largest movie rental service and in addition provides the subscribers with internet based video streaming service. (Netflix Competitive Advantage, 2010). It was started in 1997 headquartered in Los Gatos, California. (Netflix, 2014). Netflix has more than 40 million subscribers who have access to more than 100,000 titles as on mid-2013 (Netflix, 2014). They have more than 42 shipping locations and ships over 1.575 million DVD’s to subscribers on daily basis (Netflix Competitive Advantage, 2010). In USA the highest ISP speed is 2.97Mbps which is provided by cable vision-optimum. Netflix together with YouTube accounts holds for over 50% of downstream traffic on fixed networks. Its design and traffic management play key roles on its network infrastructure (The ISP Speed Index, 2014). The main strategy of Netflix is to attract more subscribes to the online video streaming service. Amazon, Blockbuster, Walmart, Redbox were some of the competitors of Netflix in movie rental.
From its inception, Netflix has become a business based on superior customer service and has subscribed its business to the market marketing management philosophy. The main purpose behind Hasting’s idea of a better way to rent and enjoy movies was how to provide that service to their clients and not have any late fees. In other words, their customers could enjoy their rentals from Netflix for as long as they wanted, and they would never have to worry about late fees again, so long big movie rental chains! This aspect alone of Netflix’s marketing plan indicates that Netflix has based their marketing plan on market orientation, “a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product,” (Lamb, 2009, p.7). Many companies that take on this philosophy are said to implementing the market concept. The marketing concept states: “The idea that social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting orga...
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
Wiersema, M. T. a. F., 1993. Customer Intimacy and Other Value Disciplines. Harvard Business Review, p. 92.
...a remarkable opportunity to grow in the industry and lead as an innovative provider, Netflix has much opportunity to satisfy its customers and maintain their attention with their revolutionary business growth (Martala, 2009). Their success goes beyond their product. As stated, it is a combination of their culture of high performance drivers and fosters the “freedom and responsibility” mindset (Elliott, 2010). Because of their innovation and gradual entry into the market, Netflix has the competitive advantage to add layers of products for growth for years to come. Currently, Netflix has the competitive advantage to increase price and retain their current customer base. Even more beneficial, is the opportunity to attract additional subscribers with their new features. To end this, combining their products, price, culture, and strategic plan makes Netflix innovative.
Briefly describe each of the four major challenges that Netflix faces. Which challenge will be the easiest to address? Why?
Many scholars believe that customer satisfaction has a crucial role in the success of a business, and is pivotal in increasing the overall profitability of the business (Kotier, 1991). Customer value is gained through the experience they receive from the goods or purchases they have obtained from a certain business. Customer value has various definitions and concepts, Holbrook (1999) stated that it is a kind of “interactive, mutual, and preferred experience”; but simply said, “the term customer value has many meanings.”
The company that will be analyzed in this critique is Netflix. Netflix is a provider of on-demand internet streaming media available to viewers in all America and parts of Europe. Netflix allows a wide range of ages to watch a variety of different movies and TV shows. Before making a long term commitment to Netflix, people have the chance to use a Free Trial. The Free Trial for Netflix is available for 1 month. People are able to watch unlimited movies and TV episodes over the Internet on a Netflix-enabled device. After the month is up, people will then decide if they want to continue to use Netflix as a member, or decide to cancel the membership. Netflix is a month to month subscription which is $7.99 (Netflix, 2014). Netflix was introduced
I understand the term customer value to define how customers weigh the benefits of individual purchasing decision against the costs of these products.