The Netflix Case Study is an important turning point in this course. Being a technology firm Netflix analysis provides an insight into the growth and development of technology. Notably, the world of technology is increasingly becoming competitive and challenging. So far, Netflix stands at a critical position in the market due to the unrealistic price increases that consumers perceive as exploitative and ill motivated. This analysis focuses on drawing and discussing the BODs chart to analyze the ups and downs, the start, and the end. In addition, the paper discusses the Netflix’s technological competitive advantage and pricing, management of the competitors and analysis of technology transition.
The BODs chart for Netflix is as shown in the figure below:
It is worth noting that every business organization has a beginning and an end. Between the two termini in the BOD chart, business experiences vicissitudes described as ups and downs in a waveform. Netflix start paints a picture of the company as a perfectly good horror movie. In fact, the company attracted a large number of investors and large customer base who enjoyed the services of Netflix. In other words, Netflix had a promising start as it focused on the provision of home movie services.
Nevertheless, after undergoing various changes, the end of Netflix presents a grim picture of the company. The company now stands as one of the avant-garde films that are no fun to watch, surreal, and confusing. Abrupt increase in prices brought the subscriber growth to halt. The number of subscribers has been on the decline due to the detested pricing since July.
In between the start and the end, Netflix has surmountable ups and downs. The DVD service will experience a loss of 3m, which is approximately a fifth of its subscribers. The change in prices poses a significant challenge to Netflix’s growth potential. In fact, the subscribers have openly criticized Netflix’s intention to increase the prices giving it a negative reputation that will take long time to rebuild. Netflix needs to focus on product quality and avoid unrealistic price increases in order to avoid the downs.
For a long time, Netflix enjoyed technological competitive advantage and effective pricing strategy. Netflix earned consumers trust by developing and improving personalized aspect for the customers. The company was keen on meeting the unique interests of the consumers aligning their services to the consumers’ taste and preferences. The video-on-demand (VOD) technology gave Netflix a due competitive advantage. Netflix adopted an integrated technology where it combined programming with internet downloading for entertainment while offering a wide range of services.
Nevertheless, it is notable that the beginning of 2007 saw the number of competitors in the VOD increasingly overwhelmingly. Other service providers including Microsoft, Lions gate, and Walt Disney among others entered the VOD and movie beam services that offered consumers alternatives. Netflix was able to manage the competition by adopting at the industrial market level. Netflix focused on being quality leader in the market to remain competitive.
In addition to the technological competitive advantage, it is worthwhile to understand the transition in technology at Netflix. The chart for Netflix technology transition is as shown in the chart below:
Technology
Years (time)
For a long time, Netflix relied on the use of traditional technology including the use of editorial content to connect the subscribers to the Netflix library. However, the company realized the traditional technology was not effective. As such, the company began to venture into VOD in 2001. Later, Netflix began the DVD offering which was later integrated to the internet. The traditional DVD renting led to the provision of DVD-by-mail offering that allowed subscribers to download content at their convenience.
In conclusion, it is notable from the analysis that Netflix has undergone dramatic changes since its start. There have been ups and downs including decline in subscriber base due to the increase in prices that subscribers highly criticized. In addition, Netflix has strived to remain competitive by adopting industrial market level strategy that involves quality and differentiation of products. Despite the criticisms, Netflix has the potential to turn things around and gain competitiveness because Hastings, the founding CEO, believes that negative comments from smart people sharpen their thinking.
