The report helps in analysis of the different technological advancements along with pricing strategies that has been adopted by Netflix in order to compete with Blockbuster in the entire competitive market. The different strategies of pricing will be discussed in the next sections along with innovative strategies adopted by Netflix. The innovations of Netflix will be considered in order to remain the dominant provider of online streaming of video.
The main aim and purpose of the report is to discuss the different technological advancements along with innovative strategies used by Netflix. The future of Netflix will be discussed in the next chapters and the rise of the Netflix in comparison to Blockbuster.
The conclusion is based on brief history of Blockbuster and Netflix along with analysis of the different innovative strategies that helped Netflix in beating Blockbuster. The different pricing strategies will be discussed in an effective manner in order to understand the dominance of Netflix in the entire economy.
Blockbuster LLC is known as Blockbuster video was American based supplier of video games rental service, streaming along with video on demand. The Blockbuster became internationally known throughout the year 1990s and in the peak of 2004, the respective company employed more than 84,300 employees worldwide. The first Blockbuster store opened in the year 1985 in the month of October 19, in Dallas, Texas. The respective company Blockbuster often custom tailors the inventory of store that is based on local demographics, it became multibillion-dollar organization, and in the year 1993, it merged themselves with Viacom (Sawhney 2017).
Netflix is American entertainment organization that was founded by Reed Hastings along with Marc Randolph in the year 1997, in the month of August 29 in California. It generally specializes in providing streaming data along with video on demand. There was international expansion of Netflix that commenced in the year 2010 along with the year 2007; it started with streaming of videos as well. In the year 2010, Netflix split DVD mails and streaming service and due to this, the customers were not happy and the price of the shares plummeted as well. There was an expansion of the original programming wherein the price of the shares started rising in a steady manner. Furthermore, it can be seen that Netflix is dominating the entire online streaming market wherein the main competitors are Hulu, Redbox and Amazon (Rayna and Striukova 2016).
Netflix has implemented different kind of strategies in order to change the technique of selling their products (Rogers 2015). The changing technological advancements in the company implemented different innovative strategies that helped them in beating Blockbuster. The digital transformation is intensity of the different digital initiatives in corporation to adopt in the digital age. The Netflix is the best example of the evolution of the company wherein the technology has changed in a drastic manner (Lobato 2017).
Netflix has adopted and evolved in the market when developed a game plan for covering the demand in an effective manner. In the year 2006, Netflix introduced online service and DVD market rapidly shrinked And Netflix continue to grow. However, for a respective organization evolution is not enough in nature and it is essential to respond to the disruption that is digital in nature. While disruption digitally is challenge for related sector, it is an opportunity for different other sectors. When the social media is related, it can be seen that social media gravely disrupted the media sector; however, social media provides essential opportunity for small and medium enterprises (Pittman and Sheehan 2015).
The widespread usage of the internet along with WEB 2.0 has drastically changed the different habits especially through the different networks on TV were affected by such change. Netflix helped in gradually increasing the online library in order to provide the better service for the subscribers who are online in nature (Marchand 2016). In the year 2010, Netflix reached five-year agreement with the Starz entertainments and they entered into agreement with Paramount pictures. The Netflix constructed successful business model with the rental service wherein they have foreseen different changes in the organization (O’brien, Knight and Harris 2017).
The disruptive innovative strategies of Netflix resulted in creating new market along with value network. This has disrupted the entire existing market and this will be displacing the established market leaders along with alliances (Gomez-Uribe and Hunt 2016). The best example if of Netflix wherein previously it appealed to few customers, however later on Netflix launched mail in subscription wherein they appealed the Blockbuster’s audiences by providing them wider view and selection of the content in an effective manner and this affected Blockbuster collapsed in front of Netflix in the entire market (McDonald and Smith-Rowsey 2016).
With the implementation along with rise of online streaming and rental by email, Blockbuster could not able to compete with Netflix. Netflix offered different online DVD rental service wherein there is no requirement of physical location. It was seen that the online streaming model do not require any kind of retail stores. Due to the technological advancements, Blockbuster lost their brand identity and they did not follow such strategic decisions as Netflix. The innovative strategies were not followed by Blockbuster like Netflix, they still followed the concept of retail stores, and they were not being able to compete with them. The rental by email and online streaming were not done in an effective manner by Blockbuster (Siegel 2017).
From the graph, it can be analyzed that Netflix introduced monthly subscriptions service that helps them in providing unlimited access to the content. There are no such late fees and the rental by email and online streaming arms of the Netflix. The monthly pricing strategy of Netflix is wherein $7.99 (one DVD out at a time); $9.99 (one DVD or Blu-ray) and up to $43.99 for eight DVDs. The key differentiator of Netflix is wherein there is unlimited online streaming of the movies along with TV shows available as well. It can be analyzed that for relatively low subscription that is monthly in nature, the customers need to access and library of content of video that even included programming that is online in nature.
There are different kind of innovative strategies that has been adopted by Netflix in such a manner that this has helped them in performing better and gain competitive advantage in comparison to Blockbuster. Netflix will help the users in navigating in an easy manner and an entertainment company in America that specializes on demand streaming video. The entire company made proper effort in replacing the different old styles that was used by them in the future and they tried to implement different strategies that did not include any kind of specific hardware (McKenzie and Smirnov 2017). The different advantages of the improved along with faster connection of the broadband is done as this will help them in ruling the entire market in an effective manner.
The effective pricing strategies that has been used by Netflix is such that it provides the customers unlimited access to the internet and there is no late fees for the customers. The one operates online in such a manner that this helped them in competiting with Blockbuster in an effective manner. Blockbuster uses the different hardware that is specialized in nature that included television sets that is limiting in nature. Netflix does not perform such actions and they do not have such techniques in order to generate specialized hardware, rather than they focus on providing specialized and innovative strategies that helps them in meeting the different hurdles in the competitive industry.
In the year 2011, in the month of July, Netflix announced hike in the prices of DVD along with the streaming service. The previous kind of subscription that was $9.99/mo subscription was now more than $15.99/mo. Netflix was ready in streaming with the different kind of new innovative strategies that helped them in building more adjustments; however, the customers were not ready in order to accept the same kind of strategies. The Qwikster was the DVD by mail that was the only service that included different kind of video games. This was seen that both Netflix and Qwikster had different websites along with credit card chargers. The main reason for not integrating both of them was Reed Hastings the chief executive of Netflix.
Qwikster did not work for different kind of reasons wherein the change of the name was one such reason that the customers did not like such innovation. The split of the two websites was the other reason wherein the credit card chargers were different for Netflix and Qwikster. The hike in price and assumptions of the mail orders were put to backburner as they focused on something else. The Qwikster used to force Netflix users with the combination of the video streaming and subscriptions of the DVDs in order to create separate kind of accounts for the two. The different websites did not combine in any manner and this included separate bills along with different rating for both Netflix and Qwikster.
Qwikster was designed in an effective manner but it failed, as the idea was not completely satisfactory in nature. However, Reed Hastings could have implemented few strategies in Qwikster in such a manner that this will help in making the entire design more effectively and this idea would not have failed. The name of Qwikster was not accepted as the customers felt it was easy to misspell such names. The new users of Netflix did not feel that both Netflix and Qwikster were same and this even confused the users in using such systems in two different manners. The different kind of services of Netflix were user friendly in nature in comparison to Qwikster, however the decision of the split confused the consumers along with the new users in the market as they felt it were two different companies. The Qwikster application did not offer the consumers any kind of DVDs along with video game titles for Wi-Fi and they were optional in nature.
Qwikster was not an easy solution to the different subscribers of Netflix as Qwikster did not lower the prices for the different consumers, but they had to pay for the other services in a separate manner. Netflix should not have been combined with Qwikster, as the ideas that were made and thought by Reed Hastings were not accepted in an effective manner. They felt that it would be a positive idea and response from the different customers in the market; however, it was flopped created a mishap for them in the entire competitive market.
The strategy that has been followed by the Chief Executive Officer of Netflix Reed Hastings was flopped and it was a big mishap for the entire company by introducing Qwikster in the competitive market (Rigby et al. 2016). The Netflix needs to rebuild different other strategies in such a manner that this will help them in understanding the tastes and preferences of the consumers in the market in an effective manner (McDonald and Daniel 2016).
Netflix could have branched in to sub companies that include Netflix DVDs and Netflix streaming. This could have helped the customers in identifying the different issues in the unofficial manner. Netflix should have kept the different same website in an effective manner as this will help the customers in understanding the different requirements of the customers in an effectual manner (Aversa, Haefliger and Reza 2017). The Netflix Company could have used both Qwikster and Netflix in such a manner that this will help them in promoting the different kind of DVDs and online streaming in the effectual manner (Matrix 2014). Netflix would have better in announcing the different prices hike or split in the two companies in such a manner that it would have been able to receive fewer backlashes in the entire competitive market. They could have allowed the customers in the entire competitive market in such a manner that this will allow the different consumers between the three kind of plans that would be simpler solution in nature.
For instance- “Stranger Thing, Black Mirror, Modern Family and this is us” are the different examples that can be used in order to understand that there are different techniques that has been used by these shows wherein they have used their own original content (Jenner 2016). However, Netflix needs to use such different original strategies in such a manner that this will help them in maintaining proper and effective advantage in the entire competitive market. Netflix requires to stream different shows in such a manner that this will help in understanding the different activities in such a manner that they are not copied from other sources (Cox 2014).
From the different examples of different shows, it can be understood that the flop idea of Qwikster was a huge mistake from Netflix as they thought it to be big hit; however, it flopped as it confused the customers in the competitive market. Netflix could implement such strategies in such an effectual manner that this will help the company in gaining competitive advantage in the entire market.
The Netflix requires expanding their market in the future in such an effectual manner that this will help them in lowering the slowing down of the international expansion in the market. The pricing strategies have to be revised in the market, as this will help in attracting more customers in an effectual manner (Cox and Kaimann 2015). Netflix needs to revise the pricing strategies in an effective manner, as this will help them to increase the subscribers in the market.
The availability of the original programming is required to be provided by Netflix in such a way that this help them in future to compete with other services in the same line. The availability of the programming that is original in nature is essential in nature, as this will help Netflix in maintaining their position in the competitive market (Davis 2016). The Netflix in the present is increasing their original programming in such a manner that this will help them to dominate the entire market (Aversa, Furnari and Haefliger 2015). The original programming along with diverse library is the dominant model that will help Netflix in gaining sustainability in the entire market.
Netflix has to work in such a manner that this will help them to be a potential threat to other subscribers in the competitive market. This is essential for Netflix to understand the tastes and preferences in such a manner that this will help in solving the different issues that has been faced by Netflix in introducing Qwikster in the competitive market (Sorescu 2017). The Qwikster was a flop idea as this could not attract and convince the customers in the market in an effective manner. Lastly, it is seen that Netflix needs to understand the preferences of consumers to dominate the market and satisfy the requirements of the customers (Aversa and Haefliger 2017).
Conclusion
Therefore, it can be concluded that the report helped in discussing about the different strategies along with changes in the technology that helped in analyzing the situation of Netflix and Blockbuster. The changing technological advancements help Netflix in DVD along with online streaming and this has been tough competition for Blockbuster.
However, it has been seen that the innovation by Netflix was disruptive in nature as there were rise of rental in mail and online streaming. The pricing strategies of Netflix was efficient and effective in nature as this will help in making the customers attracted towards the services provided by them. The innovative strategies that has been used by Netflix by operating online along with developing system of delivery for the customers with open source approach was effective in nature as well.
It was seen that Netflix was the dominant provider in the entire competitive market wherein it helped themselves in identification of different strategies to keep their position safe in the market. However, it has been seen that Netflix has stumbled and Qwikster was a flop idea for the customers and they did not enjoy such kind of subscription services. However, Netflix needs to rebuild few strategies in such a manner that this will help Netflix in revising the pricing strategies. It has been seen that the international expansion has been slowed down due to expansion of other subscribers in the market. Lastly, it was seen that Netflix has adopted strategies that has helped them in being a threat to the other subscribers in the market.
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