While the three business level strategies discussed in the text are important, h
ID: 389990 • Letter: W
Question
While the three business level strategies discussed in the text are important, how those strategies be implemented in different types of industries is problematic. Each specific industry is characterized by 1) fragmentation, 2) growth, 3) maturity, or 4) decline- each of which will result in different preferred set of possible alternatives.
Select a company that you are familiar with through employment, community location, or as an investor. For that industry: briefly describe in the terms used in the text what type of industry of the four that you believe that company operates in. Further, based on that selection, outline the advantages and disadvantages of that industry type and recommend an appropriate strategy suited to that different industry environment.
Explanation / Answer
In 1997 when Netflix was introduced to the market it became a sensational success. Very first time some service was providing rental DVDs over the post in which a customer doesn't have to move from the couches to get the DVDs at their home.
There was a very large involvement of the video stores during definition growth of Netflix. Netflix ended that growth of the stores by providing services to the customers at the doorstep. Later Netflix launched its internet-based subscription service in 1999 and provide a huge number of movies to its customers. The specific change in the strategy of Netflix made him the undoubted king of the industry.
Blockbuster was the initiator of the rental service in the America. But blockbuster never replied new technology to its organisational structure. This specific mistake lead blockbuster to bankruptcy. Blockbuster had it stores all over the America which was very famous for distributing DVD and also had the bending machines which were overcome by the Netflix new technologies and web based streaming.
Major environment shift was shifting from the store based rental system to online Internet based rental system which benefited the Netflix for getting better viewership over the blockbuster.Later blockbuster filed for the bankruptcy which made Netflix a leader in the industry.
According to the McGahan model if a company is going through and industrial change environment then it should also change in the same way otherwise it will go bankrupt. It is obvious to change the company is overall strategies as well as technological advancement according to the market. If a company doesn't see the upcoming clues and arise that the fall conclusions for all the time then the overall loss of the company is very big. Same thing happened with Netflix, when industry was shifting towards the Internet Netflix went with the flow and chose to shifting with the Internet which lead it to be a market leader.
Blockbuster didn't applied any kind of strategic improvements by looking at the competition from Netflix. that's why blockbuster has been bankrupt and Netflix is now a brand leader in industry.
Blockbuster food on their traditional selling method which was being used in the organisation from last 10 years and didn't evolve with the changing environment that's why blockbuster faced hard times.
Blockbuster was very passive towards its rental service and always believe that the rental service would never be surpassed by any new coming Technology. Pilot analysis of the market blockbuster looks so much time in applying new strategies to its business and that lead it to difficult times.
As Netflix is operating in highly volatile environment of digital platforms. Short term investment would definitely be focusing on creating opportunities of investment for current reservation. Investing for short term in Netflix would definitely return better result as availability of opportunities at the current state for a Netflix or higher as Netflix is investing in developing countries where large number of people are assigning for their subscriptions which is increasing their profit margin buy a huge scale.
Long term investment in Netflix would require proper approach of understanding multiple situations as availability of different options for Netflix directly depends on availability of future Trends. As per the current situation spending and investing in Netflix for long term would require proper planning and approach. As the service is Deadly related to the internet based subscription service where availability of options for the companies are highly volatile, for the future Trends would not be appropriate as investing for long term can be drastic for investor due to the uncertainty of the specific market environment.
If anybody wants to invest in Netflix then they should properly assess the current situation where availability of opportunities is definitely increasing for short term investments rather than focusing on long term investments for Netflix. Investing better cost and assessment of opportunities then definitely in able an individual to get better outcome of investment in short time rather than wasting funds for a longer time over the Netflix.
Additional analysis for understanding capabilities and Potential threats for Netflix is as follows
Netflix is one of the best companies available in the market which provide entertainment services directly to your home.
SWOT analysis for Netflix
Strength
Netflix is very popular and convenient. This convenience has widely increase the level of service towards the American households as well as effect on the Global households. Its availability on the cross platform ranging from televisions to mobile phone and there Netflix only series have been a very widely influential in terms of capturing the market. It has over 54 million members worldwide which directly opt for the convenience and increase the overall effectiveness of Netflix in their specific region as the Netflix is expanding internationally.
Weaknesses
Companies domestic DVD rental program has been very widely neglected by the audience since last few years. As internet has took over every service that Netflix provide, there rental services as well as their hybrid plans are neglected by public. Result of this specific problem, netflix has divided there subscription services into two parts. Their subscription services are declining faster than the expected.
Also the international business for the company is not also very profitable and directly creating a burden on the international operations for the company.
Opportunities
Netflix has a very intensive opportunity for increasing their International online business. By expanding its business to the developing countries like India China and Bangladesh, netflix can easily increase their overall effectiveness as well as provision of the different services towards the society.
Original contents from Netflix have been proven very interesting for the customer and customer care directly subscribing Netflix for these contents only. This provision of the content directly increases the overall effectiveness of the organisation.
Threats
Increasing competition is the most powerful threat that the company is facing different rental services such as Amazon and other online streaming services are killing its customer base. HBO services are also offering their services without the television subscription and cbs network has also announced subscription service which is upcoming as a threat for Netflix.
P.S. - Please leave a comment if any explanation is needed.
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