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Aem1200 - Course Assignment Netflix

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15 views3 pages

Aem1200 - Course Assignment Netflix

Uploaded by

sophiadesta600
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© © All Rights Reserved
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COURSE ASSIGNMENT

Netflix and Disruptive Innovation


Consumer Behavior and Netflix's Business Model
How do you watch movies? Do you go to the local movie theater where you live? Do you watch films
on your laptop? Or do you view films and your favorite TV shows on your smartphone or tablet when
you’re on the go? Perhaps all of the above, depending on where you are at a certain time.

Much of Netflix's historical success related to building on strengths, such as video content, and
maximizing technological opportunities to deliver the right product in the right way at the right time
to the right customers.

The Netflix business model initially capitalized on consumer entertainment preferences and behavior
by placing a big bet on the “laziness factor”; that is, people will find it more convenient and preferable
to not leave their home to get a movie if the price is reasonable. At the time, the Netflix DVD rental
business was an alternative to the more traditional “brick and mortar” retail giant, Blockbuster Video.
Over time, it evolved to an online video streaming service provider to attract more customers and
better satisfy current customers based on their desire for comfort and their willingness to pay for
the service.

Evolving Business Model: The Three As


As we look to the future, what’s likely in store for Netflix?

Predicting the future is hard, and this is also true for Netflix. In one sense, however, the more things
change, the more they will likely stay the same at Netflix; that is, leadership will probably continue to
build the company and propel growth around the three As that help characterize disruptive
innovations: affordability, accessibility, and availability.

● Affordability: The Netflix subscription-based business model will likely continue to focus
on offering exceptional “value for money” to current and future customers. To achieve its
two primary marketing goals — acquisition and retention — in the future, Netflix has
developed extensive data-driven behavioral customer profiles. These profiles reflect a
deep understanding of who their customer is and what they need, want, and will actually
pay for.

© 2024 Cornell University


To acquire new customers and to retain and grow their loyal current customers, leveraging
a value proposition that centers on affordability is likely critical to success.
● Accessibility: Part of delivering on a strong “value for money” proposition is accessibility.
At present, Netflix accesses consumers from around the world, primarily from developed
nations. Again, with this access has come a deep understanding of consumer behavior
globally; in fact, with the ubiquitous internet and improved online streaming speed
internationally, Netflix is well positioned to not only retain current customers in developed
nations but to also target audiences (with growing disposable income and high-speed
internet access) in less-developed countries.
● Availability: Netflix’s worldview is expanding beyond traditional geographic borders. For
instance, Netflix offers content within both global and local contexts as well as in different
languages. At the same time, Netflix continues to improve their distribution by partnering
with local cable companies and movie and TV show internet aggregators and influencers.
In short, Netflix's expanded worldview, growing content, and strategic partnerships are
driving and supporting their future growth aspirations.

Yet world domination for Netflix is unlikely, as there are now many committed and well-resourced
competitors. Nonetheless, Netflix’s ability to develop and deliver (at scale) more content to more
people around the world is remarkable. For users that are on the go and globally dispersed, Netflix
will likely continue to creatively evolve their business model around the three As to meet changing
consumer needs and wants: anytime, anyplace, anywhere.

Taken together, these three As serve as a starting point and as building blocks for innovation and a
sustainable competitive advantage. So what started as a low-end niche competitor to Blockbuster is
now a mainstream leader in the competitive, high stakes entertainment industry.

The movie wars look like they are heating up. Stay tuned!

© 2024 Cornell University


Instructions
After reading this case, respond to the questions below. Your responses should be a total of 500 to
600 words.

Questions
1. Of the three As, given that managers have limited time, energy, and resources (i.e., money),
how would you value and prioritize: affordability, accessibility and availability? What would you
value and prioritize most? Least? Why? Explain briefly.

Answer here…

2. This case study looked primarily at opportunities for Netflix to pursue at scale globally. What
threats might prevent Netflix from achieving their goals? What should leaders and managers
keep in mind; e.g., competition from other companies like Amazon, Apple, and Disney;
consumer privacy, such as hacking into company databases; or consumer behavior like illegal
access and price points/sensitivity in less-developed countries?

Answer here…

3. Are you optimistic or pessimistic about Netflix's future? Why? Explain briefly.

Answer here…

To submit this assignment, please refer to the instructions in the course.

© 2024 Cornell University

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