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Questions: Netflix and Blockbuster - Research Paper Example

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Q1: What are some examples of social responsibility demonstrated by this company? Netflix has contributed to social responsibility in several ways; first, it has encouraged the use of online downloads and purchases as opposed to driving to store. This move has contributed to technological know-how for customers…
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Questions: Netflix and Blockbuster
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Download file to see previous pages Nevertheless, Netflix and Blockbuster operate their businesses with an aim of achieving customer satisfaction by offering quality products, which are worth the money value of the customer. Netflix ensures fair policies by ensuring that its products are affordable; it also has an established monthly subscription to match customer’s affordability. In addition, these two companies provide employment opportunities for many people in the regions where their stores are located. Q2: The SWOT Analysis of Netflix The strengths of Netflix The financial position of Netflix has been improving over the years. Financial reports show the company’s’ shares performing strongly, with a rise of 61% from 2010’s level to stand at $298.73 as on July 13, 2011. In addition, the company’s profitability has been on an upward trend over the years from a net loss of $58.5 million in year 2000 to a profit of $67.0 million in year 2007. However, these figures are dwarfed by the latest profits, which have risen by 88% in the first quarter of 2011 compared to same period in 2010, standing at $60.2 million. Moreover, although total operating expenses have been increasing due to the company’s expansion, the proportion of such expenses to total revenues has been declining from 165% in year 2000 to 27% in year 2007. Moreover, unlike the major competitor, Blockbuster, total assets have been increasing from $52.5 million in year 2000 to $647 million in year 2007, while as per 2010 financials total assets stand at $13.3 billion. Netflix provided an effective way for its customers to select movie DVDs; it ensured a fast delivery of the selected movies and never gave a deadline for return of the movies. It also provided an effective process of returning the mail. Netflix embraced new technology and provided a transformation for its clients from postal deliveries to internet-based deliveries, therefore enabling its customers to watch 12,000 complete movies and television episodes over the internet. The company also provided its members with an eight choice of subscription plans, which ranged from $8.99 to $47.99; here, a member would choose the plan that suited him the most, depending on his affordability. Prices were slightly lower compared to those of the Blockbuster Company, hence capable of attracting customers. Developed software that enabled subscribers to access detailed information about each movie in its library; for instance, the casts, crew, movie rating and the length of the movie; enabling the subscribers to make the right choice when selecting their preferred movies. Netflix’s software also recommended to the customers the highly rated movies; this was seen as a vital tool that played the role of enticing subscribers. Netflix ensured quick deliveries whereby, it was capable of delivering to 95% of its subscribers on a daily basis, shipping over 2billion DVDs a day. It had developed effective software that minimized delivery time, hence enhancing a fast and effective way to satisfy its customers. Netflix’s advertising strategy contributed to its success, for instance, the use of online advertising contributed to attracting customers. Advertising was mainly done on yahoo, national television, and radio station among other channels. Marketing of the company products led to an increase in revenues from $25.7 million in 2002 to $98million in 2004, and by 2006, ...Download file to see next pagesRead More
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