The paper “ Ideas on How to Keep Netflix Competitive in the Future" is a wonderful example of a case study on marketing. Netflix’ s strategy suffices to get the company moving forward into the future of the movie rental industry. The strategy helped it thrive for long and realize remarkable successes evident in their massive profits over the years. The one-stop online option of doing DVD-by-mail and streaming on the same website is something that should be retained because it allowed Netflix’ s customers' convenience to rent movies. Netflix’ s software technology that is embedded in their databases that helps organize movies in terms of the ones that a customer has not watched or borrowed and also in terms of a customer’ s like’ s is a great asset and should be retained (Hitt et al 147).
However, in light of fast-changing technologies that are increasingly becoming an important driving force of change in the movie rental industry, Netflix’ s strategy needs some change. For instance, Netflix should consider adopting modalities that will allow its subscribers access to their services through such technologies as smartphones. This can increase subscription because many people are progressively using their phones for financial transactions and to access the internet.
This will also require Netflix to invest more in its streaming option of renting out movies. This would help Netflix make more profits especially in lieu of the eminent total shift from DVD-by-mail to live streaming (Hitt et al 148). Collaborating with fast and efficient internet providers, Netflix’ s subscribers will continue to enjoy their cherished movie services. One of the things that Netflix needs to do differently to continue competing successfully and earn profits in the new movie industry is to intensify subscriber involvement in decision-making.
The shakeup that Netflix experienced when it attempted to split its two options of moving to rent was a wakeup call to how much Netflix was taking its subscribers for granted. The impact of the disgruntlement of Netflix’ s subscribers shows how important the input of the movie rental industry’ s customers has become in the success of a firm in the industry. Subscriber participation would help Netflix address its subscribers’ felt needs and avoid adopting misinformed initiatives.
The company also needs to intensify its expansion into many other areas so as to expand its operational area. Many firms that grow into multinational status dare to launch to discover new markets for their services and products (Hitt et al 149). Netflix needs to implement sound risk management policies. The way Netflix responded to its subscriber fallout demonstrated poor ways of arresting and managing emergent issues and the lack of circumspection. Sound risk management policies would help the company counter adverse changes both the ones that emerge from the actions and decisions of the company and those that emanate from consumer trends and behaviors.
This would require Netflix to have a backup plan for its major decisions to have something to fall back on in the event that its decisions and initiatives do not work. The backup plan should be of relatively high capability that will help absorb the shock of the initial plan’ s backfiring (Hitt et al 150). If Netflix’ s management agrees with the above ideas, the action steps to help implement the recommendations the plans would start with creating a forum or portal through which Netflix can invite its customer’ s feedback on intended plans.
Individual subscribers can be provided with template forms where they can indicate their responses on the areas of service that needs change and those that they feel should be maintained. Expansion of operations into new places should start with strategic planning. For example, when Netflix expanded into Latin America it did not foresee the difficulty that would accrue from the low use of internet among the populations. This is something that strategic planning would have helped the company to foresee such a setback and devise ways of countering those (Hitt et al 150). Survey and customer education would have served as ways of mitigating the impacts of such drawbacks.
Success in Netflix’ s expansion activities would need improvement in its supply chains. Risk management would need a survey of all possible risks and prospection of future scenarios. This needs to be followed by devising ways of countering every one of the considered risks. Monitoring customer behavior patterns is a good way to catch prospects of subscriber fallout (Hitt et al 150).
Anticipated crises are managed better than unexpected ones and they do not devastate a company. “ Dear Netflix Management, I have evaluated your company and situation, and I would like to meet with you to give you a summary of my ideas on how you can keep your company competitive in the future: Here is a summary of my recommendations: Invite customer feedback on current and intended plans Devise an interactive forum to engage subscribers Establish outlets in new cities and states Launch campaigns to educate people on new services and modes of service Establish clear ways of communicating plans and ideas Devise ways to remedy a deteriorating situation Netflix should consider adding more features to their services Rebranding is an option Prioritize research Encourage innovation and creativity Demographic segmentation Psychological segmentation; lifestyle, learning, perception Behavioral segmentation Maintain up-to-date records of gross profit margin Alternative ways of competition other than the price rise Developing new product lines These are possible ways that can help Netflix regain and maintain its high standing in the movie rental industry.
These ideas would need prioritization and customization to suit Netflix’ s strategy. They would also work well when combined with Netflix’ s best practices that have been tried and proved to work.
I envision a possibility of maximizing Netflix’ s gross profit margin while providing quality service to its subscribers. In this highly dynamic industry, flexibility and adaptability are assets that help strengthen a company’ s competitive advantage. Thank you and I look forward to discussing these ideas in more detail in person. ”