Netflixs Service Operation (A Successful Business Model) How Has Netflix Improved Its Service Operation? Describe The Results And Impact Of This Improvement. Netflix is known as one of the biggest online film hiring service companies. It is recognized for providing superior customer service with its improved business model. Traditionally, the company had confronted dissatisfaction from customers and eventually enhanced their customer service by focusing on management of information technology. Technology has helped Netflix to offer high resolution streaming movies to the customers and they can enjoy it by subscribing to the company’s website.
At the outset, when Netflix had started this offer, the company provided customers to enjoy free service for six months. Netflix wanted to lead the market of movie entertainment and thus they changed their business model and entered in Video on Demand (VOD) sector. To gain cost advantage in the entertainment market, Netflix had differentiated its product by offering improved customer service. When the customers’ demands of movies increased, Netflix started two business plans, one being DVD hiring business and other one, streaming film service. These strategies were critical decision for Netflix as new innovation in technology arrived in the video market.
It was expected that the DVD hiring business will get concentrated in future and streaming film service will rule the entertainment market. Thus, correct business strategy was needed for Netflix to improve customer service and increase subscriber base (Chiu & Et. Al., 2007). Since the initial phase, Netflix is aware of the importance of good customer service. Netflix allows people to hold any DVD until they desire to watch the next movie in their wish list. It provides customers with the freedom to return DVDs according to their suitability.
Netflix’s entrance in the VOD market was characterized by monthly change feature where customers can enjoy streaming movie which is available in high definition format. One of the main limitations of Netflix’s service was long waiting time for instant satisfaction. The rivals of Netflix has taken the advantage of this limitation and started offering prompt satisfaction to the customers where they can hire a DVD without any cost unless that particular DVD which had formerly requested by any other customer is still in transit.
Netflix had attached the DVD hiring business with streaming film business. With the accumulation of these services, Netflix has presented customers with more features without raising cost. Customers are provided with the prospect to watch a film as well as order a DVD in case they feel to watch later. It provides the freedom to watch more films at cheap cost than other services (Chiu & Et. Al., 2007). Netflix’s customer service provides enjoyable television episodes and streaming films through internet, browsing facility for latest movies, directing queue service and selecting movie options.
The business strategy of Netflix has changed the traditional method of hiring films as it tenders the advantage of bringing the films directly to home. As the trends and demands of customers are changing, Netflix offers customers to gain control over watching movies. As a result of greater service provided, in the year 2010, Netflix was ranked in the first position with respect to the customer service by American Customer Satisfaction Index (ACSI). With the improvement in customer service, Netflix has successfully been able to capture a leading position in the entertainment market (Netflix, 2011).
References Chiu, R. & Et. Al., (2007). NETFLIX Entering the Video on Demand Industry through Providing Streaming Movies. Stanford University. Retrieved Online on August 25, 2011 from http: //www. stanford. edu/~aditya86/Netflix. pdf Netflix, (2011). Netflix Has Revolutionized The Way People Watch Movies. About Netflix. Retrieved Online on August 25, 2011 from https: //netflix. hs. llnwd. net/e1/us/pdf/Consumer_Press_Kit. pdf