Current Condition, Objectives and Strategies of Quickflix - Case Study Example

STRATEGIC MANAGEMENT Name: Course instructor: Course: Institution: Date: STRATEGIC MANAGEMENT Current condition of Quickflix Quickflix limited is an Australian company that deals with the production of online movies (Baillieu S. 2011). Quickflix is a public company that is registered in the Australian Stock Exchange market. Formerly, the company was a start-up business venture but it has moved to being registered media home and Leisure Company with a full business service that operates in a highly changing and expanding market. It is one of the prominent leaders in the marketing of online DVDs in Australia. Though the use of DVD rental in Australia is still developing, its market is taking off in the world markets especially in America where the famous company Netflix has a significant number of subscribers in the present time. Several factors in Australia are creating a favourable climate for the growth of the Quickflix Limited. These factors include increased consumer interest in home theatres, higher demand in DVDs, increased home broadband connections and decrease in cinema attendance among people. Quickflix limited is currently famous for its internet advertising and in the provision of entertainment services such as DVD rental. Quickflix Limited has many DVD titles that make its consumers get any DVD they want from this company. This company helps its consumers to choose movies online and then have the movies delivered to them by the company (Baillieu S. 2011). This allows consumers to watch movies any time they feel like and return them at their own time because there are no late charges for movies that are not returned at the right time. Moreover, consumers are also able to choose from their convenience while Quickflix Limited ensures free postage for all the movies rented from the company. In addition, there is a free trial for all movies in order to ensure that the client chooses the movie of their choice. There are different plans that are provided for the choice of movies in order to ensure that people choice the movie of their convenience. The DVD rental provided by Quickflix Limited allows clients to choose the TV shows and films that they want to watch and wait for the company to send them and this enables the clients to watch them during their leisure time. Quickflix limited has continued to provide quality services by responding to customers efficiently and through significant expansion of content library. In addition, this company has also used the strategy of investing in expertise and operating policy as well as launching a new version of its service that helps in the operation of the DVD library (Baillieu S. 2011). Quickflix limited has also tried to partner with Fairfax to help in future operation. The Quickflix Limited has used marketing and promotions especially by making use of its distribution partners such as Fairfax and Optus as its base in order to advance its business. In addition, the company has also expanded its distribution networks to include other distribution centres such as Perth and Sydney. The company has launched a variety of next generation features and this makes selection of the favourite titles to watch an easier task for the clients. The Consumer Association of Choice has ranked Quickflix as the most preferred online DVD rental provider in Australia (Hanson P & Hoskisson R. 2011, pp 59). Quickflix faces major competition from Telstra’s Big Pond movies but due to its expanded distribution network, the company is now ready to firmly challenge its competitor in the market. Quickflix Limited tries to become the best online DVD provider in Australia. This company is headed by a board whose role is to oversee and control the management of the company with an aim of defending and enhancing the curiosity of its clients by taking into account their likes and dislikes. The company also aims to achieve its success by ensuring that the interests of its shareholders are protected and guarded firmly. This is an independent online movie subscription service where clients can hire movies online. The movies that are traded by Quickflix limited have different directors and actors. This company allows its customers to make personalized recommendations. This saves the clients the hassle of rushing to get movies from companies because there are no fees paid for delayed movies or fees charged for extension of return deadlines. Quickflix limited enables its subscribers to enjoy a large number of latest release movies and DVDs with sovereign and unfamiliar title. Quickflix limited aims at creating a foremost online movie community in Australia which will be able to meet many consumers. The movie community will share a movie reviews and rankings that will influence the demand for the movies and DVDs. the company aims at imitating the success of the US leader of online movies, Netflix (Quickflix limited. 2011). This will help Quickflix limited to succeed in its business by attracting more clients to purchase its services. In order to achieve its set targets, Quickflix works through a board of directors which control and manage the business. The board is supposed to develop, monitor and review the long term business strategies in Quickflix as well as providing strategic management of the company. In addition, it also ensures that the necessary policies and measures are followed to protect the company’s assets to enable the company to function well. Quickflix limited also reviews the procedures of the board of directors to ensure that they perform their duties effectively. Quickflix limited conducts a yearly evaluation of its performance in order to ensure effective performance. The board of directors at Quickflix are supposed to adhere to the code of conduct that promotes ethical and accountable decision making by the concerned people. This means that all employees at Quickflix are required to conduct their duties with honesty in order to meet the company’s goals. In addition, the company aims at ensuring that there is no discrimination among shareholders which encourages fair treatment of each of the company’s stakeholders. Moreover, the company requires its workers to maintain a safe working environment in order to ensure effective performance. Quickflix expects its employees and other stakeholders to comply with the law, discrimination, health safety and clash of interest in order to promote proper operation of the company (Baillieu S. 2011). Good information management is ensured at Quickflix limited to ensure that confidential information is protected from unauthorized people. In addition, it also aims at identifying price sensitive materials that can help the company to earn more income. The company has to ensure that the company’s Act is not contravened by the individual workers. There is a shareholder communications act at Quickflix limited which promotes effective communication in the company. This is because; it encourages the presentation of concise and clear information that will improve the operation of the company. Quickflix limited has a board of directors that ensures that the company’s shareholders are informed about the major developments in the company. Quickflix limited holds a good share of the online DVD rental market. The company has plans to grow its subscriber numbers in the coming twelve months. Its priority is to achieve sustainable profitability. The company has made the necessary investments that will help it to grow its share of the Australian market. Many subscribers have made Quickflix their movie destination. This is because the company’s satisfaction levels have grown higher than they were before. Quickflix aims at removing all non-essential expenditure in order to promote low cost subscriber. This plan will mean that all operational expenditure will be catered for through revenue while core operational functions will be kept to preserve service levels (Hanson P & Hoskisson R. 2011, pp 67). An Analysis of the internal and external environment There are various factors that may affect the operation of Quickflix Limited. This will involve both the internal and external factors that will influence the running of the company. A SWOT analysis of Quickflix limited gives a picture of the internal and external factors that influence the operation of Quickflix Limited. SWOT analysis is a method of analysing a company by studying its strengths, weaknesses, opportunities and threats. Strengths and opportunities touch on the internal factors of the company while opportunities and threats concentrate on the external factors of that company. SWOT analysis is essential in a company because it enables a person to compare the strengths and weaknesses of both internal and external factors that may affect the operation of a business and it helps the company to know what adjustments are required in order to improve the company’s productivity (Barney & Hesterly pp 55). SWOT analysis is an important part of a company’s strategic management planning process. Another importance of SWOT analysis is that it will allow the company to match its resources and capabilities to the forces in the external environment where it operates. Quickflix makes use of Swot analysis in its implementation of its operation strategy. Strengths Quickflix limited has various strengths that give it a competitive advantage among its competitors. The various strengths of Quickflix limited have enabled it to implement operating strategies that competitors are unable to emulate due to their cost or technology that is employed. The main strengths of Quickflix Limited lie in its reserves and capabilities that help the company to develop a competitive advantage in the market. Patent is a major strength of Quickflix Limited. This is because; the company is a registered venture that works in partnership with other companies. Quickflix limited has a good reputation among its customers because of its excellent services that are offered to its customers. The services that have earned Quickflix a good reputation among its customers include its home delivery of online DVD and its best prices for the services offered to its clients. Moreover, Quickflix Limited has adequate access to distribution networks that enable it to reach more customers each and every day (Quickflix limited. 2011). The other strength of Quickflix limited is its use of modern technology such as the internet which allows it to access its customers at all time. The company has a strong brand name that has made it acquire a considerable share of the world’s online DVD market because its clients love the movies that the company offers. Due to its free delivery and free return of Movies, Quickflix limited has got more customers as compared to its competitors in the world market. Quickflix Limited also has a cost advantage from its proprietary know-how which enables the company to efficiently use new technologies that help it minimize cost. The other strength of Quickflix limited is that it is easily accessible by its clients due to its online provision of services. Moreover, Quickflix offers the latest entertainment movies that make it to maintain its clients who want to get the latest entertainment at all times. Finally, the company is strategically positioned hence becoming the best platform for the distribution of new forms of entertainment. Weaknesses There is no company that does not have weaknesses. All companies that have strengths also have weaknesses in one area or the other. Though Quickflix limited has various strengths, it also has some weakness. The absence of a particular strength in a company results to a weakness in that particular company. One weakness of Quickflix limited is that the company may lack a copyright protection that will lead to the piracy of its movies hence reducing its market power. In addition, poor reputation among a few customers can also affect the popularity of Quickflix limited hence exposing it to competition (Barney & Hesterly pp 65). The company may also lack access to the profitable natural resources that would have otherwise helped it to improve its profitability. Quickflix limited also has a high cost of operation due to its free delivery and free return of movies which increases its operating costs hence reducing its profit. The other weakness of Quickflix limited may be the lack of sincerity from its leaders who may misappropriate the company’s resources hence leading to a low productivity of the company. Moreover, lack of access to the main distribution networks may be another weakness of Quickflix limited which may make the company to be less profitable as its competitors. A company’s weakness is the opposite of its strength. In this connection, Quickflix Limited must closely monitor its strengths to ensure that they do not become a weakness of the company. Opportunities Opportunities are part of the external environmental factors that may affect the operation of a particular company. Opportunities refer to the possible ways through which the company can improve its operation. Quickflix limited has various opportunities that can help the company to expand its operation and improve its profitability. One opportunity in Quickflix limited is its unfulfilled customer need which makes the company to have a chance of winning more customers for its products. The available customers are not satisfied by the available products and therefore Quickflix limited is required to come up with more products to fulfill the needs of the diverse clients (Quickflix limited. 2011). The other opportunity at Quickflix limited is the advancement in technologies. New technologies will enable the company to come up with better products and services that will enable it to increase its customer satisfaction. In addition, international trade barriers have been removed and this will enable Quickflix limited to partner with many companies hence improving its operations. Business regulations have also been lessened and this makes it easier for the company to operate hence increasing the company’s opportunities. Lack or little competition from similar companies is another opportunity at Quickflix limited which makes this company to gain a good share of the world online DVD market. The opportunities available for Quickflix limited are essential because they can help the company to improve its productivity. Threats Threats are changes in the external environment that are likely to affect the running of the business in a negative way. Quickflix limited faces threats such as the change in customer tastes that may make the company to lose some of its clients hence having low profits. The other threat facing Quickflix limited is the coming out of substitute products that may out compete the existing products of the company thus leading to the loss of customers for the company’s products (Barney & Hesterly pp 56). For example, people may get other means of entertainment hence stop getting online movies and DVDs from Quickflix limited thus contributing to its loss of clients. New regulation in the international market can also be a threat to Quickflix limited because it may make it hard for the company to operate as before. Chances of increased trade barriers can also be a threat to the operation of Quickflix limited. This is because, trade barriers make it hard for a company to run efficiently thus losing its competitive advantage. Threats will therefore make it hard for Quickflix limited to compete effectively in the market hence losing its market power. The company is therefore required to find means and ways that will enable it to fight the existing threats in order to ensure that it operates as efficiently as possible in order to ensure that it increases its profits. Internal and external environmental factors must be well analyzed in order to ensure that they contribute to the success of the company. Quickflix limited must conduct a proper analysis of its internal and external factors that interfere with the company’s operations. Quickflix is not only required to pursue the most seemingly profitable opportunities. This is because; the company is required to develop a competitive advantage through identifying a link between the company’s strengths and the present and upcoming opportunities. Understanding the company’s strengths and available opportunities can help Quickflix company to overcome its weaknesses and prepare the company to pursue more beneficial opportunities (Quickflix limited. 2011). Quickflix must pursue beneficial opportunities that compare to the company’s strengths. In addition, the company must also overcome all its weaknesses in order to ensure that it maintains its share of the global market. Porter five forces analysis in Quickflix limited Quickflix limited is also required to conduct an analysis of the five forces in order to determine its operation. The company has to consider its competition with other similar companies in order to assess its returns. Various companies have different levels of profitability that can only be explained by the company’s structure. Quickflix limited can be said to be influenced by the five forces. This model can be used by a strategic business manager in order to achieve a competitive advantage in the market. The five forces contribute to the competitive power of Quickflix limited and the strategic manager must put them in to consideration in order to achieve success. Threat of entry of new competitors Quickflix Limited has to be careful of new competitors who may enter the market and make the company lose it competitive advantage. The loss of competitive advantage of a company will make the company to lose its profitability. The company requires to block the entry of new competitors in order to prevent the decrease of its profits towards zero. Competitive rivalry will result to ongoing set of competitive actions that occur between competitors as they content to attain advantageous market position. In order to fight the threat of new competitors, it is good for Quickflix limited to ensure there is market commonality between the company and its competitors in order to ensure that there is no loss of competitive advantage (Barney & Hesterly pp 85). This means that it is not good for the company to allow other companies of its type to get into the market but it should make it easier for such companies to move outside the market. The other way in which Quickflix limited can fight the entry of new competitors in the market is by ensuring an absolute cost in the market. This will help to reduce the number of new competitors in the market hence improve the company’s competitive advantage. The danger of substitute products Quickflix limited should conduct an analysis of a threat to the company that can be as a result of the entry of similar products or services into the market. The company must be aware of the danger posed by substitute products that may be introduced into the market by other companies. This is because, the entry of substitute products into the market will lead to the lose of the company’s clients hence reducing profitability (Saloner G et al. 2000, pp 89. The company must thus analyze the possibility of the clients turning into the substitute products in order to ensure that it does not lose its customers. In addition, it must also analyze the price of substitute products in order to ensure that such prices do not make the clients to buy the substitute products. The threat of entry of substitute products can be as a result of the differentiation of the products and services offered at Quickflix limited to ensure that these products do not have similar qualities with their products which may lead to the loss of customers. This will require quickflix limited to be careful of any other products that may substitute their online DVDs in order to retain its customers. Bargaining power of the clients The bargaining power of the clients is also a component of the porter five forces. This will require the company to analyze the market output which entails the capability of customers to pressurize the firm thus affecting their sensitivity to change in prices. Quickflix limited will also analyze the how the company depend on the existing channels of distribution. In addition, it should also analyze how buyers access information about their products as well as their volume ratio (Saloner G et al. 2000, pp 89). Moreover, Quickflix limited will have to know whether buyers can access substitute products in order to ensure that the company does not lose its customers. Bargaining power of suppliers Quickflix limited will have to know the bargaining power of its suppliers which entails studying the market inputs. This will include analyzing the companies providing raw materials, labor and other services because this will act as a source of power to the firm. It is good for the company to study the bargaining power of the suppliers in order to ensure that these suppliers do not affect the running of the business. Strength of competitive rivalry Quicklfix limited is supposed to study the intensity of its competive rivalry. This will involve studying the company’s competitive power in the market in order to ensure the company does not lose its competitiveness. This will require Quickflix limited to have a sustainable competitive power in order to maintain its profits (Quickflix limited. 2011). In addition, it requires to study its competition between both online and offline DVD providers so as to maintain its high income. In order to maintain its competitive advantage, a company must increase its level of product advertising in order to ensure that it reaches more customers. Competitive rivalry will be based on things such as quality, dimension and innovation and this will have to be in line with those of other companies. Thus, the company deserves a powerful competitive advantage in order to ensure that it does not lose its competitive advantage. Objectives and strategies used at Quickflix limited Quickflix limited is a company that has an objective of providing the best online DVD services in Australia. The company intends to be a leader in the provision of online DVD services to a large group of clients. Another objective of Quickflix limited is to achieve sustainability by providing online DVDs and movies to clients within the Australian market. The current strategy used at Quickflix limited involves making the necessary investments that helps the company to grow in the Australian market (Quickflix limited. 2011). The company ensures that it offers free delivery and return of movies to its clients in order to ensure that it attracts and retains its clients. In addition, the company does not charge any fee for the late return of movies and DVDs in order to allow its clients to have plenty of time to enjoy their movies before they return them. Moreover, Quickflix has a wide variety of the most current movies and DVDs which enable the company to attract and retain a large number of customers. The strategies used at Quickflix limited enable the company to be prominent in the market. Quickflix limited has made efforts to identify the challenges that may pose a threat to its profitability. Such challenges involve the threat brought about by its competitors. However, the company still maintains its high quality services in order to retain its competitive advantage. The other challenge faced by Quickflix limited is the entry of substitute products and services into the market which may lead to lose of clients. In order to deal with this challenge, Quickflix limited provides its customers with high quality products and services that help it to retain its clients. The strategies used at Quickflix limited are well thought over because they have helped the company to become a leader in the provision of online DVD in Australia. In addition, the strategies have also made it possible for Quickflix limited to face rivalry from its competitors and still maintain its position in the Australian online DVD provision market. The strategies have also helped the company to deal with the threat of entry of substitute products into the market which makes it possible to retain and attract more customers (Saloner G et al. 2000, pp 89). In conclusion, Quickflix limited has employed proper business strategies that have helped it to succeed in the Australian market as the leading provider of online DVDs and movies. References: Baillieu S. 2011. Quickflix limited. Baillieu research. Web. Retrieved on 17th July 2011 from http://investor.quickflix.com.au/IRM/Company/ShowPage.aspx/PDFs/1746-44538182/BaillieuResearchQuickflixLimn Barney J & Hesterly W. 2011. Strategic management and competitive advantage concepts. New York. Prentice hall, pp 45-89 Hanson P & Hoskisson R. 2011. Strategic management: competitiveness and globalization. Asia pacific. 4th ed. Australia cengage publishing company. pp 56-87 Quickflix limited. 2011. Rent DVDs with Quickflix. Web. Retrieved on 17th July 2011 from http://www.quickflix.com.au/ Saloner G et al. 2000. Strategic management. New York. Wiley publishers, pp 89 Read More