Netflix in Hbo

Case Questions

In general, how in your opinion did Netflix manage to put itself in the enviable position that it occupied at the outset of fiscal 2010? More specifically, how would you account for the sudden—and very big—bounce in subscriptions that Netflix enjoyed during the fourth quarter of 2009? (Hint for question 2: Check the Netflix website.) Netflix put itself in an enviable position the same way as it always has” virally,” “word of mouth, office water cooler envy” , Netflix also spends heavily on marketing, especially on the Internet and new customers. “Netflix lives for free trials”. The big bounce in subscriptions stems from the offer of a one-month free trial and a lowered subscription price per month. Netflix uses the marketing tool of convenience. Movie dvd’s are delivered online using Wii, XBOX360, PS3 to your computer or television.

2. Use the situational perspective on organizational behaviour to describe the growth strategies developed by Netflix and the competitive strategies adopted by both Netflix and Blockbuster. Explain how these competitive strategies have contributed to organizationlevel outcomes at each company. The situational perspective acknowledges that appropriate action depends on the situation. At the outset, Netflix faced little competition in the online movie rental business, but the situation changed when Blockbuster entered the online market. To grow, Netflix used the growth strategy of a trial period, lower monthly costs, and immediate film access via the computer. Faced with Netflix’s competition, Blockbuster also had a situational change. To meet the competition, it used the growth strategy of online rentals, no late fees, and the combination of online/in-store monthly subscriptions. Organizations assessed in terms of financial performance. Netflix’s competitive strategies have contributed to a projected 16 million users by the end of fiscal 2010 with possible revenues of over $2 billion....