Choose a business that you believe fits into one of the following five business

Question

Choose a business that you believe fits into one of the following five business models: Brokerage Model, Advertising Model, Merchant Model, Community Model or Subscription Model. In 1-2 pages: ( I want to use Netflix if possible)

Research the elements of its business model and examine the site in considerable detail.

Discuss both the revenue and cost of your chosen business and explain how it creates value for its target customers.

Explain how the company may have changed business models and evolve over time.

Explanation / Answer

In 1997 when Netflix was introduced to the market it became a sensational success. Very first time some service was providing rental DVDs over the post in which a customer doesn't have to move from the couches to get the DVDs at their home.

There was a very large involvement of the video stores during definition growth of Netflix. Netflix ended that growth of the stores by providing services to the customers at the doorstep. Later Netflix launched its internet-based subscription service in 1999 and provide a huge number of movies to its customers. The specific change in the strategy of Netflix made him the undoubted king of the industry.

Blockbuster was the initiator of the rental service in the America. But blockbuster never replied new technology to its organisational structure. This specific mistake lead blockbuster to bankruptcy. Blockbuster had it stores all over the America which was very famous for distributing DVD and also had the bending machines which were overcome by the Netflix new technologies and web based streaming.

Major environment shift was shifting from the store based rental system to online Internet based rental system which benefited the Netflix for getting better viewership over the blockbuster.Later blockbuster filed for the bankruptcy which made Netflix a leader in the industry.

According to the McGahan model if a company is going through and industrial change environment then it should also change in the same way otherwise it will go bankrupt. It is obvious to change the company is overall strategies as well as technological advancement according to the market. If a company doesn't see the upcoming clues and arise that the fall conclusions for all the time then the overall loss of the company is very big. Same thing happened with Netflix, when industry was shifting towards the Internet Netflix went with the flow and chose to shifting with the Internet which lead it to be a market leader.

As Netflix enter the market they have successfully gain subscribers by using the escalation to the commitment technique. After they have been the specific market with using the same technique, believe that backing by the name of the Netflix Quickter would also gain the same profit and become an identity in the media world. Online content named The quickster failed drastically people wasn't able to related to the Netflix authentic name.

Group thinking played an important role in deciding this is specific name for the company subsidiary. Name company directly separated itself from the mainstream and the people's mind. A different name people wouldn't be able to relate this to the Netflix quality content. Thinking let this is specific idea to run for several months and which directly result it did Netflix to lose it valuable customers. After losing the valuable customers Netflix got a direct hit by 8 million subscribers. As the company was hit by a great margin top management decided to shut down the specific initiative and revert back netflix original identity.

Netflix leadership team has define their overall decision after discussing it towards the top management as well as looking at the statistics of the previous success of sticking to escalation of the commitment technique. By giving in priority to the escalation of the commitment, netflix has successfully grown its business previously. What is the current time the Marketplace has changed and the leadership team of that Netflix stored at the traditional method of their thinking and got a big surprise from the subscribers.

Blue thinking played an important role in decision making for the specific job. Group thinking lead the overall campaign to a disastrous position where it was very hard to come back but the companies with name helped in reviving it back to the situation of being profitable.

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