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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 [Link]
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.
Group 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.
Netflix can implement newer strategies such as collaboration of different traditional mediums as well
as digital mediums to create a collaborative method for increasing the overall effectiveness. These
approach towards traditional mediums would definitely effect the overall structure of Netflix and the
service provision as well as a marketing function.
Amazon Prime is a similar company which is also offering services to the customers. Amazon can
increase their overall sales by implementing strategies of intensive discounts as well as aggressive
pricing for the same content which is Netflix offering. As Netflix have, netflix originals amazon can
also implement Amazon originals. This would help Amazon to grow their own market and to compete
with Netflix in the specific region.
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