Question

This is an individual task that carries  5%  of your coursework. You are required to submit
your responses by end of Week 3.

Based on what you have learned in this lesson, choose 1 company

Identify their:

1. business model components

2. internet business model
3. approaches to marketing to customers
4. approaches to sourcing with suppliers

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 1. Pure e-commerce – Netflix

Business Model Component

Netflix’s business model is subscription-based. It is a streaming service that offers a

wide variety of TV shows, movies, anime, documentaries and cartoons for subscribers
to watch anywhere and anytime. Subscribers must pay for a monthly plan and unlike
Spotify, there’s no free option in Netflix.

 Value Proposition

- provides entertainment to the users

- on-demand streaming with 24/7 access without ads
- original and high-quality content
- can be accessed through any device with internet, anytime and anywhere

 Revenue Model

- by subscriptions

 Market opportunities

- Expansion: Netflix can get into many other countries where the service is not
available, such as China. The company may make strategic partnerships in the
local market to increase its presence in new markets.

- Ad-based business model: Netflix has said no to this traditional business model,
but many other service providers make billions in revenues from ads.

- Mobile option: The company can offer a lower-priced option with a mobile-only
plan, to expand globally and compete more efficiently against cheaper
competitors.

- Annual subscription: This annual subscription with discounts over monthly fees
can encourage users to switch to yearly plans, avoiding the subscribers that
Netflix loses when they cancel right after finishing watching their favourite
shows.

 Competitive environment – Netflix’s top competitors

- Amazon Prime Video: The streaming service of the biggest retailing online
platform in the world which offers a nice selection of award-winning movies and
subscribers can download videos to watch offline.

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- Disney Plus: One of the top competitors, since it offers a wide variety of content,
from its animated masterpieces to Marvel franchises.
- YouTube TV: It has been increasing its content, thus offering more channels than
any other competitor, plus unlimited storage. It dominates 75% of Android
phone usage all over the world.
- HBO Max: 40 years of experience and provides a great variety of original content,
including some audience’s favourites, like Harry Potter, Game of Thrones, and
Friends.

 Competitive advantage

Brand: Netflix has a strong brand and reputation.

Growth: Netflix has been growing steadily in the past ten years, ensuring its
presence in 190 countries worldwide.

Customer base: There are more than 180 million subscribers, which gives the
company strong bargaining power with studios.

 Market Strategy
- Guerrilla marketing - This marketing strategy has worked beautifully for Netflix in
the past with the popular South Korean show – Squid Game. One of the most
striking things about Squid Game is the doll in the “Red Light, Green Light” game.
Netflix set up installations of this doll in various malls and events in cities like LA,
Sydney, Seoul, England and Malaysia.

- Personalized Content - Netflix has leveraged its user data to create a push
notification strategy that is highly customized. It alerts the users when new
seasons of their favourite series are released.

- Social Media (Instagram) – Netflix has a verified Instagram account which is to

promote and advertise all the new upcoming shows, series and movies.

 Organizational development

- Netflix’s key activities are all about offering the best streaming content

experience to its users. This means that, in addition to investing in technology,
and hiring and retaining talent to keep its platform running at high performance,
the company also needs to focus on its content offering. That is, besides
maintaining and expanding its platform on the website and apps, Netflix needs

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 to produce, select, license, and acquire relevant content, besides building
partnerships and negotiating with studios, content producers, and movie
production houses, while also analysing and understanding customer behaviour
to improve their experience. Last but not least, Netflix must keep developing its
subscription model and pricing strategy, to keep and grow its customer base.

 Management team

- Among the management team, there are the CEOs of Netflix, directors, software
developers, the content creators, etc.

Internet business model

Netflix is a business to customer (B2C) model. Netflix provides its streaming service
directly to its subscribed users/customers.

Approaches to marketing to customers

- Use Personalized Content - Netflix knows what TV shows and movies its users
like to watch. It uses this information to create customized recommendations for
them. This allows them to find the content they enjoy without searching through
many lists. It also ensures that users are always getting the latest and greatest
content. 

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- Ensure Multi-mode Experience - You can open Netflix on TV, computer,
smartphone, and tablet with seamless content continuity being watched.
- Target Emails Like Any Other Marketing Channel - Email marketing can introduce
Netflix to new users and show relevant recommendations to the old users.

Approaches to sourcing with suppliers

- Netflix has a wide range of key partners. Among them, media producers and
TV networks stand out, which license their content to Netflix; consumer
electronic producers such as Wii, X-Box, PlayStation, which bundle Netflix
with their systems; and Amazon AWS, since the Netflix platform is totally
hosted on AWS. Besides those, there are investors and regulators.

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