Netflix Business Plan Proposal Essay

2274 Words May 4th, 2012 10 Pages
Theory
Strategic planning involves taking information from the environment and deciding upon an organizational mission, and upon objectives, strategies, and a strategic architecture. There are many different ways to go about deciding on your mission. Michael Porter, a researcher from Harvard, had a few ways for developing frameworks for developing an organization’s strategy.
One of Porter’s main contributions was Porter’s value chain. The value chain is all the activities an organization undertakes to create value for a customer. According to Porter, there are two ways to gain an edge over competitors. A firm must provide comparable but value but perform the activities on the chain at a lower cost, or; Perform services in a unique way
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Netflix could increase their price annually and explain to customers that it is due to providing great new releases. With a gradual price increase, Netflix could get to their ideal price range and still keep customers happy and satisfied. Netflix made a mistake of increasing their prices too much, too fast which angered the majority of their cliental. With the gradual increase customers will be more understanding and more willing to accept the price change. Another proposal Netflix could implement is a customer value system. The customer value system would include several different levels of packages the customer could purchase. For example, the silver package will be the least expensive service, which will include streaming or DVD’s by mail. It will also include a narrower assortment than the higher bundles offer. The gold package will include both services at a slightly higher price. It will have a larger assortment of movies and television shows. The highest bundle offered, the premium package, will include streaming, DVD’s by mail, and video games. It will offer the best and newest releases. Customers will enjoy this because it will give them more variety and more options. They will be able to customize their services with Netflix in order to satisfy their needs. Another way Netflix could improve their strategy is to include advertisements and previews into their streaming system. By doing this they would be able to offer lower prices for their customers

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