The highly controversial decision by Netflix in which customers have to manage two separate accounts and pay separably for streaming movies and physical DVDs ended today.
Qwikster will be abandoned by Netflix and they will go back to their original service, delivering both types of movie watching under one price. This was a failed strategy by Netflix, they shouldn’t have done this in the first place. If they had considered the basic principles of economics they should have known that people consider at the margin. Consumers will not appreciate the new and pricier service provided. As we have talked in class, this experiment by Netflix ended in a failure, and clearly they did not earn any profit. Their opportunity cost was too high, to sacrifice their loyal customers for a few more dollars on the new ones. A new long term strategy is a double edged sword, if implemented correctly a business could flourish, but wrongly the exact opposite will happen. Netflix implemented the wrong strategy at the wrong time, and it costed them greatly.
Good thing they were able to recover quickly, or else they would have ended up like Blockbuster – down the drain.
Seems like Europe’s stock market is heading towards the right direction.
The German and French leaders reported on Sunday that their governments will support Europe’s banks by providing “an adequate capital”. As a result the European stock market rose by 3%. However many are still worried about the effectiveness of this action, as Greece still owes money that they will need a bailout for. Many economists have argued that the best way for the economy to improve is for the government to stop intervening, but I don’t think that will work. People trust in their governments (usually) and believe whatever they are doing is correct. Despite the recent protests about the “1%” over the world, if governments stop intervening in the economics of a country, I guarantee that people will eventually feel insecure about their country financially and protest again to have them back.
Humans need shelters to feel safe, and the government is that shelter for society. It doesn’t matter if the shelter is broken or artificial, the majority of the society will not question the shelter because they feel comfortable under it. Europe should definitely make some renovation for their houses though.
Once the largest cellphone producer in the entire world, Nokia is ready to cut down 3500 jobs. They are closing down the Romania factory they opened 4 years ago to cut down 2200 jobs, along with 1300 more at its commerce business sector.
Nokia is going over a huge reconstruction right now, and job cuts are necessary if the company wants to stay competitive with Apple and Samsung. Personally I am a huge fan of Nokia. Their phones are intellegent, durable and reliable. However since the introduction of the iPhone, their traditional keypad cellphones waned and began to decline. They did not have a good business technology management and lacked behind their competitors in the touchscreen market. Just like Kodak, they did not catch on to the rest of the industry.
Right now Nokia is thinking of cooperating with Microsoft and their Windows Mobile operating system, which is a good idea for them. This way Nokia only needs to focus on the hardware side (which they are good at), and leave the systems to Microsoft (who is always “trendy” in technology). The electronics industry is a fast and ferocious battlefield, Nokia and Kodak are victims of bad business technology management.
Seems like the Iphone 4S will do just fine after all.
The recent annoucement of the iPhone 4S was a huge disappointment for many. Many expected the newly designed iPhone5 to be announced at Apple’s press event, instead they got a faster version of the current iPhone4. However Steve Jobs’ death will perpetrate the sales because people will buy it to commoderate his life and work. Businesses often take advantage of opportunities when a famous or important figure dies. When Michael Jackson died, it was estimated that he earned up to $1 billion in revenue for his posthumous work the following year.
As a business student, it’s important to understand consumer behavior. A lot of people believe that by buying sentiment related products they are showing respect by keeping a memento. It may be unethical for some, but opportunities like this don’t come very often and businesses should utilize them. However this will not work for everyone, a strong “brand” positioning is needed in order for consumers to consider them worthy of being remembered. Brand positioning does not necessarily have to be actual products and services. Both Jobs and Jackson were global icons in their respective fields, thus having a strong “brand”.