In one year, Netflix has doubled the amount of Canadian subscribers it has. Up from 13%, approximately 25% of Canadians (~8.7 million) are currently subscribed to Netflix. This is a great example of positioning and how they have successfully established their position in the consumer’s mind as the first and leading firm for streaming movies and TV series online. Although Netflix alternatives do exist, such as Target Ticket, most people are unaware of these alternatives because of how tightly Netflix has secured its spot in their market. Competitors were too late in their entry into this market, by the time of their entry Netflix had already become a household name. This situation is also a strong case of brand power combined with strategy innovation. Before they deployed their online streaming service, they had positioned a name for themselves in a very positive light by previously renting out DVDs through mail orders and charging no late fees. They cleverly adjusted their strategy to modernize the way their market conducted its business through delivering their content seamlessly and painlessly via the internet. Of course marketing played a major role in Netflix’s success, but I also believe their service helped sell itself (e.g. word of mouth, good reviews, recommendations, etc.) because what they have to offer is exceptional for the price that they charge.
Article: http://techcrunch.com/2013/09/25/google-plus-youtube/
Google is deploying a new tactic to expand their user base for their social networking site “Google+”. Google+ faces stiff competition, primarily from Facebook, however, they are hoping this new plan will help them gravitate to Facebook’s sky high level. With Google’s acquired video sharing website, YouTube, completely dominating the niche it occupies just as much as Facebook dominates its social networking niche, Google wants to levy this domination to enlarge Google+. YouTube will now require all users who want to comment on videos and upload videos to seamlessly create a Google+ account. I believe this is a clever, but slightly risky move. With total domination, this should not be difficult at all to implement successfully so long as people continue to desire to comment and upload videos. However, the quality of these newly created Google+ accounts could potentially be very low, since users are being forced as opposed to them choosing independently. In the article, the author talks about how the ultimate goal for this forced account creation would be to collect a plethora of data about more users, and to feed that data into their algorithms to serve highly tailored ads for their users. With Google earning 96% of their revenue from their advertisements system (source: http://www.investopedia.com/stock-analysis/2012/what-does-google-actually-make-money-from-goog1121.aspx), this motive absolutely appears to be true.
Article: http://www.itpro.co.uk/mobile/20680/blackberry-hit-934m-inventory-charge-over-unsold-z10-smartphones
Blackberry has just received a monstrous $934 million loss due to their inventory charge on unsold Z10 smart phones. They had extremely high hopes for this new smart phone release, believing that it would be the solution in their quest to regain their previous stronghold in the smartphone market. The physical keyboard that Blackberry had previously built into their phones was very attractive to text communicating consumers. I believe this particular segment of customers represented a high percentage of their overall customer base. With an all touch screen front and no physical buttons, I’d say that their new smartphone was tailored to lure in a younger audience; however, I believe this new design may have had the unintentional side effect of causing it to be more closely compared to their main competitor’s product, the iPhone 5S. With relatively similar designs, the main comparison points between the two would essentially be brand name, functionality, and price. With Apple having successfully marketed their smartphone as “premium”, Blackberry’s Z10 appears to be “second tier” in comparison. It would have been beneficial for Blackberry to “test the waters” and get an idea of how well their new product would do over a trial period, even if this would inevitably lead to a higher demand than supply. A higher demand would have been much less dangerous to Blackberry than the current reality they face.
Verizon is in the process of pursuing a drastic change in their business strategy. Currently, like almost every other internet service provider, they charge their subscribers a monthly fee for unlimited internet data. To increase profits, they want to begin charging popular producers of internet content (e.g. News websites) for the privilege of letting Verizon customers view their website. In other words, if a Verizon user wants to view a website that hasn’t paid the privilege fee, the site will be inaccessible. Colossal implications for their stakeholders and competition will be felt if this is successful. Their customers will undoubtedly be very unhappy with this decision, so much so that it would be unsurprising for them to switch internet service providers. However, it would be unwise for Verizon to not have predicted this in my opinion. I believe its quite possible that when they successfully carry this out, it’s only a matter of time before other big name ISPs follow their lead. Stakeholders from every ISP giant has the potential to be affected here. Profits will surge for these Verizon styled businesses at the expense of internet content producers/internet users. Alternatively, and this is what I believe will happen if leading ISPs implement Verizon’s strategy, new ISP businesses will emerge to satisfy the desire (of millions of people) to have net neutrality, dealing a large blow to the profits of Verizon and its counterparts.
