Primary File

Netflix, Inc: Risks of a New Business Model

Allen, D., Vicente, J., and O’Rourke, J. S. (Editor)
February 2, 2018
North America
Strategy & General Management
10 pages
Revenue, subscription customers, Communication, account, fee changes, stock price
Student Price: 
$4.00 (€3.75)
Average rating: 

After ten years of meteoric rises in revenue and subscription customers, a series of communication blunders has put Netflix in a perilous position. Netflix has mishandled key communications regarding account and fee changes affecting its customers. In three months, Netflix has since seen its company’s stock price plummet more than 60 percent.

Learning Outcomes: 
  1. To highlight how a formidable, respected company can rapidly damage its reputation with communication strategies that fail to account for customers;
  2. To provide an example of how a supposed change in a firm’s strategy can impact customer satisfaction;
  3. To encourage analysis of a poorly devised go-to-market strategy;
  4. To demonstrate the power the consumer has through social media in changing a firm’s broad strategies;
  5. To encourage discussion regarding the emergence of substitute products which replace well-grounded business models and the correlated expectations consumers have of the firm.