Netflix, Inc: Risks of a New Business Model

Authors
Allen, D., Vicente, J., and O'Rourke, J. S. (Editor)
Region
North America
Topic
Strategy & General Management
Length
10 pages
Keywords
Revenue
subscription customers
Communication
account
fee changes
stock price
Copyright Holder
Notre Dame
Student Price
$4.00
Target Audience
Graduate Students
Undergraduate Students

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.