(HP tried a similar strategy when it offered customers 50GB free storage on Box.net.) And Epps even imagines some could offer more innovative broadband models, like purchasing surfing time on an hourly or daily basis, rather than by contract or a monthly plan. The idea, simply, is to introduce more diversity into an ecosystem filled with poor iPad knockoffs. Now, it's clear that no tablet can match Apple's iPad at competitve or even slightly discounted prices--all have tried, and all have failed. (Samsung Galaxy Tab, Toshiba Thrive, HP TouchPad, BlackBerry Playbook--the list goes on.)
Wii Encore Case Analysis Since 1983Nintendo has continued to introduce game consoles to the gaming market starting with Famicon in 1983 and more recently the Nintendo Wii in 2006. They have focused on keeping the platform prices low but also offering the consumer high game quality as well as image quality. Nintendo has been associated with popular games such as Super Mario Brothers (1985), The Legend of Zelda (1987), and Metroid (1987). Since the release of the Nintendo Wii in 2006, famous for the introduction of motion-censoring controllers, Nintendo continued to outsell its two competitors, Sony PlayStation and Microsoft Xbox. It was not until 2010 that both of Nintendo’s competitors launched their version of motion sensing controllers.
We move on to Xbox that has an overwhelming advantage for being in the online gaming business since 2002. This long history of development with examples like Xbox Live gaming service that allows a subscription base platform for multiplayer gaming puts Xbox in the forefront. However the weakness lies in its heavy competition with Playstation, GameCube, and Nintendo Wiki. They are also seeing competition from cell phone users that can download online games to their cell phones. As for Barnes and Noble the shift of sales from the lower priced Kindle is always a playing factor in its demise.
They assumed that unlimited streaming service had more demand than DVD service. Before Netflix changed its pricing structure, the customers paid $7.99 per month for unlimited online streaming plan, or an additional $2 per month for the DVD-by-mail service. So the total cost for the user who wish to use both service unlimited online streaming and the DVD-by-email was $9.99 per month. However, this pricing was not financially sensible for the company because of the misconception of the demand of DVD rental service. Therefore, Netflix set the price $7.99 for both service unlimited online movies and unlimited mail-order DVDs respectively.
MGMT 211 – Management Foundations Case Analysis #1 Netflix Los Gatos, California CEO Reed Hastings started Netflix in 1997 after becoming angry about paying Blockbuster Video $40 for a late return of Apollo 13. Hastings and Netflix struck back with flat monthly fees for unlimited DVDs rentals, easy home delivery and returns via prepaid postage envelopes, and no late fees, which let customers keep DVDs as long as they wanted. Blockbuster, which earned up to $800 million annually from late returns, was slow to respond and lost customers in droves. When Blockbuster, Amazon, and Walmart started their own mail-delivery video rentals, Hastings recognized that Netflix was in competition with “the biggest rental company, the biggest e-commerce company, and the biggest company, period.” With investors expecting it to fail, Netflix’s stock price dropped precipitously to $2.50 a share. But with an average subscriber cost of just $4 a month compared to an average subscriber fee of $15, Netflix, unlike its competitors, made money from each customer.
The industry is very centralized. There are three main players on the market in 2000: Sony with 47% , Microsoft and Nintendo with 28%, Sega with 23%. However, Sega quit console business in 2001. (see comparing of main competitors in Annex1). The competitors worked in different segments: Sony in top-price segment (price 299$), segmented on professionals and their children, whereas Nintendo was targeting the middle-price segment(199$) mostly children.
(Blue Orb was known for free subscriptions but now it is paid). Analysis Blue Orb has been transitioning from research-orientated company to a retail software company. It is intending to do so by launching “SwitchBlade Pro” subscription base software. As of March 1, 2009, it has more than 1100 subscribers and 15,000 registered users from its previous freeware version of the program; which makes it insufficient customer base to generate enough revenue to break even under the status quo. (Exhibit).
In 2001 it succeeded in shutting down Napster (the leading on-line source of digital music), and it has threatened thousands of individuals with legal action. [10] This failed to slow the decline in revenue and proved a public-relations disaster. [10] However, some academic studies have suggested that downloads did not cause the decline. [11] Legal digital downloads became widely available with the debut of the iTunes Store in 2003. The popularity of internet music distribution has increased and in 2009 more than a quarter of all recorded music industry revenues worldwide are now coming from digital channels.
EXTERNAL ENVIRONMENT ANALYSIS • • • • Situational Analysis Industry Analysis Competitive Environment Analysis Environment Trends SITUATIONAL ANALYSIS • Politics/Legal – Governmental regulation – little regulation – Supplier agreement – start rent DVD after 28 day DVD in market. • Socio-cultural – Changing in customers’ buying behavior – Changing in customers’ watching method – Customers’ perspective about price, time and quality of services. SITUATIONAL ANALYSIS cont.. • Technological – VHS to DVD - become one of the companies adapt this technology – Changing to stream online – digital age – Wide-spread in gadgets market – PSP, Blue Rays Player and others • Demographic – Increase world population – 6.1 billion in 2000 to 7.2 billion in 2015 SITUATIONAL ANALYSIS cont.. • Economic – Customers can watch a movies without paying more. • Socio-cultural – Most of the people like to watching movies – Changing customers buying behavior INDUSTRY ANALYSIS • Threat of new entrants/ barriers to entry – low entry barriers – Industry leader – Customer loyalty is weak • Power of suppliers – Suppliers own content that company needs. – Licensing deals – Legal issues INDUSTRY ANALYSIS cont.. • Power of Buyer – Customer loyalty is weak (price changes) – Majority of revenue is from customers • Product Substitutes – Alternative methods of receiving content – On demand, purchasing INDUSTRY ANALYSIS cont.. • Intensity of rivalry among competitors – Many competitor – Few emerging market
Video and Digital Rental Industry Though video rental companies such as Blockbuster and Hollywood video have been around for generations, the digital age has caught up with the standard rental companies. Digital rentals and online streaming has cut down profits for these types of companies to the point of sending them into bankruptcy and buyouts. With easy access of online content, consumers have chosen to place their entertainment funds into digital rental over the cost of renting films via traditional physical stores. The effects of digital content on the industry have completely changed business models all around. In the past visiting a video rental store and spending time browsing the categories and titles was the norm and almost ritual for some households.