Netflix & Qwikster Essay Example | Topics and Well Written Essays - 1000 words

Netflix & Qwikster - Essay Example The author explains the organization’s changes in its service delivery was too fast and elicited negative responses from its customers. The organization’s Chief Executive Officer, Reed Hastings admitted this in one of his interviews with Nightline. Netflix never reviewed the plan before its launch and it admits to have made a mistake in its communication of the change. The organization also offered an apology to its customers even though at least 600000 of the customers had recalled their subscriptions. The announcement that restricted Netflix to streaming and established Qwikster to handle DVDs-by-mail drew negative comments on the organization’s Facebook page and was fast because the organization had not even acquired ownership of the @Qwikster Twitter account. The company’s chief executive however explained that despite the weaknesses in communicating the change plan, an internal change to separating the two services was significant to improving the org anization’s service delivery. Netflix’s competitors such as amazon.com also utilized the period to make deals with content providers. The organization had however been successful since its establishment in the year 1997 with such milestones as DVDs-by-mail services in the year 1999 and live-streaming in the year 2010 (Effron, 2011). Woo also explains the case and offer complimentary details. Netflix was a highly regarded company and its Chief Executive Officer renown in the industry before the announcement to split itself into two independent organizations. This followed a previous announcement that increased the organization’s prices by about 60 percent. These factors had adverse effects on Netflix’s market control that transferred to its share prices. This influenced a change from the separation decision but the raised prices were retained. In addition to the fall in stock prices, that dropped by up to 60 percent, investors exerted direct pressure on th e CEO because of the changes that were announced. Analysts also degraded marketability of the organization’s shares, following the announcement, a speculation that could add to the declining stock prices at the time. Effects of such decisions that force an organization to make rescissions have however occurred in the past with organizations such as Coca-Cola, Pepsi, and Delta air (Woo, 2011). How Netflix chose to convey the business model change and what went wrong with the communication plan Netflix chose to communicate the business model through a formal decision by its executives. This is the company’s approach to decision making and informed the initial decision to split the company. The formal approach to the communication, as opposed to informal communications that the Chief Executive Officer makes in social media also communicates the official approach of the decision that must have been handled by the company’s executives. Deliberation among the executiv es, as occurred in deciding on the split, was therefore the strategy to deciding on the strategy for communicating the change model (Bevin122, 2011). Reaction to Netflix’s strategy to handling the public outcry, success in alleviating the perceived problem, and the organization’s image following the attempt to alleviate the perceived problem I believe that Netflix’s decision to rescind its initial plans for separating its