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Today, most people in the world concentrate on monitoring, discussing, and considering steps of the economy, the scale of economy, or even developmental speed of it. Everyone wants to make an epoch with faster development of the economy but this fluctuation of it may also become a big problem. There are more and more business organizations entering to market nowadays, the business is getting tighter and this hence leads to the increasingly fierce competition among organizations. These organizations have to face more challenge about the workforce, management, operation, markets, or even environment.
Competitive advantage is also an important factor that an organization needs to consider to survive in this competitive economy. Organizations have to use their information system intelligently about their relationships and workforce, improve their strategic behaviours and also managerial methods. In this situation, Netflix is one of companies that are successful by following rational steps that were proposed before. This assignment uses two theories about “customer relationship management” and “human resource management process” to describe The Netflix case clearer.
In this case, “DON’T LEAVE IT TO CHANCE” written y Ian Brooks and “UNEQUAL PAY LEVELS MAY ENTAIL A COSTLY PENALM of Rita Zeidner will be applied to discuss more about these theories. Many organizations now use the principles of customer relationship management to establish and maintain high standards of customer service (Customer relationship management, 2010, p. 523). They know how important customer relationship management is and try to improve and raise quality of customer service or customer care.
These two factors should be considered as sources of competitive advantage, which describe the ability to do better than one’s competitor. “For without customer are and customer service, there is no customer to manage by Customer relationship management” (Brooks, 1. 2007). According to “DONT LEAVE IT TO CHANCE”, Dr Ian Brooks also suggested 4 steps to managing the experience customers get when they do business with an organization. The experience here refers to information and feelings that customers get when they use products or services from an organization.
Foremost, the first key thing to do is conducting a survey and utilizing helpful information. Everyone wants to deliver great customer service but most managers cannot say what great service is (Brooks, 1. 007). The best solution is to ask for more information. This also means before an organization wants their staffs to do something with customers, manager of it needs to define that “something”, the manager needs to carry out a survey to define customer experience, exactly is what customers want and how they also want to be treated.
Collecting information and making a database about their customers to satisfy them with their suitable products or services. Moreover, the organization can improve their products and services by asking its staff to provide customers necessary information about what they are onsidering based on what it collected from them. The database will also demonstrate where customers live, how old they are, their income, or their feelings about products (Brooks, 1. 2007).
Using this database, the organizations can follow the aemana ana noDDles to communicate to tnelr customers ana Droaaen tne company customer’s base. Besides, organizations can use this collected information to build credibility from their customers, show them the good products or services that they can receive from companies, try to satisfy them, make them really trust the firm by ractical activities and give them a strong impression about the company. The second key thing that Ian Brooks suggested in “DON’T LEAVE IT TO CHANCE” is that how to keep customers coming back, by what ways? Keep it simply’ (Brooks, 1. 2007). It can be easily seen that complexity is not an asset in loyalty programs. Customers now are most likely to do business with a company that provides them safe, secure services and not really complicated to use. Moreover, cost and time are also considered as main components in making customers keep coming back after the first time they use products or services from a company. According to “DON’T LEAVE IT TO CHANCE”, customers always want products with lower price, higher quality and more post-sales services.
Following the competitive price with many competitive organizations nowadays, companies have to analyze economic information to minimize their price of products or services if they want to keep their customers’ loyalty. Besides, using time efficiently is also a good idea. Depending on which field of action that one organization operates, managers can divide and utilize time budget rationally by the ways that are useful for both the organization and its consumers. Time is your friend” (Brooks, 1. 2007).
However, to satisfy customers, managers do not only focus entirely on customers but also on their staffs. Almost organizations cannot have good customer services or customer care unless there is well-trained labour force. The next key things that Dr Ian Brooks showed that are training staff and giving them incentives right in order to force them work with their own enthusiasm, this is also a part of human resource management process that will be discussed more in the next theory. The final key thing is also about customers’ feeling, getting customer feedback.
This is likely similar with the first step but they are two different concepts, the first step refers to the beginning of a product or service, while the final step refers to the congressing and improving products. Step 1 describes the process of collecting information from customers through a survey before they use products or services, while the final step shows the way to collect comment from customers after using the products or services. However, both steps follow information collected from customers (Brooks, 1. 2007).
If Dr Ian Brooks discussed the importance of customer relationship management and ow to apply it in “DON’T LEAVE IT TO CHANCE”. The next famous writer will discuss the theory of Human resource management process in another Journal named “UNEQUAL PAY LEVELS MAY ENTAIL A COSTLY PENALnm. Human resource management is also a necessary approach that most organizations are now considering and trying to apply with the best strategic behaviour (Zeidner, R. 2010). If an organization cannot have the right people to do the required work, it has really little chance of long term success (Human resource management process, 2010, p. 28, 329). Rita Zeidner described three basic steps in Human resource management rocess: attracting a quality workforce, developing a quality workforce, and maintaining a qualify workforce. If the Customer relationship management theory Tocuses more on most tnlngs relevant to customers sucn as : customer relatlons, customers’ idea, customer satisfaction, customer’s feedback ; the Human resource management theory will focus entirely on the labour force such as : quality of labour force, size of labour force, rights of labour force, and salary of labour force.
According to “UNEQUAL PAY LEVELS MAY ENTAIL A COSTLY PENALM, Rita zetdner suggested hat the first step is the most important one, which describes how to attract good staff and workers. There are many components to get quality workforce. Some people want to work for an organization Just because of the famous performance and long historical operating of that organization (Zeidner, R. 2010). Others work only because they want to try to do a new style of Job. Nevertheless, almost people consider the welfare and also the compensation they will get when they want to work in a company. Does anyone want a lower wage? ” (Zeidner, R. 2010). The next step is developing quality workforce. This means managers do not only hire a group of workers that is called high quality workforce, but they also train them, direct them the ways to operate a machine, attract and satisfy customers. Though an organization has quality staffs that are good at remembering their knowledge from school or books, almost staffs feel perplexed in applying that knowledge to practical activities, they should be trained.
That why people differentiate between quality staffs and well-trained staffs. Rita Zeidner also emphasized that good staffs came from good managers. According to this Journal, sitting with staffs and identify those policies and ays of doing things that customers complain about or make it hard for them to do what the customer wants is a good way for managers to understand more about their staffs and train them easier( Zeidner, R. 2010).
Moreover, this behaviour is also considered as a way to attract high labour force that is discussed at the first step of Human resource management process. Besides, to survive in this competitive economics today, managers should know how to keep their staffs’ loyalty. This can also depend on relationship between managers and staffs, the benefits that staffs an receive from company, or the compensation they can get. Like the first step, compensation (or salary) is the key thing that everyone considers a lot.
No one wants to gain lower wage than others while they do the same type of work, this means everyone wants to get their meritorious compensation. The component that the writer wants to mention in this Journal is making quality pay. In “UNEQUAL PAY LEVELS MAY ENTAIL A COSTLY PENALM, Rita zetdner suggested that employees should be behaved equally; managers should not discriminate between women and men, old staffs and younger ones, or skin colour. Moreover, reward cannot be an insufficient criterion to maintain good workforce (Zeidner, R. 010). Overall, knowing more about both customers and employees and following what is happening to them, trying to improve the operation and behaviour of the organization to raise the quality of customer services, products and raise standard of living of employees are the key things that an organization need to obtain to develop its business and compete with other firms. Netflix is an online movie rental service offering flat-fee subscription plans for DVD and Blu-ray disc rentals.
Individual discs are mailed to subscribers in prepaid envelopes tnat Include a return mailer ana postage (wnat Is NetTllx, 2 Netflix had the growth profit of five million dollars and this number rose to one billion dollar in 2005 (Competing of analytics, 2010). This growth profit leaded Netflix Incorporated to become the world’s largest online movie rental service. Many people still wonder why Netflix could thrive in the short time like that.
Beginning with the Customer relationship management, Reed Hastings- CEO of Netflix incorporated- has build a safe, secure, and renowned customer service since he established this movie ental corporation (Netflix: Making Movie Magic, 2010, p. 350). By carrying out a survey and utilizing the experience he got in the past with Blockbuster, today Reed Hastings offers DVD delivery service free of charge to about six million customers and also provides service pack also receive free disk returns (Competing of analytics, 2010).
Moreover, Netflix also organized a contest to gather its customers’ idea in order to improve the tool it used to recommend movies to customers based on their renting habits (Netflix: Making Movie Magic, 2010, p. 351). This recommendatory tool is called Cinematch. Cinematch was made to identify the different types of movies; collect reviews of customers about variety of movies, find out the habit of customers and analyze this information (Competing of analytics, 2010). Netflix corporation also rewarded one million dollar for someone or company who can develop the efficiency of Cinematch tool (Netflix: Making Movie Magic, 2010, p. 51). Everything that Netflix carried out in the first step aimed to prove that Netflix utilize the information they collected from their members to improve their services, try to satisfy their customer nd make them impressive. In the second step, Reed Hastings showed that, by using efficiently the price and time budget, Netflix Incorporated cannot only maximize its profit but also keep their customers’ loyalty. Netflix recently declared Instant Viewing, which tool that was really interesting to its customers. By using this tool, its customers can wait as long as they want before finishing a streamed movie and without extra fee.
Since opening this service, Netflix’s net income rose to 67 million dollar, grew 6% (Netflix: Making Movie Magic, 2010, p. 351). In addition, among the arge and expanding base of devices that can stream movies and TV episodes from Netflix are Microsoft’s Xbox 360, Sony’s PS3 and Nintendo’s Wii consoles; Blu-ray disc players from Samsung, LG and Insignia; Internet TVs from LG, Sony and VIZIO; the Roku digital video player and TiVo digital video recorders, and Apple’s iPhone, iPad and iPod touch (Media Centre, 2010).
Netflix opened services that attracted a lot of customers, some customers even helped Netflix expand into markets it has overlooked (Netflix: Making Movie Magic, 2010, p. 351). They showed their loyalty with his movie rental company. However, Reed Hastings did not mention about training Netflix’s employees but he still mentioned about the workforce that will be discussed more in the Human resource management section.
In the final step of CRM, Netflix also used Cinematch tool to collect feedback from its customers and members, Netflix also adapt those feedbacks and try to give its members or customers new, attractive and intelligent services (Case study: Netflix, 2007). Overall, in this Netflix case, the first and final step described the same process of collecting information from customers r members by using Cinematch tool, both idea and feedback from them.. Netflix has a customer satisfaction rate of 95% and continues to meet and exceed customers’ expectations (Case study: Netflix, 2007).
NetTllx Tollowea nearly entlre tne steps 0T tne Human resource management process theory to develop quality of its labour force. “We’re unafraid to pay high” (Netflix: Making Movie Magic, 2010, p. 351). Everyone wants to gain high salary. Netflix knows the main criteria that everyone wants and attract its talent staffs based on that factor. For example, Netflix set the salary for employees higher than its competitors ike Apple, Blockbuster or Amazon to ensure that it can obtain more good staffs.
Furthermore, it also wants to make sure that its employees can work with high efficiencies. By developing its quality workforce, Netflix offers a unique and highly productive work environment with modern high technologies and high talent workers (Netflix: Making Movie Magic, 2010, p. 351). Besides, Reed Hastings also grasped his employees’ need. If he wants to maintain his qualify workforce, he needs to do something. Reed Hastings provides his staffs with a creative and freedom environment.
Some evidences show the reason why Reed Hastings can keep his mployees’ enthusiasm: let employees choose how much of their compensation is, support staffs to recruit 3 others they would like to work with, constrains work rules, increase time-off-budget for employees, and also make them responsible for everything they do(Netflix: Making Movie Magic, 2010, p. 351). Although competition is increasing, Netflix continues to gain subscribers and has plans to expand into Canada and the I-JK (What is Netflix, 2010). Looking at an online shopping corporation, Amazon Incorporated, which is one of the famous rivals of Netflix Corporation.
Although Amazon had established before Netflix id, they had some strategic behaviours that were quite different from Netflix. This made Netflix an opportunity to beat back Amazon and even some of the biggest names in media. For example, while Netflix offers its customers and members an Instant Viewing tool that helps them watch the streamed movies as long as possible without no extra fee, while Amazon charges from $3. 99 to $9. 00 for every movie or TV show that customers want to watch. In fact, customers only need to pay a fixed fee of $8. 99 for Netflix service and watch every trailer they want, while they have to pay $2. for every streamed movie they want to watch on Amazon. com and this will cost $20. 99 if they stream 10 movies a month (Amazon vs. Netflix, 2009). This fee is still constant with Netflix service. Besides, Amazon also partnered with Roku Company and produced a tool that allows customers to view streamed movie on TV through broadband connections, this tool is similar to what Netflix uses. However, Amazon is likely more prominent than Netflix with this service. The customers can select directly from the Roku menu while they have to first select Netflix movies from their web site before they are viewable from the Roku menu.
A 2009 survey found that Amazon was the UK’s favourite music and video retailer, and third overall retailer. Meanwhile, Netflix became the world’s largest online movie rental service (Competing of analytics, 2010). Nevertheless, Amazon had been established before Netflix, so it has more markets than Netflix with Canada market, China market, France market, Germany market, Japan market, United Kingdom market. Meanwhile, Netflix has only 2 markets in United States and Canada, and only intend to expand to I-JK soon. It can be easily seen that Amazon will obtain more customers than Netflix at the moment.
In addition, products of Amazon is also more various than Netflix’s such as: books, movies, electronic equipment, toys Tor KIOs, gardens groceries, computers, clotnlngs Sports or outdoors accessories, and pets (Amazon. com). At present, Amazon has 1 5800 full-time and part-time employees. However, Amazon seems not to focus on workforce like Netflix does. Its employment levels fluctuate due to seasonal factors affecting our business. Additionally, Amazon utilizes independent contractors and temporary personnel to supplement our workforce, particularly on a seasonal basis.
None of our employees is represented by a labour union and we consider our employee relations to be good. However, competition for qualified personnel in our industry is intense, particularly for software engineers, computer scientists, and other technical staff. Amazon managers still believe that their future success will depend in part on our continued ability to attract, hire, and retain qualified personnel. In this section, Amazon mangers should learn from what Netflix managers behave to their employees if they want to operate well in the competitive global arket today (How many employees does amazon. om have, 2008). Netflix, Amazon or other online providing services incorporated are members of the global economy where there is high competitive advantage. By applying 2 theories “the Customer relationship management” and “the Human resource management process” to Netflix and Amazon, it showed that the difference between 2 corporations in carrying out 2 theories will lead to different consequences. However, focusing on customer, human resource, relationship and management will help organizations survive and develop in this global market.