Relationship Between Exports and Trade

Relationship Between Exports and Trade Methodology Empirical Strategy The primary objective of this paper is to determine whether there is a main difference in the causal relationship between exports and trade finance among two groups of countries classified based on their financial systems; bank-based and market-based. As outlined in the literature review section, there are contradicting empirical and theoretical evidence on the impact of trade finance on exports and thus, the secondary objectives are first to determine the significance of this impact using my own proxy for trade finance and then, to capture the effect of the financial crisis on this causal link between exports and trade finance. Data Sources and Measurement Technique Annual data for 19 countries ranging in the period 2001 to 2011 have been used for the empirical analysis of this paper. All data used for the 10 annual observations for these countries were obtained from the World Bank’s World Development Indicators. The estimation technique in this paper generally follows the model used by Liston and McNeil (2013) but contains several modifications and extensions due to unavailability of data and different objective. They constructed both an export volume equation and an import volume equation to analyze international trade. The common variables included in both equations are real exports (exportst,j), real imports (importst,j), real gross domestic product which is equivalent to real gross national income (GNIt,j) , export demand (EXDEMt,j), real effective exchange rates (REERt,j), trade finance (FINt.j) and a dummy variable (Dcrisis) that takes a value of 0 from the period starting 2000 to 2007 and zero otherwise. Additionally, there are other dummy variables which classified countries based on their financial systems and they are structure size dummy (DUMMY1t,j) and structure activity dummy (DUMMY2t,j). Structure size dummy takes a value of 1 for countries with higher means ratio of market cap to bank credit as compared to structure activity variable which takes a value of 1 for countries with higher means ratio of value of shares traded to bank credit and 0 otherwise. Real exports and real imports are measured in constant 2005 U.S dollars and as for export demand, it represents market share. In this paper, the proxy for export demand differs from that of Liston and McNeil (2013) due to model modification and instead, the ratio of individual country’s export to world exports is used to represent market share as opposed to the ratio of the sum of imports to the sum of exports. Similarly, the proxy for trade finance is different in this paper due to data unavailability. Nevertheless, short-term net flows on external debt are instead used as the proxy for trade finance. Short-term net flows on external debt represent net lending received by the borrower during the year where the maturity of the debt is one year or less. The rationale behind using this proxy for trade finance is that trade finance is basically a short term debt used to carry on trade and hence, an increase in trade finance should be reflected in an increase in the proxy used. Mo reover, due to unavailability of data for real domestic product, it is substituted by gross national income and in theory, they should be equivalent. The last discrepancy from the paper of Liston and McNeill (2013) is that as a substitute for real exchange rate, real effective exchange rate index is used in this paper where 2005=100 for the index and REERi,j is included to account for relative prices between countries. Empirical Model To investigate whether financial system and trade finance affect trade flows, panel data models are estimated. The models consist of 16 countries which most of them are developing or under-developed countries. Interestingly, empirical studies such as Liston and McNeil (2013) demonstrated that countries with lower level of financial development give a higher importance to trade finance compared to developed countries and hence, the relationship between trade finance and exports should be high in this paper. The export volume specification is described as: Log(exportst,j),= ÃŽ ±0 + ÃŽ ±1log(EXDEMt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j + ÃŽ ±6FINt.j* DUMMY3t,J + Â µt,j (1) Where exportst,j are real exports for the jth country at time t, EXDEMt,j represents export demand, REERt,j is the real effective exchange rate index, FINt,j is the trade finance proxy, DUMMYt captures effects of the financial crisis as it is 1 for the years 2008 and onwards and 0 otherwise and DUMMY1t,j, DUMMY2t,j and DUMMY3t,j represent the classification of countries into 2 groups by financial system upon structure size, structure activity and financial structure respectively. As for import volume specification, it is arranged as: Log(importst,j)= ÃŽ ±0 + ÃŽ ±1log(GDIt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j + ÃŽ ±6FINt.j* DUMMY3t,J + vt,j (2) Where importst,j are real imports for the jth country at time t and GNIt,j is the real gross domestic income for the jth country. All other variables are the same as that in the export volume specification. Expected Signs of Variables All the variables included are expected to have some impact on international trade and the expected effect of these variables on exports and imports are given in table 1. Table 1. Overview of expected effects of variables used on exports and imports Variables Expected effects on Exports Expected effects on Imports Export demand positive Real Effective Exchange Rate negative positive Trade Finance positive positive Gross Domestic Income positive As export demand in this paper represents exports market share, an increase in export demand should also generate an increase in exports. Real effective exchange should have a negative impact on exports and a positive impact on imports respectively because when a country’s currency strengthen, its exports become less competitive whereas its price of imports become cheaper and imports tend to increase. Moreover, an increase in trade finance should have a positive effect on both exports and imports. Trade finance is used to fund firms for them to be able to continue exports and imports also should increase due to the imports of raw materials used for exports. Also, as gross domestic income increases, demand for foreign goods increases and thus, imports are also expected to increase. Estimation Technique Both equations (1) and (2) are estimated first by their base models to analyze the common explanatory variables for export and import volumes. In the export volume equation, the base model includes export demand (EXDEM) and real effective exchange rate (REER) whereas in the import volume equation, instead of including export demand (EXDEM), real gross domestic income (GNI) is included. Then the base models are extended by including the proxy for trade finance (FIN). Log(exportst,j),= ÃŽ ±0 + ÃŽ ±1log(EXDEMt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + Â µt,j (3) Log(importst,j)= ÃŽ ±0 + ÃŽ ±1log(GDIt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + vt,j (4) Equations 5 and 6 are then extended by adding dummy variables which represent financial system of a country. The dummy variable takes the value of 1 when a country is classified as market based and 0 otherwise. Separately, they are interacted with proxy for trade finance which will enable the analysis of whether between market and bank based economies are more dependent on trade finance or there is no difference at all. Log(exportst,j),= ÃŽ ±0 + ÃŽ ±1log(EXDEMt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j+ Â µt,j (5) Log(importst,j)= ÃŽ ±0 + ÃŽ ±1log(GDIt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j + vt,j (6) Finally, equations 5-8 are enhanced to include a dummy variable Dcrisis which captures the effect of the financial crisis and which takes the value of 1 for the period 2008 to 2011 and 0 for the period of 2000 to 2007. By adding this structural break, during the crisis, it is expected that exports will be more reliant on trade finance in general due to turmoil in financial markets and the presence of a liquidity crunch. Additionally, whether how this affected the analysis made from the interactions of the dummy variables in equation 5 and 6 needs to be tested and analyzed. The results of the panel data regression and its analysis are provided in the next section. Log(exportst,j),= ÃŽ ±0 + ÃŽ ±1log(EXDEMt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + Dcrisis + Â µt,j (7) Log(importst,j)= ÃŽ ±0 + ÃŽ ±1log(GDIt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + Dcrisis + vt,j (8) Log(exportst,j),= ÃŽ ±0 + ÃŽ ±1log(EXDEMt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j + Dcrisis + Â µt,j (9) Log(importst,j)= ÃŽ ±0 + ÃŽ ±1log(GDIt,j) + ÃŽ ±2 REERt,j + ÃŽ ±3 FINt.j + ÃŽ ±4FINt.j* DUMMY1t,j + ÃŽ ±5FINt.j* DUMMY2t,j + Dcrisis + vt,j (10)

Themes Of Betrayal In James Jo Essay -- essays research papers fc

Origins of the Theme of Betrayal in James Joyce's Dubliners Throughout his early years, certain people and events heightened Joyce's awareness of the hopelessly corrupt environment of Ireland that had betrayed so many of its own. The more profound of these enlightening inspirations were the betrayal and downfall of Charles Stewart Parnell, the indifference of Henrik Ibsen towards literary protests, the neglected native artistry of James Clarence Mangan, and Joyce's own role as Prefect. These occurrences provoked Joyce's bitter resentment towards Ireland, initiating the gradual alienation towards his church and homeland. The issue of betrayal is prevalent throughout Dubliners, for Joyce imagined it, hated it, and feared it.   Ã‚  Ã‚  Ã‚  Ã‚  James Joyce was born into a country dominated by England, and the cause of Irish freedom captured his imagination at an early age. The spokesman for this cause was Charles Stewart Parnell, who became a heroic figure to Joyce. It was the early period of Joyce's life that saw Parnell greatest influence and tragic betrayal.   Ã‚  Ã‚  Ã‚  Ã‚  By 1889 the attempt to implicate Parnell in the Phoenix Park murders of 1882 had failed, but in the same year he was accused of adultery in the divorce suit of captain O' Shea. At first it appeared that Parnell might weather this scandal, but a coalition of political enemies and devout Catholics ousted him from leadership of the Irish Parliamentary Party, and the rural population of Ireland turned against their leader with savage hatred. Even Parnell's Lieutenant Tim Healy, who had vowed never to betray his leader, finally turned against Parnell. After a year of campaigning against his enemies, Parnell died on October 6th, 1891—this day marks the beginning of James Joyce's resentful feelings towards Ireland, which were eventually revealed in Dubliners.   Ã‚  Ã‚  Ã‚  Ã‚  When Parnell's body was brought to Dublin for burial, thousands were waiting for a glimpse of the coffin. Among the spectators was St. John Irvine, who mournfully recalled: It was taken from a deal case—'which was thrown aside, but, as it fell, crowds seized it and tore it into fragments that they might have even that as a relic of him'—and carried to City Hall. It lay there under O'Connell's statue through a wet and stormy morning and noon, while t... ...s Clarence Mangan evoked in Joyce the fear of restriction and limitation, leading to his departure from Ireland. From Henrik Ibsen, Joyce learned to ignore protest and controversy, heightening his bitter resentment towards Ireland after nine years of frustration in finding a publisher for Dubliners. And it was Joyce's failed role as Prefect of the Sodality that led to his abandonment of Irish Catholicism. His early life proved to Joyce that Ireland was corrupt, both morally and spiritually. Therefore, Joyce's alienation from, and resentment toward, Ireland were inevitable, as was the theme of betrayal in Dubliners. Works Cited 1) Goldberg, S.L. James Joyce. New York: Grove Press, 1962. 2) Kershner. R.B. Joyce, Bakhtin, and Popular Literature: Chronicles of Disorder. North Carolina: North Carolina U.P., 1989 3) Mangalaner, Marvin, and Richard Kain. Joyce: The Man, the Work, the Reputation. New York: New York U.P., 1956. 4) Sullivan, Kevin. Joyce among the Jesuits. New York: Columbia U.P., 1958. 5) Ellman, Richard. The Conscience of Joyce. Toronto and New York: Oxford U.P., 1977. 6) Garrett, Peter K. Twentieth Century Interpretations of Dubliners. New Jersey: Prentice-Hall, 1968.

Franklin D. Roosevelt :: essays papers

Franklin D. Roosevelt On January 30, 1882 in Hyde Park, New York Franklin Delano Roosevelt was born.James Roosevelt, Franklin's father, was a prosperous railroad official and landowner(Lawson 25). His predecessors, when they came from the Netherlands, were succes Roosevelt learned from private tutors, not going to school until the age of fourteen. He had already studied German, Latin and French by the time he had started school(Freidel 6). Sailing, bird hunting and stamp collecting were among his hobbies. On his In 1896, at the age of fourteen his parents sent him away to Groton, Massachusetts, to a private, boys only, boarding school. He was not very popular among the students, but was respected by his peers and was never the object of pranks pulled by his fellow students. Roosevelt went on to enter Harvard in 1900. There too Roosevelt remained an average student, making it through with a C average most of the time(Hacker 19). At Harvard, his social activities took preference over his academic pursuit and the In 1903 Roosevelt graduated from Harvard and entered the Columbia Law School. He dropped out in his third year after passing the New York bar examination(Hacker 24). Soon after, Roosevelt started practicing law with a New York law firm. While still in law school, Roosevelt met Anna Eleanor Roosevelt a distant cousin, only a few years younger than him(Alsop 28). They were married on St. Patrick's day, March 17th, 1905(Freidel 13). He was twenty-three and she was twenty-one. Her fathe A few years later in 1910, Roosevelt accepted the Democratic nomination for the New York State Senate(Freidel 17). He won the election, and in the following January he entered the Senate at the young age of twenty-eight(Freidel 18). Later in 1912 he ra In July of 1921, while vacationing at Campobello Island, he went sailing with his children. One day, they saw, what appeared to be a forest fire, on a nearby island they quickly sailed to shore to help put out the fire. It took a couple of hours and w was able to walk in the pool unaided. His disease, poliomyelitis, had affected him on land but in the water he was as quick as anyone. In 1926 he bought Warm Springs for $200,000(Hacker 40). In 1927 he contributed two-thirds of his wealth(Freidel 47) a His physical disabilities didn't hinder his climb of the political ladder.

the female care product :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å" Why do you always complain about your cramps and your uncomfortability. Look at these people; they’re having a good time while on there period.† That’s what I told my girlfriend when looking at a recent tampon ad. It’s funny though, that this particular ad we were looking at, was talking about how they (the tampons) don’t hurt, how they helped conquer fear and also the race of people that it used.   Ã‚  Ã‚  Ã‚  Ã‚   When I first look at this ad I see two girls and a guy playing Frisbee. It seems like a fun atmosphere, so it caught my eye. In one picture they show a girl taking the Frisbee away from a guy and in the next she is taking it away from a girl. It’s a happy ad that shows two girls possibly on there period. Which in the case of the product being sold an underlying meaning of you can have fun and still be on your period could be inferred.   Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å"Sweet!!! (and I was almost a no-show ‘cause I thought using a tampon would hurt.) Obviously the advertisers are saying that these specific types of tampons are comfortable. It’s a smart move to make this the very first thing you see in the ad because this automatically assures the consumer that this product is not harmful in anyway. In a buyer’s eyes this will trigger a need to be safe. Most people nowadays are risk adverse and try to avoid all possible situations that compromise they’re safety. So by reiterating that this product is comfortable, the buyer already feels â€Å"protected† without even knowing it. Although you must consider this, everybody has a different body stature and what is comfortable to a â€Å"regular† sized woman or lady might not be comfortable to an overweight or smaller woman or lady.   Ã‚  Ã‚  Ã‚  Ã‚  Ã¢â‚¬Å"The continuous pressure is to create ads more and more in the image of audience motives and desires.†(Marshall McLuhan, pg. 61 cc) The tampon advertisers must know this to be true being that they affiliate the need to dominate with the ad. â€Å"Playtex helped me conquer my fears, then Jill and I conquered the boys!† Being that this was stated in the ad, the main character of our advertisement had an enormous fear of using tampons, possibly because foreign objects in small places can be intruding and painful. But she was reassured by trying the product herself. Also some of her fears might have been odors, even though the captions do not mention deodorants or scents to the tampons.

Managing Activities to Achieve Results Essay

Structure of an organisation is the way the people and different departments are set out. XXX School’s structure is shown in Appendix 1. It’s is widely split into Thai and foreign areas with different departments that interact daily to fulfil its processes and functions. There is evidence to suggest it uses the matrix model. For example XXXX the Head of English Kindergarten department is also responsible for undertaking the project of improving the schools website. Mullins (2005:a) notes culture as ‘the collection of traditions, values, policies, beliefs, and attitudes that constitute a pervasive context for everything we do and think in an organisation’. Due to the being both foreign native speakers and Thai teachers present in the school, a divide in beliefs, values, policies, traditions and processes is present. The two ‘sides’ maybe well undertake tasks in a different way, however there is one belief that is clearly paramount throughout the school. The most important belief is the service and relationship provided to the customer (customer being the student and their parents) is everyone’s number one priority. Whether you are a native English or Thai teacher the attitude fed down from the top is the strong value and belief that the student’s education is most important. Processes are the series of links that define  the function. Within every organisation functions have to be performed. Fig 1. Examples of functions carried out at Varee School Fig 2. The processes involved in planning a lesson. Planning a lesson involves relatively few departments and people. It’s mainly an individual task that is easy to complete and can be repeated easily, something that is important to keep the business efficient. Certain processes that involve more people and more departments are not so efficient. Most obvious problem being the Thai/foreigner cultural difference. There are problems with language barriers, different attitudes and beliefs. For example, Thai people don’t like to ‘loose face’ or cause somebody to ‘loose face’. This can cause problems as often they would rather mislead people than be honest and accept they can’t do something. Business process transformation and TQM would be able to improve the interrelationships between the different process and functions and this is talked about later in the report. Taken from the latest school magazine, published December 09 it states the mission statement as: ‘In order to maintain high standards of educational development, the school follows and emphasises three main goals which are to maintain a progressive curriculum, a proficient management and a highly productive teaching staff. XXX School strongly believes that if these goals are carried out, our students will gain various skills which are crucial in life such as intellect, communication skills in foreign languages, technology and moral development. Our students will mature into good citizens physically and mentally. Over all they will develop social skills enabling to and learn harmoniously in society. ‘ Within this mission statement three main goals are given, lead to its overall objective: * to maintain a progressive curriculum * a proficient management * a highly productive teaching staff. The overall objective being: * to maintain high standards of educational development The mission statement along with the aims and objectives have meant that a structure designed for the most effective teaching possible has been developed as well as providing the customer (the student and their parents) with the a path of education they wish to take. They can study their subjects in 80% Thai or can study on the English programme where they will be studying mostly in English. Along it could be suggested the mission statement is a little long, there can be no doubting that it has created a sense of direction and the main belief that is comes down through the management in the school to all the staff. Evidence of this is seen in not only my personal objectives but many other teachers’ also. XXXX, Head of Mattayom for foreign staff states in the school magazine â€Å"Our goals are simple; to give every student the best education available; to foster creative thinking and a global outlook; and to instil a love of learning in every student. (Teachers at Varee love teaching and genuinely care about their students.† In addition XXXXX, Mattayom Teacher in the native English teaching department says â€Å"My goal is to give the children the confidence and tools required to expand their English abilities so that they can interact in an increasingly global English Community†. The school is of course a business and there for wants to make a profit. By carrying out these aims and objectives the school is providing the customer with great service, meaning the school will continue to grow thanks to an enhanced reputation. If the school continues to grow, with good business management to, the school will continue to make a profit. How does the school carry out its functions to meet its objectives? A curriculum for example is crucial to providing quality teaching and obviously quality teaching is the school’s main objective. According to my seniors, Fig 3. , shows the  communication process they will follow in updating a curriculum. One of three people can decide that change in curriculum is required; The Head Mistress, Director of foreign staff, Head of Department. Reasons for a change can be due to results, government changes, private tests changes, or parent’s requests. In this example we will assume that the Head Mistress has requested the change. Fig 3. Communication process XXXXX School will follow when updating a curriculum Happy with the curriculum? No Happy with the curriculum? YES Finished curriculum Happy with the curriculum? No Happy with the curriculum? NO Happy with the curriculum? YES YES Happy with the curriculum? YES Finalised and continuously monitored Head of Department (Will make the improvements) Curriculum is provisionally taught Director of foreign teachers Head Mistress The methodology used in this process is carried out by four levels of the organisation. It’s very much based around completing the task and then checking, discussing and improving if possible. Once the Head Mistress is happy it is provisionally taught and again checked. Again, if any improvements can be made they are, if not its taught and continuously monitored. With every process there is an output. The schools main and ultimate output to the customer is the education of the student. The Head of departments work has to be referred back to higher authority to be checked and this means the quality is checked before being moved onto the next  stage. By continuously carrying out processes, such as improving the curriculum, the standard of education, the final output, will be strong. As with any businesses, weaknesses and improvements can always be found and that’s why it’s important for the curriculum and other such areas to be continuously developed and improved using all areas of the organisational structure. Bibliography Mullins, L.J, 2005a. Management and Organisational Behaviour. 7th ed. Harlow: Pearson Education Limited. Varee school Magazine Mullins, L.J, 2005b. Management and Organisational Behaviour. 7th ed. Harlow: Pearson Education Limited. Hall,D, Jones, R, Raffo,C, Anderton, A, 2008:a. Business Studies. 4th ed. Harlow : Pearson Education Limited

Netflix Case Study Essay

Company Overview The idea behind Netflix, the most popular provider of online and by-mail rental services, came from an unsatisfied, embarrassed customer. Reed Hastings, founder and current CEO of Netflix, was charged 40$ as a late fee because he returned the movie Appolo13 six weeks late (Zarafshar, 2013). This made him think creatively about an idea to transform the movie rental model into a more innovative business. In 1997, Hastings and Randolph started Netflix which was a DVD rental-by-mail business with no subscriptions. Later in 1999, and as a step further towards developing the business, Hastings launched the subscription-based business model which was based only on renting DVDs by mail with multiple plans dependent on the number of titles at a time. Netflix offered its subscribers to choose from its extensive DVD library with more than 120,000 titles for unlimited monthly DVD rental with free shipping as well as zero late and per title rental fees. It was very attractive for customers to mak e subscriptions on the spot as they were tempted with the incredible Netflix service. For example, Blockbuster subscribers found Netflix’s offers more appealing and it was easy for them to make the switch. (Wikipedia, 2014) Netflix has been always open to new opportunities that Hastings believes it will sustain the company’s competitive advantage. A new opportunity was captured when the streaming service was introduced in January 2007 where it enabled Netflix’s subscribers to instantly watch movies, TV-episodes, documentaries, series and much more on internet-connected devices such as smart TVs, PCs, DVRs, Blu-Ray players and special Netflix players. During that time, Netflix was leading the industry as it was the first company to offer paid streaming  services to its subscribers in US, Canada and Latin America. Today, Netflix is known as the largest provider of online streaming service with almost 44 million subscribers in more than 40 countries offered access to an ever-growing library of thousands of titles. (Netflix PR, 2014) Netflix executives were keen to devise flexible strategies accompanied by a profitable business model that gave them sustainable competitive advantages over their rivals. They constantly monitor their external environment and do the required amendments quickly and swiftly to leverage the emer ging opportunities and tackle the upcoming threats. Strategies ranging from growing its library content, service differentiation, very competitive DVD-by-Mail service, unique marketing plan and ambitious international expansion all made Netflix a leader in its industry. However, Netflix isn’t the only player in the DVD-rental and streaming services market. Blockbuster and Redbox are one of the many competitors in the DVD-rental market that use different competitive models to outcompete Netflix’s. Hulu Plus, Amazon and HBO GO have fueled the competition in the streaming service market. They all compete on acquiring more titles to expand their libraries and try to offer the best subscription plans in order to get more market share. Having this in mind, what should Netflix do next in order to outperform its competitors and sustain its competitive advantage. External Environment Analysis Macro Environment We will start our assessment of the external environment by examining the PESTEL factors in the Macro (General) Environment of the movie renting industry. Political Factors Network Neutrality is the principle that preserves the internet to remain free and open for all users. It defends against discrimination of the internet use based on the content or website services (Ala, 2014). Major Internet Service Providers (ISPs) would like to charge a company like Netflix more money because it’s website of online movie streaming is eating a lot of their internet bandwidth. According to the broadband internet service tracking firm Sandvine, Netflix alone is consuming 32.3% of the downstream traffic in North America, much more than any other site or service. (Protalinski, 2013) Major ISPs may well contemplate the idea of blocking Netflix from their service to release all that traffic or they  might demand increased internet subscription fees from Netflix to continue hosting their website; this would be a disaster for Netflix who is facing increasing content obligation costs and if ISPs opted for that step, they will have no other choice other than increas ing the monthly fees of their streaming service which will definitely not come to the delight of their customers. All of this is against the Net Neutrality rule, which states that all internet users will be under the same conditions to get space on the net whatever their website or content, is. â€Å"The possibility of regulations designed to mandate the neutrality of the Internet has been subject to fierce debate, especially in the United States† (Internet Cleaner, 2013) In an interview (Netflix Investor Relations, 2014), Reed Hastings says he is not concerned with the threat that ISPs might block Netflix since â€Å"it will fuel the fire for more regulation and no one is interested in this†. Environmental Factors Historically, the video rental industry was built on the idea of reusing the same stuff by different people over and over again and this concept is environment-friendly. Moreover, switching to the soft copies of media and streaming it through the internet reduces energy consumption and pollution levels due to a decrease in delivering DVDs by mail and also less manufacturing of DVDs. Socio-Cultural Factors People are expected to watch movies or play video games when they have more leisure time. However nowadays, many people are having 2 jobs to support their families which basically means less leisure time and less watching movies. In addition to that, people are now becoming more convenient watching movies at their homes instead of going out to the theaters since it is cheaper, less time consuming and is ideal after having a long tiring day; this emerging trend will boost the volume of the streaming media subscriptions. Moreover, the rapid acceptance of the society for technological advancements greatly benefits the online movie rental industry, this is particularly correct due to the new educational and pedagogical systems that stress more on computer learning making people more convenient when dealing with technology. Technological Factors The rapid technological advancements and production of electronic products such as Blu-ray DVD players, Video game consoles, smart phones, smart TVs and many other devices that can connect to the internet, made the concept of online rental and video streaming easier and more adaptable. As the internet services are becoming more popular and an important ingredient in people’s daily life, companies like Netflix will be able to increase its operations especially in the video streaming service. Therefore, the advancement in technology is an opportunity and enabler for the industry as a whole. 4K streaming is a new high-quality video technology that reduces compression rate and produces output in 4K/Ultra HD format. (Burns, 2014) Netflix started offering some of its content in this format, which signals their aim to go side by side with technological advancement. Of course, to be able to stream at this high resolution, you need to have a super speed internet (40-50 Mbps) so people now have a reason to upgrade and it means more profits to the ISPs. (Netflix Investor Relations, 2014) Economic Factors The industry depends on the consumers’ spending power and real income, which is affected by employment rate, interest rate, tax rate and inflation rate. When consumers have more money, spending on entertainment facilities rises and this is an opportunity for the industry. On the other hand, the spending power of households usually decrease in recession periods, so they will probably tend to sacrifice the theater ticket and may well reward themselves with some older movies available on streaming services such as Netflix’s. Legal Factors There is a considerable potential for legal actions to be taken against companies operating in this industry, actions related to the use of licensed material and customers’ privacy issues. Moreover, any company that operates in the international market should study well the rules and regulations specific to that market or else it will shortly fall in trouble or lose valuable opportunities. Some legal actions might have a positive impact on companies in this industry such as the amendment of the VPPA law discussed earlier. On the other hand, Netflix had some hard times in 2010 with lawsuits pertaining to privacy issues when an academic research suggested it exposed the movie preferences of its customers for the programmers who  participated in the Netflix prize to produce a better recommendation algorithm. (Buley, 2010) The issue was later resolved and Netflix cancelled the sequel â€Å"Netflix Prize II† competition. Competitive Environment In order to determine nature and strength of the competitor pressures in the movie rental industry Netflix is operating in, we use Porter’s five forces model of competition. Bargaining Power of Customers In the streaming market, customers have a high bargaining power; the reason behind this is that people are very well informed about other companies which are in the same line of business as Netflix. Customers are always in search for a better deal because buyers are very price sensitive when it comes to the video rental industry and they are always looking for the best quality, so they will leave Netflix as soon as a better offer is available since there is no switching cost. Customers always expect product differentiation, and if Netflix does not give it customers this variety, they will simply leave. Bargaining Power of Suppliers Bargaining power of suppliers is very high; Netflix relies on getting exclusive rights to certain television shows and movies so suppliers play a very big role in bargaining over what content is exclusively reserved for Netflix users. Also, there are only a number of studios who supply the movies and shows. Another reason bargaining power of suppliers is high is that Netflix can only get its content from those studios and there is no substitute for that content, also contracts with those studios are usually for a short period of time (1-3 years) and expensive; a good example of this is when Netflix was unable to renew its contract with Starz because they were demanding a much larger amount of money – $300 million instead of the $30 million paid in 2008. (Kafka, 2011) Threat of New Entrants Although entering the online movie rental industry needs a huge initial investment to get content and secure exclusive copyrights, we can say that the threat of new entrants is moderately high since it remains a growing market with a growing demand, and huge rich companies like Apple and Google may be tempted by its growth potential and might well enter the play stage  with generous budgets; and also the low exit costs in this market make this threat high. But in order to be profitable in this industry, companies need to achieve economies of scale and try it best to have a large volume of subscribers, which in Netflix’s case is how they achieve profitability, and also to have a large number of viewers if it is a VOD company. Threat of Substitutes The threat of substitutes is relatively high since substitutes are available, such as Blockbuster On demand, Amazon Prime Instant Video and many other VOD streaming media. Rather than having a subscription of unlimited views, customers can switch to a pay per view option. Another reason is that there is no switching cost. In addition to that, the prices of substitutes are convenient and low which makes it relatively easy to switch. Customers might also choose to switch because companies working on a VOD bases have better features such as making certain television shows and movies available within a few hours of airing them on T.V, unlike Netflix where customers need to wait a few months. Intensity of Competitive Rivalry Competition is very high in the video rental industry; Netflix has many current competitors which include Blockbuster on demand, Amazon, Apple, Hulu Plus and many others. Also Netflix has to keep scanning the environment for new competitors since it is easy for new rivals to enter the market for there are low barriers to market entry and exit. Netflix must fear its competitors because they can easily lose customers to them since switching cost is very low and they have no loyalty programs to make it harder for customers to leave. VRIO Analysis Netflix’s top resources can be listed as follows: 1. The variety and big selection of titles (comprehensive library of movies and TV-episodes) 2. The unique software for streaming and recommendation 3. Nationwide distribution network 4. CEO Reed Hastings Resources must have enough competitive potential for the organization to outcompete its rivals. By applying the VRIO framework (see table 1), one of  the best strategic tools to evaluate the firm’s resources, Netflix is shown to be at a moderate sustainable position. Providing its subscribers a wide selection of titles has been always Netflix’s primary strategy. During the year 2012, its library has reached over 120,000 DVD-titles and more than 30,000 titles ready for streaming (Wikipedia, 2014). This extensive library is definitely valuable for Netflix to attract more subscribers to watch from a wide variety of titles. Moreover, this resource is rare as not all competitors are able to offer its customers a huge number of titles for both DVD-rental and streaming services. However, such a comprehensive library is not very difficult to imitate. Apple and Amazon, for example, are constantly working hard to gain license agreements to acquire new content and grow their lib rary of titles. An obvious example on this is when Amazon won over Netflix and secured the streaming rights of the whole 8 seasons of Fox’s award winning series ‘24’ (Cantisano, 2014). Netflix has shown to be organized to capture the value of its library by making it available for its subscribers when using both services. Thus, having a big selection of titles places Netflix at a sustainable competitive advantage as long as no competitor grows a more extensive library. Otherwise, it will become easy for Netflix subscribers to switch to another company that offers wider selection. Netflix had well developed and easy-to-use software that provides titles recommendations for each subscriber based on personalized ratings. This resource is an added value to Netflix’s business because it became convenient for subscribers to quickly view movies they like or place them on â€Å"instant queue† for watching them later. (Netflix, 2014) Netflix announced a 1 million-dollar compe tition to challenge programmers to create an algorithm that can beat its Cinematch system by at least 10% of enhanced accuracy (Netflixprize, 2009). In 2009, three teams of talented programmers combined forces and developed that algorithm and Netflix’s system was given a major boost. Since the software is customized only for Netflix and consists of complicated algorithms, such a resource is considered rare. Although Netflix had set the bars high for its rivals, another company can call for a competition or hire top programmers to develop their own software that may beat that of Netflix’s. There is always room for improvement, and for that reason, this software can be imitated. Nevertheless, Netflix is continuously prepared to capture the value out of its smart software and make the best  use of it. As a result, the recommendation software positions Netflix on a sustainable competitive advantage as long as no competitor develops similar or improved software. For its DVD-by mail service, Netflix had largely invested in developing its nationwide distribution network by establishing as much distribution centers as possible. Their strategy is to provide customers with the fastest shipping service by delivering ordered DVDs within one business day. This is of a big value for customers who used to wait several days to obtain a DVD. To make it more effective and efficient, Netflix util izes a distribution network system (logistics system) that saves a lot of time looking for the closest center that has the ordered DVD in stock. The combination of wide-spread distribution centers and effective logistics software makes it a rare resource. It’s still almost impossible for competitors, such as Blockbusters, to deliver any of its DVDs within 1 business day. Furthermore, it’s difficult to have a large number of shipping points close to every home. Therefore, this resource is considerably inimitable. Obviously, Netflix is doing a great job in regards to quick delivery. It has promised its customer to ship DVDs anywhere within 1 business day. Today, by effectively employing the distribution network system, the company leveraged its capability to reach 98% of its subscribers. Hence, Netflix is organized properly to capture the value of their distribution centers. It is worth noting that although this resource gives them an sustainable competitive advantage, the demand on this type of service (DVDs sent by mail) is on a continuous decline, and the service might completely vanish in the next few years. L ast but not least, Netflix’s CEO, President and co-founder Reed Hastings is considered one of the firm’s most valuable resources. In the most difficult times, this innovative and visionary man knew what he was doing and didn’t lose the focus. His vision was very clear since the very beginning back in 1997 when he named the company Net-flix and not DVD-by-Mail (Fortune, 2009); he saw what the industry will be like in the future and believed in the powers of the internet. an intangible asset, as we are interested in his vision, education, expertise, know-how’s, innovation and skills, is considered a valuable one. If you take a quick glance on what has happened in the past few years, you’ll find it clear how such influential people affect their organizations in every aspect. For example, when Steve Jobs died, Apple’s  stock price went down by 5% immediately (Kollewe,2011) which shows you how people believed that the tremendous success Apple had in the past few years was directly linked to the innovative out-of-the-box thinking of their ex-CEO, and future manifestations showed that that was extremely true. So these brilliant executives are so valuable to their firms and they are also rare. Blockbuster’s ex-CEO Jim Keyes had the chance to buy Netflix in year 2000 for as little as 50 million dollars (now it’s worth more than 20 billion dollars!), but he was so arrogant and refused to give any recognition for Netflix’s success claiming his firm can easily do anything Netflix does. (Zarafshar, 2013) Failing to see the opportunities, combined with many wrong asse ssments of the external environment led to the bankruptcy of Blockbuster in 2011. Many analysts were actually quite sure that Netflix will be sold after the 2011 missteps that caused the stock price to fall by about 80% ; however, at that same exact time Reed Hastings was confident and quite sure that Netflix â€Å"will not only survive but flourish† (Morrissey, 2013). Those same analysts didn’t see, at that time, anything of a value in Netflix other than its CEO, who previously one the â€Å"CEO of the year 2010† award (Hartung, 2013) and whom they had great respect for (Morrissey, 2013); and indeed he was able to turn on his company and return it back to the list of the most successful companies in the world and the stock prices went up by more than 700% between 2011 and 2014! (Google Finance, 2014) In an interview, Hastings clarified that he doesn’t see his firm just competing with the other companies in the media-entertainment industry, but he believes to be competing with all companies that offer any kind of product or service that a person can enjoy during his leisure time, whether it is a soccer match, a newspaper, a video game or even hiking with friends or family (Netflix Investor Relations, 2014). This gives you an idea of the high mindset of this man which explains the success his company is now enjoying. Such a reso urce is hard to imitate as they usually come through the hierarchy of the same company; that’s what explains their full understanding of the industry they’re working in and the core competences of their firms. Just moving one brilliant CEO from one company to your company doesn’t guarantee you any success at all since many complex factors take action in the whole mix-up. Proceeding from here, it is obvious that this resource is organized to capture value for the firm. By setting the  strategies and adjusting them whenever and wherever needed depending on the ever-changing environment, Mr. Hastings is the captain who controls the helm to take Netflix to the island of success. Therefore, this resource gives Netflix a sustainable competitive advantage as long as he’s on the helm. In the future, will Netflix face the same difficulties Apple faced after their CEO was deceased? RESOURCE Valuable Rare Inimitable Is the company organized to capture the value of the resource? Competitive Potential Big Selection of Titles YES YES NO YES Sustainable/Temporary CA Title Recommendation Software YES YES NO YES Sustainable/Temporary CA Nationwide Distribution Network YES YES YES YES Sustainable Competitive Advantage CEO Reed Hastings YES YES YES YES Sustainable Competitive Advantage Table : Conducting VRIO analysis on Netflix top resources Netflix’s Competitive Strength The Netflix Strategy Netflix’s strategy so far hasn’t been to just focus on one or two aspects of their customer base, but to focus themselves in a number of directions in order to build upon and capitalize on a growing subscriber base. Their main strategy has been to build and maintain the most comprehensive selection of DVD titles in the industry, and they have done so by creating mutually beneficial relationships with a number of entertainment video providers. Their second main strategy has been focused on service differentiation- not only how customers receive content and consume it, but also how customers choose what to watch. Netflix’s number one competitive advantage over Amazon and Blockbuster is their unique software that takes what a customer has seen or rated, and based upon that information builds a list of suggested titles similar to ones they have just watched. While other companies had begun to leak into the rent-by-mail niche category that Netflix had started, no othe r company had customer profiling software quite like Netflix. Between 2006 and 2009, the film rental market underwent a major shift. The in-store rental market declined, while vending machine rentals increased and by-mail rentals nearly doubled. However, VOD (Video on Demand) services through cable, digital, and subscription also saw major increases. All of these changes meant companies like Blockbuster had to either restructure and make a complete business model shift – or face bankruptcy. Meanwhile, the increases in by-mail rentals and online subscriptions, two services that Netflix offered, meant that the number of Netflix subscribers more than doubled in that same time frame. Purchase decisions from customers were focused on convenient access, price, variety of DVD offerings, and ease of return/return fees. Customers like variety; a video rental store that only stocks the newest releases will not appeal to all markets. Increasingly, customers are becoming more nostalgic in their movie preferences, searching for titles long past premiere. Customers have also become increasingly busy, often not having the time to go to a store to pick out a movie or remembering to return their rentals on time. We live in a world of instant gratification, where being able to click a few buttons and watch the latest  movie or an old clas sic is extremely important. Customers also do not like fees. More and more companies today are offering free shipping/return shipping, and the same is true in the DVD rental industry. Netflix’s third main strategy was to attract more subscribers using multiple marketing channels including online advertising, radio stations, regional and national television, direct mail, and print ads. One of these marketing strategies included participating in a variety of cooperative advertising programs with studios through which Netflix received cash for featuring a studio’s movies in its advertising. Moreover, Netflix worked closely with the makers of Netflix-ready electronics devices to expand the number of devices on which Netflix subscribers could view Netflix-streamed content (Thompson, 2012). This is considered Netflix’s second competitive advantage because it got ahead competitors by being the first to market with next-generation products. By 2012, with the aid of new technology, Netflix added another core strategy which was to grow its streaming subscription business domestically and globally. By doing so, executives expected that the number of members with DVD-by mail subscription would decline, as subscribers migrated from renting DVDs to streaming online and as subscribers with both DVD-by mail and streaming subscriptions opted to only streaming online. The company continuously improved its streaming experience by expanding the size of its content library, increasing the number of Internet-connected devices, and improving the ease of navigating Netflix’s w ebsite of locating and selecting content to watch. The result was a rapid growing customer acceptance and interest in the delivery of TV shows and movies directly over the Internet. Finally, a central element of Netflix’s long-term strategy was making Netflix’s streaming service available outside the US, in countries like Canada, Latin America, the UK and Ireland. (Thompson, 2012) Although this international expansion was expected to temporarily depress the company’s overall profitability and incur huge expenses of obtaining licenses from movie studios and owners of TV shows, Netflix’s entry into such markets would launch a preemptive strike to secure an advantageous position of being market leaders with high-quality suppliers via exclusive partnerships or long-term contracts (Thompson, Peteraf, Gamble, Strickland, 2014). â€Å"We have to win the bidding for a big set of content, and then market ourselves effectively to start the membership growth† (Seave, 2013). How  long it takes for such a bold move to yield good results was not a major issue because Reed Hastings indicated that Netflix would take longer than eight quarter s after initial entry to reach sustained profitability. How Does Its Competitive Strength Compare Against That of Blockbuster and Amazon Compared with Blockbuster and Amazon, Netflix operates within the highly competitive media streaming market that has been forecasted to increase to $12.5 billion in 2017 (Bauman, Deal, Ishak, & Johnson, 2013). Netflix by far has the most comprehensive number of products and distribution channels, given that consumers can either rent DVDs by mail or stream them on their PC or TV. Its identity is valued greatly among consumers as a quick, easy, and available destination for streaming media. Additionally, the value of their brand has risen recently after the strong media attention for the success of its first original series, House of Cards. When it comes to competitors, Netflix’s main competitors were Amazon and Blockbuster. Operating as Amazon Prime Instant Video, it has three main advantages over Netflix; it offers subscription as a prime member for $79 a year which is $6.59/month, less than Netfl ix’s streaming price of $7.99/month, subscribers get free 2-day shipping on millions of items and its users can buy or rent a movie/show just after a few hours of it being broadcasted on TV, while Netflix subscribers needed to wait a few months in order to view the same movie or show (McGrath,2014). However, Netflix’s competitive advantage over Amazon is its library which has more variety and includes original content, thus making their library comprehensive in the streaming market. They also offer all their content to their subscribers for streaming through a very user friendly personalized interface and effective recommendation system that boosts the watching experience; in comparison, Amazon’s Prime Instant Video library have less categories and less straightforward search results, plus a significant portion of their online content cannot be streamed for free, you have to pay additional money to watch certain shows or movies. (Honorof, 2014) Blockbuster’s strategy was to keep expanding geographically by opening new stores in different locations, rather than switching to online streaming, thinking it would increase their market share. But due to the rise in competition from Netflix and Amazon, the company filed for bankruptcy in 2010 and in January of 2014 they permanently closed all their stores and only operated through â€Å"Blockbuster On Demand† on a pay per rental  bases and operated only in the US (Netflix Alternative, 2013). The competitive advantage Netflix had over Blockbuster is the number of titles they offered. Because Netflix did not operate from a physical store, it made it possible to store thousands of titles, both old movies and movies which were on high demand, and thus satisfying the preferences of much more customers than Blockbuster. Blockbuster was restricted in the amount and titles they had to offer in their stores because of its limited storage space. Another advantage was convenience. Netflix made it very convenient for customers to get their DVDs without having to leave the house and having unlimited videos on a subscription basis without late fees, all of which are things Blockbuster lacked. With all this said, it is obvious that Netflix used offensive strategies that helped it build its reputation as a market leader and created a strong brand loyalty by binding customers to its service. As a first mover, Netflix was able to move down the learning curve ahead of rivals, so it now knows exactly what customers are expecting and learned a hard lesson not to do sudden strategic changes as it did in 2011 missteps of price changes and split of service. As a first mover also, Netflix was able to set the technical standard for the industry by adopting the advanced streaming player and recommendation program that customers now can’t imagine accessing huge movie libraries without it, and Netflix is ahead of its rivals in this and it’s building it over time. Back in its early stage of existence, Netflix had no chance to compete traditionally with the giant Blockbuster, so it chose a special kind of offensive strategy called â€Å"The Blue-Ocean Strategy† which dictates that a firm can â€Å"gain a dramatic and durable competitive advantage by abandoning efforts to beat out competitors in existing markets and instead inventing a new industry or distinctive market segment that renders existing competitors largely irrelevant and allows a company to create and capture altogether new demand† (Thompson, Peteraf, Gamble, Strickland, 2014) This is exactly what Netflix did as it didn’t go into the block and mortar business but focused from the very beginning on growing its online library and achieving its most important strategy back then which is to deliver DVDs by mail within one business day. This created a new segment of customers for its service and factors in the external environment started changing to its advantage wh ich shows that Hastings and his team where correct in reading their external  environment. Then in 2007 they started their streaming service which is also an offensive strategy that positioned Netflix far ahead of its competitors. Recommendations The past few years have shown how volatile the stock price of Netflix was as it fluctuated between as low as 53 dollars in 2012 to as high as 448 dollars in March 2014 (Google Finance, 2014). This is an indication that Netflix is operating in a very fast moving industry where innovation and continuous improvement are the keys for survival. Consequently, as professional consultants, we advise Netflix executives to learn from what has happened in the past and put new strategies or amend existing ones to tackle the future probable recurrence of the problems they have faced in the past few years. One of the major competitive advantages of Netflix over its rivals in the industry is having this huge and varied collection of title selections in its offering. First we advise them to convert all their DVD-version content, which is not available for streaming, to soft stream-able versions as statistics showed more customers are leaving the DVD-by-mail plan and registering for the more convenie nt trendy streaming service (Roettgers, 2013). Maintaining an increasing selection of title offering is vital in this respect, as in such an entertainment industry, we don’t see loyalty in customers as decreed by Marketing gurus; what we mean by this is, if another rival had a similar service with a richer content, many customers will switch with the blink of an eye. That’s why we are stressing on this point as it is a key for survival. Accordingly, Netflix should opt to create strategic alliances and cooperative partnerships with many movie studios to maintain its database of titles – retaining existing ones and adding new collections, and negotiating to reduce the wait time for streaming movies after they are out in the theaters. This will definitely create value to the customers, but Netflix’s harder job is how to create value for those suppliers, that is, how to convince them to add their productions in the Netflix service. This can be done by creating a win-win model that will persuade those studios to choose Netflix over other rivals, and hence can be achieved by highlighting a set of advantages they’ll get from the deal. An example of such an advantage, is to have the studio’s work available not only in US, but in all the 41 countries Netflix currently operates in, and  maybe make it available in local languages; this will increase the popularity of the studio’s work inter nationally and will basically mean more profits for future project releases. Catching up from this last point, it is vital for Netflix to find new smart ways to continuously increase their subscription base. By the end of Q1 2014, the number of subscribers went up to 33 million US subscribers and 11 million international subscribers (Welch, 2014). More subscribers simply mean more annual income which will lead to the ability to get richer content to their offering, which will in return link more customers in. This recursive cycle is so prominent and can be triggered by some smart tactics, to initially get more customers. Lowering the subscription price might lure many potential customers to register, but is not advisable to do that since the profit margin of the streaming service is already narrow (Roettgers, 2013). On the other hand, increasing the price of subscriptions is also risky and the crazy chaos that happened in 2011 will remain unforgettable. Hence, Netflix executives should devise new innovative ways to increase the value proposition of their service that will increase their customer base and enhance their reputation as a market leader. This can be achieved, for example, by doing the exact opposite of what they did in their 2011 missteps. What happened back then was to increase the price of their service for the sa me quality they offered; so let’s now try to increase the service quality holding the price fixed. One way of doing that, is to diversify their content; for example to start providing Live programs such as Sports events and News. This addition will get-in new customer segments – not only those who love to watch movies and TV series. So, if Netflix was able to secure the online broadcasting rights for a major soccer league matches, for example, and broadcasting Live CNN news, their customer base will be more fragmented and they will be moving in the direction of being an Internet TV provider with a variety of shows that suites all the different categories of viewers. Another technique to increase the quality of their service is to enhance their GUI (graphical user interface) by creating a new advanced online player for streaming media that can detect voice commands sent from the embedded microphone of the client’s personal gadget (laptop, Smartphone, tablet, etc†¦), analyze those commands and perform actions accordingly. For instance, â€Å"Volume Up† to increase player’s sound volume instead of using  your laptop’s mouse or going to â€Å"Settings† on your Smartphone/iPad; or the voice command â€Å"Action Category† to go to the list of movies in the Action category. Adding such a high-tech innovative feature in their player will amaze their happy customers and will leave their competitors contemplating in the shadows. Netflix can also enhance its online service by continuously challenging and rewarding bright programmers to come up with new algorithms that increase the effectiveness of their rati ng application. What they did with their one-million-dollar contest, which was won in 2009 by a team called BellKor’s Pragmatic Chao who were able to come up with an algorithm that overcame Netflix’s recommendation system by more than 10% (Netflix Prize, 2009), was very tidy and it really paid off; so they need to continue upgrading their systems – as it goes side-by-side with the ever increasing size of their database. Speaking about the content, it was very clear that the bargaining power of the suppliers, which are the TV shows producers and movie studios, are becoming increasingly high; and what happened with the Starz Entertainment deal is one example to mention here, when it announced it would remove it movies from Netflix streaming starting February 2012 (Young,2011). This leads us to what we believe is the most important recommendation for Netflix to consider, that is, invest more in original content. Going backward to the recursive cycle we previously explained, it is clear that getting new content goes in parallel with increasing the number of subscribers. For example, when Netflix secured the deal with Disney for exclusive rights to stream its movies starting 2016, many analysts assumed that the firm needs to get 4 million new subscribers to just breakeven with the cost of that deal (Morrissey,2013). One here might contemplate, that sooner or later, Netflix will reach a stage where it wil l cease to be able to increase its customer base, so its revenues will reach a kind of a slow moving ceiling, but their content obligations will continue to rise: to maintain the licenses for the current collection and to get new content in. Many movie studios are closely monitoring Netflix’s performance and stock prices, and they are demanding higher money for renewing their contracts, and this is a major threat for Netflix to consider. Unable to reach a renewal agreement with a major movie studio, will result in the disappearance of hundreds or  thousands of titles from their online library in a fortnight. This will really embarrass the customers. That’s why we recommend that Netflix needs to heavily invest in original programming before they reach the saturation stage, or a deadlock situation whereby they cannot enhance their content because it’s too costly and they need more money by growing membership, and they cannot grow membership because they aren’t able to enhance their content because it’s too costly! Reaching this stage means the firm is approaching its last days. The solution for this misery, and to avoid this tragic end, is to invest in original content right away. Netflix started distributing premier programs in 2011 and now has more than 10 exclusive TV shows in its offering (Wikipedia, 2014), one of which is â€Å"House of Cards† – an America political dram a television series – which â€Å"became the first TV series to win a primetime Emmy Award without ever broadcasting on a network or cable channel† (Neal, 2014). The success of the series encouraged Netflix to produce a second season of it in Feb 2014, and a third season is scheduled in early 2015 (Wikipedia, 2014). According to a study (Popper, 2014), one episode of such original content costs Netflix four million dollars; but although this is very expensive, allocating an important portion of the budget every year to produce such exclusive series will have its mark in the future. People can enjoy watching such series any time, as it is a permanent title in the online library, and Netflix doesn’t have to pay licensing or any other kind of expenses on originals once it is broadcasted. They can also make it available for their international customers by adding local language features (subbing or dubbing) to it. Growing internationally is still one of the main strategies that Netflix is counting on and although international expansion proved to be very costly, as Canada for example broke even after 2 years (Netflix Investor Relations, 2014); they are recommended to continue with it. It will give them more international recognition that will enhance their reputation and will pay off in their competition with rivals, and this is exactly what CEO Reed Hastings said in Netflix Q4 2013 Earnings Interview â€Å" we are treating international as a segment – for competitive reasons† (Netflix Investor Relations, 2014). As first movers in the streaming movie industry, it is advisable for Netflix to leverage their position as pioneers of the market by offering several loyalty programs that will increase the switching cost  of the customers to their existing and future rivals. One thing they can do is to create a points-based reward system which works as follows: every month you renew your subscription you’ll add 10 points to your balance, and if you’re a new customer you get 50 â€Å"free welcome points†. Then through time your balance will keep adding up points and you’ll have the choice to buy several valuable things with it. For example, one-month free subscription for 100 points, an original DVD movie (from a predefined list of titles) sent directly to your mail and that will cost you 200 points, and the chance to meet with the actors of your favorite TV-series (Netflix Original) for 300 points. Such a loyalty program will keep delight the customers and keep them hooked to the service. While many consumers have cut the cord and made the switch to Internet-only TV offerings, undoubtedly they’ve experienced frustrations as well. Netflix’s mobile app, while good, can be upgraded to present a much better and more seamless experience for those on tablets. We suggest added-value features like friendship connections, including the ability to see what friends on both Facebook and Twitter have watched, their recommendations, and share content with others. Another impre ssive change could be a ‘tagging feature’ when watching shows which we believe to be instrumental in expanding the social aspects of Netflix’s content. Viewers can tap the button at any time during a show to tag moments on the timeline relevant with quotes from the scene or make a comment regarding what they saw. Subsequent friends watching the content can see these tags, opening up dialogue between the partners and encouraging more social conversation through Netflix’s app. (The lab Blog, 2013). Compared to the current app’s design, this new proposal feels fresh and clean. Of course, those added features are optional and can be switched off whenever privacy is needed. By adding this feature, Netflix will be leveraging the benefits of the latest VPPA (Video Privacy Protection Act) law amendments President Obama signed which â€Å"facilitate social media sharing of video viewing preferences when users consent to disclosure of information via the Internet†.(McClellan, 2013) Moreover, integrating social media with customers’ viewing experience will give Netflix an important marketing tool that will help them detect which content is more appealing to their customers and will also give their customers a window to speak out what they like to see in the future. Finally we can say that the next step for Netflix  is to produce a Hollywood 100-million dollar movie that can be streamed same day it goes into the theater. This massive step of producing one movie eve ry year, of such a caliber, will be a major boost for Netflix in the coming years especially if they were lucky enough and those movies turn out to be a major hit. But here one has to say, is it wise for a company like Netflix, that reported 112 million dollars in net income by the end of 2013 (Google Finance,2014), to handle a project of this size? Isn’t it a crazy adventure? Or should Netflix go through a joint venture with other Pay-TV firms to reduce the risks of such a gigantic project? References Bauman, L., Deal, N., Ishak, P., & Johnson, S. (2013, February 3). Netflix Environmental Scan / SWOT Analysis. Retrieved April 22, 2013, from Memoirs of a Student: http://lisabauman.blogspot.com/2013/02/netflix–?environmental–?scan–?swot–?analysis.html Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland III, A. J. (2014). Crafting and Executing Strategy – The Quest for Competitive Advantage – Concepts and Cases (19th Ed.). New York, NY: McGraw-Hill/Irwin – Ch:6, pgs. 151-152 Thompson (2012) – Netflix in 2012: Can It Recover from Its strategy Missteps? Thompson, A. A. (2012). Netflix Alternative (July,2013) Blockbuster on Demand – Retrieved from: http://www.netflixalternative.com/blockbuster-on-demand/ McGrath (Jan, 2014) Amazon and Hulu Could Slow Netflix Growth in 2014 – Retrieved From: http://www.forbes.com/sites/maggiemcgrath/2014/01/07/amazon-and-hulu-could-slow-netflix-growth-in-2014-morgan-stanley-sa ys/ (Seave, 2013) Netflix to Competitors: Be Afraid, Be Very Afraid – Retrieved from: http://www.forbes.com/sites/avaseave/2013/06/06/netflix-to-competitors-be-afraid-be-very-afraid/ NetflixPR – Netflix Media Center – Company overview – Retrieved April 19,2014 from https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?contentGroupId=10476&contentGroup=Company+Facts Kollewe (October,2011) Apple Stock Price Falls on News of Steve Job’s Death – Retrieved from http://www.theguardian.com/technology/2011/oct/06/apple-stock-steve-jobs Zarafshar (Nov,2013) Remembering Blockbuster Retrieved from http://deweydigest.com/tech/2547 Cantisano (April,2014) Netflix loses Fox

Advancing Physical And Psychological Conditions Of The Work Environments

Agenda Item A ;Occupational Safety And Health ; Advancing Physical And Psychological Conditions Of The Work Environments Working in a safe and healthy environment is among the cardinal human rights of all working people in the World. In this respect, occupational safety and wellness issues, protection schemes every bit good as national and international events are of critical importance for employees, endeavors, societies and economic systems.Occupational Safety and Health is straight related to human life. Therefore, it is extremely of import to forestall work-related jeopardies and making safe workplace for the international community. In a on the job topographic point where comprehensive protective and preventative schemes have been developed, figure of work related accident and occupational diseases will diminish. Therefore, purpose should be minimise unintended jeopardies. These workplace jeopardies can be named as followerss ; Physical and mechanical jeopardies, Biological and chemical jeopardies, Psychosocial jeopardies. Especially workers who work on the Fieldss of building, agribusiness, servi ce and Mining and oil & A ; gas extraction sector, have much inclinations to meet with these jeopardiesInternational Organizations such as InternatAÂ ±onal Labour Organization, World Health Organizations and United Nations etc. have been working to progress the conditions of work environments by coercing conventions and Acts of the Apostless. Since it’s constitution ILO has attached specific importance to the issue of OHS and regarded it as one of the edifice rocks in accomplishing societal justness. The ILO has so far adopted a series of conventions and recommendations in order to extinguish hazards and jeopardies in working life and in this context, to protect both workers and endeavors. The most relevant ILO Conventions sing OHS are No.155 on OSH, No.161 on Occupational Health Services, No 81 on Labour Inspection and No.187 on the Promotional Framework for Occupational Safety and Health. The ILO Constitution sets rules that workers should be protected from illness, diseas e and hurt originating from their employment. Yet for 1000000s of workers, the world is really different. Some two million people die every twelvemonth from work-related accidents and diseases. An estimated 160 million people suffer from work-related diseases, and there are an estimated 270 million fatal and non-fatal work-related accidents per twelvemonth. Harmonizing to latest ILO information every twelvemonth 337 million people fall victim to work accidents. El Salvador’s economic system was preponderantly agricultural until industry quickly expanded in the sixtiess and ’70s. Despite its traditional concentration on agribusiness, after that epoch province industrialized rapidly and although it’s the smallest state in Central America geographically, El Salvador had the 3rd largest economic system in the part. This sudden alteration caught province unbalanced about workers’ protection so that Occupational Health and Safety measurings hadn’t been taken so far decently. Because of the fact that a big portion of the population was engaged in risky activities such as agribusiness, deceases and hurts took a peculiarly heavy toll. With Mauricio Funesgovernment, El Salvador made some legislative agreements in order to run into the demands of labor market. Being and continuity of the balance in working life and good existences of workers at work depend on back uping nice work and increasing registered employment. The Ministry of Labour and Social Prevision in cooperation with related ministries and representatives of work force played the cardinal function in bettering occupational wellness and safety in the state. To find the prevalence and nature of occupational hurts among workers in Latin America, every bit good as to place factors that predict these work-related hurts, El Salvador participated in a joint plan with other Latin America provinces. With this construct, II Hemispheric Workshop on Occupational Health and Safety was initiated by the Ministry of Labor and Social Prevision of El Salvador. It was co-organized by the Department of Social Development and Employment of the Organization of American States ( OAS ) , the Pan-American Health Organization ( PAHO ) , the International Labor Organization ( ILO ) and FUNDACERSSO, and it was funded by the Labor Program of Human Resources and Skills Development Canada. Yet, kids workers are still the chief job on the field of OHS. Between 5,000 and 30,000 Salvadoran kids, some every bit immature as 8 old ages old, are working in El Salvador ‘s sugar cane plantations where hurts, peculiarly terrible cuts and cuts, are common, harmonizing to theHuman Rights Watch ( HRW ) study even tough Salvadoran jurisprudence indicated that 18 is the minimal age for unsafe work. For a long clip guaranting widespread consciousness on OSH has been the chief aim for El Salvador. El Salvadoran authorities puts a great attempts to diminish work-related hurts and causalities. Programs, to accomplish this thought, have been developed really late and some of them are still ongoing. Harmonizing to us, progressing multidimensional conditions of workplaces would be accelerated by manner of back uping attempts on these issues at national and international platforms by sharing patterns via international plans and events. Agenda Item B ;Elimination of Discrimination in Workplaces Discrimination is a negative judgement toward a individual ‘s gender, age, faith, race, nationality, sexual penchant or tallness and is a immense job that can be found worldwide inside and outside of the workplace. On history of the fact that a big figure of authoritiess base on ballss Torahs that make favoritism illegal, employers must follow these Torahs when engaging employees and employees must move in these law’s model. But even with regulations in topographic point, many people still fall victim to favoritism at workplaces. There have been legion legislative motions to censor discrimination’s every form. One of the most of import act was Civil Rights of Act 1964 which outlawed and prohibited favoritism by covered employers on the footing of race, colour, faith, sex or national. International organisations such as International Labour Organization and United Nations have been puting their dockets by sing favoritism, particularly favoritism in workplaces. While everyone is a possible victim ; adult females, LGBT’s, cultural minorities, migrators, individuals with disablements constitute bulk of favoritism victims in workplaces. As a protagonist of this statement, Human Development Report in 2011 revealed that 52 per centum of non-Hispanic Whites expressed anti Hispanic attitudes towards their colleagues in U.S. Deriving independency from Spain in 1821, El Salvador’s more recent history has been marked by a acrimonious civil war in the 1980s which left more than 75,000 people dead and 500,000 displaced. The state was so hit by a series of natural catastrophes in the 1990s and 2000s, which left more than a million people stateless. These happenings made the province impotent and unstabilized. Therefore, Salvadoran governments have non adopted the findings and recommendations made by UN and ILO organic structures in the field of favoritism in workplaces between those old ages decently. But after 2000 to show, El Salvador has shown an unbelievable betterment to censor all signifiers of favoritism, particularly during presidential term of Carlos Mauricio Funes Cartagena. As a first measure on this country on August 19, 1981, El Salvador ratified the Convention on the Elimination of all Forms of Discrimination against Women ( CEDAW ) , which defines favoritism and establishes an docket for national action to stop such favoritism. In 1996, prior to the Committee ‘s reappraisal of El Salvador ‘s conformity with CEDAW, the authorities of El Salvador established the Institute for Development of Women. The Institute seeks to guarantee that action programs created by the authorities to protect adult females are implemented efficaciously. Yet these amendments were non plenty. Althoughwomen in El Salvador enjoy equal protection under the jurisprudence, they were frequently at a disadvantage relation to their male opposite number harmonizing to Convention on the Elimination of All Forms of Discrimination against Women in 2001.Also as indicated in Human Development Report the female labour force engagement rate in El Salvador was 45.9 per centum, co mpared to the male rate of 76.7 per centum. Lesbian, homosexual, bisexual, and transgender ( LGBT ) individuals inEl Salvadorhad been confronting legal challenges in workplaces. No national jurisprudence does be to forbid favoritism on the footing of sexual orientation, although the jurisprudence prohibited favoritism on the footing of HIV/AIDS position, in pattern, favoritism was widespread. All in all, there was favoritism against adult females, individuals with disablements, sapphic, homosexual, bisexual, and transgender individuals, and autochthonal people at workplace and there weren’t equal commissariats or codifications to extinguish favoritism. When calendars showed 2001, El Salvadoran President and his authorities started to take stairss to anticipate any legal or constitutional challenges to decide the jobs highlighted in a UN general assembly study on favoritism at workplaces. Besides ensured those rights would beef up the fundamental law of El Salvador. The Secretariat for Social Inclusion, created in June 2009 by President Funes, who named the first lady Vanda Pignato as secretary, made attempts to get the better of traditional prejudice in all these countries. The fundamental law provided for the right of workers. In 2009 the authorities amended the fundamental law to allow legal position to public worker brotherhoods. The jurisprudence established sentences of one to three old ages in prison to individual who discriminate in the workplace. There were no authorities plans dedicated to battling favoritism but now The Vida Digna ( Life with Dignity ) plan has been adopted to El Salvador to contend against favoritism bas ed on HIV. Besides on the footing of sexual orientation, in pattern favoritism was widespread, particularly against transgender individuals. In January the new disposal approved the legal enrollment application filed in August 2009 by the homosexual rights NGO Entre Amigos. This is the first NGO focused on sexual minorities registered by the authorities whose primary declared work was other than the bar of HIV/AIDS. Although it’s considerable headroom, El Salvador will non be satisfied with this agreements and for certain, countenances and ordinances will better bit by bit to make international standards. As clearly seen favoritism in workplaces is widespread in many states. In our sentiment, such systematic homo rights misdemeanors can merely be deterred by the humanly will of authoritiess, employers and employees in taking resolute action against people who discriminate at all degrees.