Chapter 5 Lecture 14 Netflix Business Model & Pay for Service Discussion

  1. DQ3 (Ch5). Identify a “bricks and clicks” or “pure play” organization. Discuss its business model(s) and revenue models(s).

Note:

  • Begin your discussion with the name of the organization and state whether it is a “bricks and clicks” or a “pure play” organization. (1 point) Also state whether it belongs to B2B, B2C, and/or C2C. (1 point)
  • Discuss the organization’s business model(s) (4 points) and revenue models(s) (4 points) in separate paragraphs, respectively.
  • Make sure to explicitly identify the organization’s business model(s) and revenue model(s) first, then discuss each in 3-4 sentences.
  • You may need to do some research online to find out what business model(s) and revenue model(s) the organization adopts. Cite the sources if you use information from online.
  • Make sure you do not repeat any organization that appears in Lecture 14 slide 6 “eCommerce Business Models and Revenue Models”.
  • Make sure you do not repeat any organization that has been discussed by your classmates.

After creating your initial post (10 points), return to the board and read over the posts of your fellow classmates. Choose at least one classmate and create a post responding to his/her initial post on the Discussion Board (5 points).

The classmate post is: (you can replies to any one you like). and use their post as an example for you : below

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For your second post, which replies to a classmate’s initial post, you can do things such as (but are not limited to):

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Write about what you learned from the post Share your opinions that are similar/different from the ones in the post Ask follow up or clarification questions Connect the questions and/or replies to your own experience or to what is in the textbook and/or lecture

How Discussion Question Posts Will Be Evaluated

-3- A response of “I agree”, “This is a good point”, a reiteration of other students’ posts, or a post that is not related to the subject at hand will not count as a required post. Your post will be graded on:

      

Completeness and thoroughness of answers Clarity of thought and organization of ideas Demonstration of knowledge gained from the course material Compliance with format requirements Timeliness: late or missed submissions will not receive any credit.

You should cite any quotes, references, and sources Personal attacks are not permitted. You can criticize ideas but not individuals. You should be open to positive criticism and try not to take it personally

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1–Natalia

The organization I chose to do a business model/revenue model analysis on is Simon and Schuster. S&S is a book publishing company that is a pure play organization. It mostly sells its products to businesses and governments, but also directly to consumers through its online platform.

A business model defines the way a company creates value, makes revenue and also how it achieves its vision. Everything that business does for its customers is a part of the business model of the organization. S&S business model is a mixture of Content Provider as it “develops and publishes content” (Piccoli & Pigni) and a Manufacturer as it manufactures its own and other publishing houses books. S&S owns all the content that it publishes and can use it not just to print physical books or create ebooks/audio books, but also sell it to be used in movie productions or to be cited in other publications. Traditionally, S&S only sold to businesses and governments, but with the emergence of the Internet, it now also sells to customers through pimsleur.com and simonandschuster.com web sites.

As for the revenue model, S&S belongs to Pay for Service model and more recently to a Subscription model as well. In more detail, S&S sells physical books or content and receives a compensation for it. One of the divisions of S&S is Pimsleur Language Programs, which produces language learning courses that can be purchased on CDs, downloaded on PCs or mobile devices, and subscribed to.

2-Meshari

The organization that I chose is Nike. It considers bricks and clicks, which has physical operation and location and also digital retail services that offer in bricks and mortar stores. It includes smart lockers and Nike Plus members. Nike is both B2B and B2C. Nike focuses more on selling the products and services directly to other businesses and also sell the products and services to the consumer for personal use. Nike has different business models that generate revenue from it. First of all, Nike focuses on design and development to maintain its leadership position. They try to invest in a partnership, so that helps them leading to innovative technology. For example, Nike has innovative products such as Air, Lunar, and Zoom. Also, they concentrate on contract manufacturing that does not own by Nike. For instance, all footwear and apparel products manufacture outside the US. That will help them to minimize their price and reduce their inventory.

On the other hand, Nike generates its revenue model by directly selling to customers or thorough dealers. They belong to pay for service and subscription models. Nike is selling directly through its stores, online sales, and Nike factory stores. They also reach their customers by the dealer network, which includes footwear stores, sporting stores, and athletic specialty stores, etc. With regard to subscription model, Nike has a subscription for kids called Nike Adventure Club, which allows parents to order shoes for their kids age 2 to 10 and pays fees either on a quarterly, bimonthly, or monthly basis.

In conclusion, Nike has business models such as footwear, apparel, and equipment that generates its revenue by using pay for service and subscription models.

3-Shannon

I have chosen Kohl’s as my company of choice for this exercise. Kohl’s is a “bricks and clicks” organization and belongs in the B2C sector of commerce. Kohl’s has a very successful “physical” retail presence throughout the country, however, they also have a very successful e-commerce presence where they offer a website and a mobile app for consumer purchases.

The Kohl’s organization business model can be best described in their mission statement which is “…to be the leading family-focused, value-oriented specialty department store offering quality exclusive and national brand merchandise to the customer in an environment that is convenient, friendly, and exciting.” Kohl’s value proposition lies in that they want to offer the best retail apparel and products to their consumers at the absolute best prices. Kohl’s does this by offering very creative loyalty and discount programs in which they offer members valuable coupons and “flash sales” where they have early bird and late evening special discount sales. Their most popular incentive program “Kohl’s Cash” is where members earn specific dollar amounts towards discounts for future purchases. All of these incentive programs can be taken advantage in-store or on the Kohl’s website or mobile app.

Kohl’s revenue model is a very a straightforward Pay for Service model. Kohl’s offers products (i.e. apparel and other goods) for sale to their consumers. Their growth is based off of this model and has been since their inception by Maxwell Kohl in 1946. What makes Kohl’s super successful in this very traditional revenue model is their creative discount and marketing programs. During the holiday season, most households will receive the Kohl’s mail catalog along with coupons. On top of that, members will also receive 3-4 emails daily advising of special sales and discounts. In Q4 2019 Kohl’s revenue reached approximately $19 billion, which is indicative of how very successful they are in the Pay for Service revenue model.

References:

Digital Commerce 360. https://www.digitalcommerce360.com/2020/03/04/kohls-posts-double-digit-online-growth-for-q4/

Kohl’s Company Research report. https://kohlscompanyresearchreport.weebly.com/vision-mission–stakeholders.html

Kohl’s Wikipedia. https://en.wikipedia.org/wiki/Kohl%27s

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