Concept explainers
a)
Case summary:
Company B was the leader of the market in the 1980s and 1990s. It allows the customers to rent a movie. Person H started Company N in 1997 after he paid the late fee to Company B for the broken cassette. In Company N, people can order the movies over the internet and receive the movies through the mail and they can even return the movie through the mail. Having an unlimited due date and no late fee is one of the powerful technique followed in Company N.
Even though they started a business with the innovative business model, they incurred a loss with only 300,000 subscribers. However, due to the continued improvement, Company B went bankruptcy and Company N strengthened. In 2016, revenue of Company N increased by 47% despite many competitors.
To determine: Whether Company N follow a more gradual international expansion.
b)
Case summary:
Company B was the leader of the market in the 1980s and 1990s. It allows the customers to rent a movie. Person H started Company N in 1997 after he paid the late fee to Company B for the broken cassette. In Company N, people can order the movies over the internet and receive the movies through the mail and they can even return the movie through the mail. Having an unlimited due date and no late fee is one of the powerful technique followed in Company N.
Even though they started a business with the innovative business model, they incurred a loss with only 300,000 subscribers. However, due to the continued improvement, Company B went bankruptcy and Company N strengthened. In 2016, revenue of Company N increased by 47% despite many competitors.
To determine: The challenges that Company N need to encounter internationally.
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