The Economy Of Delta State In Nigeria Economics Essay

The Economy Of Delta State In Nigeria Economics Essay Nigerian economy, at first was based mainly on agriculture; it exported agricultural products like cocoa, rubber, palm products, cotton, groundnut, hides and skin etcetera. But then oil was discovered in the south-south of Nigeria i.e. Rivers, Bayelsa, Edo and Niger Delta states, and agric production was abandoned. The essay question is What are the economic cost and benefits of oil industry in Delta, Nigeria? The objective of this essay is to find out what the economy cost and benefits of the oil industry in Delta state, Nigeria, and also I will examine just how the state has put up with the production of oil and also the effects i.e. the cost and benefits. 1.1 State Background Delta State is named after the delta region of the River Niger. Its capital is Asaba  [1]  . It is found in the south-south areas of Nigeria. Delta state consists of different ethnic groups like Urhobo, Igbo, Ezon, Isoko and Itsekiri but consist mainly of the Igbo people.Nigeria has a population of 151, 870, 000 people of which Delta state has a population of 4, 098, 291; the males are up to 2, 674, 306 while the females are up to 2, 024, 085  [2]  . Delta state is the second oil producing state in Nigeria after Rivers State, of which this oil production tends to be the most dangerous business in this economy. The local governments that produce oil in the Delta state are Warri North and South, Burutu, Isoko North and South, Ughelli North and South, Okpe, Ethiope East and West, Sapele and Ndokwa East and West  [3]  . The biggest oil refinery is found in Warri, which is a local government in Delta. 1.2 Map showing the location of Delta state in Nigeria: 4Delta State. 1.3 Research Methodology My process of research was divided into two methods; primary research and secondary research. 1.3.1 Primary Research My primary research involved The use of a questionnaire: The questionnaire was created addressing specific questions like; what has the government put in place to help the economy? and also what has the economy benefited from the oil production? A survey was used to get more personal information like; Government share of income and income of Petroleum Company. Interview was done; I interviewed the people living in the villages, the leaders of the town/villages. Asking them what the costs and benefits has been for oil production. I also interviewed employees from the Petroleum company (SHELL) I took pictures of the benefits from the oil production. 1.3.2 Secondary Research Secondary information was gained from the various websites, textbooks and articles. The information includes: a study of economic theory relating to externalities. Textbooks were used to get definitions. The internet was used to review other information that is relating to this topic. The reason for this is to see how this state is managing with its externalities. Internet was used to get background information on the state Internet was also used to get the cost of oil production in the state Images of the cost of oil production in the villages were gotten form the internet. The use of articles in the newspapers was used to get information on the current situation Problems Proposed Solutions Interviews and with the people in villages and the leaders of villages Language barrier Finding someone to help in translating. Interview with the employees of SHELL Release of private company information Use of other sources to get information like the radio, internet, newspapers etcetera Sharing of questionnaire and survey on land Riots in these areas were questionnaires were being distributed Go to areas where there is no riot to distribute questionnaires and do a survey.1.3.3 Possible difficulties and proposed solutions. 2 PRIMARY DATA ANALYSIS The employees and few people living in Delta were given questionnaires to find out certain information, about what the oil industries and the government have done with the economy from the benefit of oil production. The questionnaire was given to 20 employees at SHELL who were randomly selected from various departments and 20 people living in the economy. This section is showing the sets of results gotten from these individuals. Table 1: Results concerning responsibility by individuals in the community Issues Number of people Government Politicians Oil Industries Who do you think is responsible for the pollution in Delta? 20 2 0 18 90% of the people living in the community believe that the oil industries are the cause of the pollution which is right, and it is good to know that only 20% believe that the government is responsible which is not true. Table 2: Results concerning responsibility by SHELL employees Issues Number of people Agree Disagree Unsure Do you think it is your responsibility to make it right? 20 10 4 6 In the above pie chart 50% of the employees at Shell think it is their responsibilty to make things right in the economy that means they sould be able to stop the pollution the oil company is causing. This illustrates that half of the people in company are taking respnsibility for their actions. Table 3: Results concerning responsibility by the individuals in the community Issues Number of people Agree Disagree Unsure Do you think it is your responsibility to make it right? 20 5 7 8 40% of the individuals in the community are not sure whose responsibility it is to stop the pollution in Delta, 35% of the individuals dont think it is their responsibility to control pollution in the economy. This illustrates that most of the people in this community could be seen as ignorant since it is a few that are ready to take some responsibility to make things right. Table 4: Results concerning government action by the individuals in the community Issues Number of people Agree Disagree Unsure Is the government doing anything about the situation? 20 5 12 3 From the pie chart it has been shown that government is not taking action from the negative externality taken place in the state which is not good. From the primary data analysis it is seen that there are some problems Delta such as pollution etc and this is due to market failure. From the economic theory it is seen that if the marginal social benefits is > the marginal social costs or vice versa there would be market failure  [5]  . Market failure is due to the positive and negative externalities in the economy. The next section in this essay is going to state those economic cost and benefits of the oil production in Delta State. 3 INDENTIFICATION OF ECONOMIC COSTS AND BENEFITS. This section will contain the analysis of the economic costs and benefits in Delta state. There are a lot of problems in Delta state such as oil spills, waste dumping and gas flaring. The main problem in Delta is the oil spillage. The type of oil produced in the south-south is deep sea oil, which causes oil spillage and then leads to pollution; air, land and water pollution, the cause of this pollution has led to the damage of soil, water and air. The oil spills has caused farmers in the area not to fish and farm again because the pollution has spread in their sea and lands, thus thousands of people have been affected especially the poor people and those who rely on traditional way of living such as fishing and agriculture. But there are not only costs in the oil production there are also benefits in the fact that the state is making a lot of money in producing oil since oil is needed in a lot of countries. Externality occurs when the production or consumption of a good or service has an effect upon a third party  [6]  . If this effect is dangerous it can therefore be called a negative externality but if the effect is advantageous it is said to be a positive externality. Negative externalities bring about external costs and positive externalities bring about external benefits. The production of oil in Delta state can bring about both external costs and external benefits. 3.1 External Costs from Oil Industries. The people in the economy have endured oil spillage for years now. Oil spills are caused by corrosion of oil pipes, poor maintenance of infrastructure, and leaks during processing at refineries.  [7]  This oil spillage usually happens on the land and in the sea. The cause of oil spills in water is that, the oil has contaminated the water, so the fishes in the sea would die that means there wouldnt be any fishing or it would become poisonous and if it is poisonous when it is eaten the people in the economy would get ill. It could also harm the plants; plants could die because of oil spills and also animals that drink from the water. Also some places in Delta are not yet developed; in those places the people that live there usually have their bath in the sea so if they do that where the water has been affected the people could get skin disease. The oil spills on land would destroy crops; damage the soil the farmers use in farming for their family. The production of oil is making th e rich to get richer and the poor to stay poor and die of poverty. Gas flaring is when gas is burnt unsteadily. Gas flaring occurs when oil is pumped from the ground, this oil burnt then produces gas and the gas produced is burnt as waste in enormous flares. Thus the burning of this gas results to the damage of the environment, especially the areas which are nearest to the oil industries. The government and the industries have done nothing to stop the people from burning the gases and also they havent given any solution to the situation. People in that area are now having health problems; there would be air pollution thus leading to people inhaling chemicals that are not good for their health and sanitation problems; there would be water pollution, chemicals from the gas flare would make water dirty, that is the water the people in the area used to take their bath is going to affect their hygiene because the water would very dirty. The people in this area do not have money for medical bills and they do not have health insurance. The farms of these p eople living in this area have been destroyed so there is no other source of getting money to pay medical bills so this leads to the increase in death rate in that area. When oil is made from the industries, waste are also produced these waste are then dumped on the land and in the sea, thus destroying the environment and weakening the peoples right in their standard of living. The government have not tried anything to stop people from disposing this waste on the land and the sea, they have not realised that the sea has been contaminated by the various mixture of the oil and if they had they would have treated their water. These chemical substances in oil are very toxic and it can affect the people living in the area. People in this areas are dying of hunger, because their farms have been destroyed so there is nowhere else to get food from, farmers are now unemployed because their plants are dying so they have nothing to plant and sell to make money, hunters are also unemployed because the animals are dying due to them drinking water from the sea or eating plants that were poisonous. The children of these hunters and farmers cannot go to school again because there is no money to pay their school fees. Poverty hits these innocent people who depend on livelihoods Due to the negative impacts on the production of oil there have been a lot of complaints by the local communities, because of these complaints it has made some people from this community to become militants. Since the production of oil has caused poverty it has led some of these militants too undergo criminal acts like stealing the oil that has been produced; militants steal this to make money out of it, and also illegal bunkering of oil; that is shipping oil illegally to another country to make money without the consent of the government. Also another cause of militancy due to the production of oil is because the government, the industries and the politicians have refused to do something about the oil spillage, the government has not done anything to develop the state practically because they are gaining from the oil production and keeping the money to themselves; the people from the economy have watched these politicians, governments and the industries get richer so this now leads the militants among them in kidnapping the rich peoples children, there are also armed robberies; these militants rob the rich, and if people are being too aggressive when they are being robbed then the militants might kill them, so this could lead to death, they also take on fights with the Nigerian security forces; this makes the security force to fight back extremely and not considering the people in that area. Militants could go into fraud also known as 419 in Nigeria, they could do business that could cheat people and by cheating them, they could get money from them. All negative things are done because of the government, the industries and the politicians ignorance to the situation. Picture below shows gas flare at Ughelli West, Delta State, Nigeria. 8 Picture below shows the militants with their guns 9 Picture below shows damage of crops because of oil spills. 10 Figure 1: Diagram showing external cost of oil production in Delta State. Price of oil Welfare loss MSC MPC Negative externality P* a p1 Q* Q2 Quantity of oil. In figure 1, it shows that the marginal private cost of the industry is lower than the marginal social costs because of the pollution that was brought about when oil was produced, this pollution might have caused breathing problems for people and also poisoned food like fish. The industry would just be concentrating on its own private costs; because of this the industry would produce at Q1. At Q* marginal social cost is equal to the marginal social benefit resulting to a market failure. Too much oil is being produced at too low a price; this causes the misallocation of the societys resources. There is welfare loss i.e. where marginal social cost is greater than marginal social benefits. There are also negative externalities of consumption i.e. the pollution that is caused and how it affects the consumers. Negative externalities would make marginal social benefits less than the marginal private benefits. Figure 2: Diagram showing negative externality of consumption. Price of oil Welfare loss MSC P1 P* MPB Negative externality MSB Q* Q1 Quantity demanded. In figure 2 it shows that the oil industry keep on producing oil, and there is still oil spillage, they pay no attention to the negative externality they are creating, Marginal social cost becomes equals to marginal private cost. There is over-use of oil from Q* to Q1, there is also a welfare loss because Marginal social cost is greater than Marginal social benefits. It is difficult to reduce this pollution. First of all the costs of pollution are external in the sense that the cost of pollution are not paid for by the agents causing it, so there is no economic incentive in the market system to cause them to stop Second of all the people benefiting from the activities; those are the people producing the oil, they are causing pollution and imposing some costs on others. So the pollution needs to be reduced although the victims are meant to be compensated. 3.2 External Benefits from Oil Industries. The oil industries may have destroyed the communities in Delta but they have also made a lot of money for the state because of the production of their oil. As it is said above Delta state is the second oil producing state after Rivers state. The economy has benefited from the oil production. The money used from the oil production has been used for the improvements of infrastructural facilities such as construction of roads, bridges and provision of pipe borne water which benefits the villagers, increased use of electricity, better transport facilities and usefulness of petroleum products. The biggest oil company in the Delta state, The Shell Petroleum Development Company (Shell), a subsidiary of Royal Dutch Shell, is the main operator on land. Shell is located in Warri. Many Nigerians specifically those from Delta state are employees of Shell, working in an oil company means that those employees would be making a lot of money this means that there would be an increase in income per capita thus an increase in urbanization that means Delta would be more developed in the standard of living. Shell has provided a lot of benefits for the economy and for the workers. Such benefits is the provision of education for the children of the employees at the shell company, provision of houses, cars and also they pay for all the bills of the employees. Shell has contributed money to the construction of new private and public schools, schools for people of low and high classes. There are also schools for the residents of the state that is for those who could not afford to go to school. This is thus increasing the literacy rate in the economy. Educational competitions are organised and also sports to promote academic and physical excellence which benefit the individuals in the state. SHELL has also benefited from its own production of oil such as increased revenue from sales; their increase in production brings about huge profits to the company. There is also an increase in development in the SHELL Company; there is now advance technology like drilling equipment in which they can use to prevent or stop the oil spills. There is also an improvement in International relations such as an increase in production which has led to an agreement with oil consuming economies such as the United States and China. The oil company shell has tried to do its best in developing the economy but because of the corruption problems in Nigeria it affects the economy. The money used for infrastructure development has been taking by the government or the politicians for their own benefits. Pipe borne water that has been installed for the villagers has broken and the government take the money that has been giving to use it to fix it. Oil spills caused by the production of oil has spoilt the road, the money contributed by the economy to fix the roads has been stolen by the government. The public schools where children are meant to be going for free the government waste time in paying teachers their salaries, so these teachers go on strike and refuse to teachers these children, thus making the literacy rate unstable. There are benefits from the production of oil, but because of corruption by the government all the benefits are not taking place. If the benefits take place, there would be positive externalities because of the oil produced. Since there are positive externalities it means that the there would be welfare gain i.e. the marginal social benefit is greater than marginal social cost. The diagram below illustrates where the welfare gain is and that is between Q1 and Q*, it also shows that oil is produced at Q1 , if the production of oil is increased to Q* more welfare would be gained. Figure 3: Diagram showing positive externality. Price Welfare gain MPC P1 MSC P* MSB Q1 Q* quantity. Picture below shows an over-head bridge in Delta. Picture below shows house of a shell employee in Delta Picture showing a factory in Delta Picture below shows one of the good roads in Delta. 4 THE FUTURE This section is going to impose ways the government can control the negative externalities in the state. There are different ways the government can control these negative externalities but first of all the government should stop being ignorant and help the economy. If government stops being ignorant they can enforce laws to control and monitor pollution in the villages; introduce more national and marine; ensure that forestry companies re-plant trees; regulate use of contaminated land. Government can impose tax on oil companies to increase the private costs, if the government should do that the Marginal private would move upwards, there might still be welfare loss but it would be less than before. There should also be subsidies that is the amount of money paid by the government to a producer, it lowers the firms cost, these subsidies could be inform of grants, reduced taxation etcetera. With the money gotten from oil production government can use it to compensate victim of the negative externalities of oil production so that victims would not sue the offending firms. The government can pay damages to victims through free health coverage. Also since oil has now taking over the agricultural production which has caused the farmers and fishermen their jobs cause of the pollution, the government should build centers where they bring in professionals to teach them skills like mechanics, welding, painting, etcetera. If government cant find professionals they can encourage companies there to teach them the skills. If the government does this there would be fewer crises because those people would no longer be unemployed and there would now be less kidnapping, armed robbery, fraud etcetera. But if the oil industry continues with its act of polluting the environment the government should control their output in some way because it will not be possible to ban, if that doesnt work out the government could make new environmental laws and if the oil industry dont follow it then they would have to pay some amount of money since they have disobeyed the law, paying the money would increase their private costs. The diagram below shows the result if the oil industry has to pay tax. Figure 4: Diagram showing negative externality. MSC Price P* welfare loss MPC + tax P2 MPC P1 Q* Q2 Q1 Quantity of oil. Firms should also be able to help, at the moment in Delta state the oil industry that is really helping in the negative externalities in the economy is SHELL. Other firms should take part in helping and do things like changing its production of its techniques and operation like economizing on the amount of waste disposal from the oil production. Changing the materials used in packaging the oil, something that can be recycled should be used that it would be used again thus prevent burning of waste disposal. If government does this for the state there would a short term effect of pollution but in long term there will be no pollution. Therefore there would be less cost on the production of oil and also an increase in economy growth. But if government takes no action there would be a long term effect of oil production, and also a decrease in economy growth and an increase in the negative externalities of the economy. In conclusion it is only the government that has the power in stopping the increase of negative externalities in the economy especially if the industries do no take action, but if government takes no action and continues taking bribes or being corrupt the economy would therefore be suffering for the costs of oil production.

Bio Medicine Essay

Two Cathy Ann Wilson-Bates Western Governors University EVIDENCE-BASED PRACTICE & APPLIED NURSING RESEARCH EBP 1 Brenda Luther, PhD, RN January 25, 2012 Task Two Introduction: What I have learned about working with children in a chronic healthcare setting like dialysis is that they are resilient beings with the propensity for rapid changes in their medical condition. Children almost always surprise me in their unique description of symptoms and pain. Depending on their age, they may not be able to describe the symptoms they feel or tell me â€Å"where it hurts†. A simple ear ache may be described as a â€Å"drum in my ear† or may be observed with non verbal cues like tugging on the ear. Acute Otitis Media is seen quite often during the cold and flu season. Recent clinical guidelines suggest waiting twenty four to seventy two hours before beginning antibiotic therapy. Parents of children with symptoms of otitis media are accustomed to receiving a prescription for antibiotics before they leave the medical office. Adults as well are preconditioned for the little white slip of paper from their physician. Waiting twenty four to seventy two hours to evaluate the need for antibiotics will definitely reduce the over-prescription of antibiotics as well as their efficacy. The waiting and watching of several days may seem like an eternity to a parent caring for a sick and crying child. Educating parents during routine visits to the physician office about the risks of over-prescribing antibiotics will help when the physician needs to discuss the possibility of waiting and evaluating before prescribing antibiotics. Providing a list of comfort measures parents can follow may help relieve the anxiety they have in caring for a sick child. Any comfort measure taken to reduce crying is helpful to the parent of a sick child, but mostly to the child. The following table and paragraphs will share the results of how one group of nurses at an outpatient clinic used clinical evidence to manage this situation. Source |Type of Resource |Source appropriate or |Type of Research | | |general information, |inappropriate |primary research evidence, | | |filtered, or unfiltered | |evidence summary, evidence-based | | | | |guideline, or none of these | |American Academy of Pediatrics and American Academy of|Filtered |Appropriate |Evidence-based guideline | |Family Physicians. Clinical practice guideline: | | | | |Diagnosis and management of acute otitis media. | | | |Causative pathogens, antibiotic resistance and |Unfiltered |Appropriate |Evidence-based guideline | |therapeutic considerations in acute otitis media . | | | | |Pediatric Infectious Disease Journal. | | | | |Ear, nose, and Throat, Current pediatric diagnosis and|General |Inappropriate |None of these | |treatment. | | | | |Treatment of acute otitis media in an era of |Filtered |Appropriate |Evidence –based guideline | |increasing microbial resistance. Pediatric Infectious| | | | |Disease Journal | | | | |Results from interviews with parents who have brought |Unfiltered |Appropriate |Primary research evidence | |their children into the clinic for acute otitis media. | | | | | | | | | Subcommittee on Management of Acute Otitis Media. (2004). American Academy of Pediatrics and American Academy of Family Physicians. Clinical Practice Guidelines: Diagnosis and Manegment of Acute Otitis Media. American Academy of Pediatrics , Vol. 13 No 5 1451-1465. This article is an evidence-based clinical guideline. It is a systematic review making it a filtered resource which is very appropriate for this situation. The article describes the current, (as of 2004) recommendations for the diagnosis and management of Acute Otitis Media (Subcommittee on Management of Acute Otitis Media, 2004). These guidelines show several different ways to treat acute otitis media depending on the symptoms of the child. It states that sometimes waiting to give antibioti cs is good and sometimes waiting to give antibiotics is not good. This article is appropriate and provides clarity on the topic. Block, S. L. (1997). Causative pathogens, antibiotic resistance and therapeutic considerations in acute otitis media. The Pediatric Infectious disease Journal , Volume 16 (4) pp 449-456. This article discusses antibiotic resistance and describes the bacterial pathogens which are responsible for infections causing acute otitis media. This article is appropriate. It contains a comparison of studies performed based on the different types of bacteria which cause acute otitis media. It stresses the importance of identifying the bacteria causing the infection before giving antibiotics so that number one the bacteria can be eradicated and other bacteria will not become resistant (Block, 1997). PE Kelley, N. F. (2006). Ear, Nose and. In M. L. W. W. Hay, Current Pediatric Diagnoisis and Treatment (pp. 459-492). Lang. This textbook source contains general information on the ear, nose and throat. There is much more information here regarding basic anatomy and physiology as well as characteristics of the ear nose and throat. The information regarding otitis media is basic and not an appropriate source of research in this situation for three reasons. Number one, the information is very basic, number two, it does not give any up to date information on how to treat this type of infection, and number three there is too much non-relevant information. McCracken, G. H. (1998). Treatment of acute otitis media in an era of increasing microbial resistance. The Pediatric Infectious Disease Journal , Volume 17(6) pp576-579. This article is a review of the known etiologies that may cause acute otitis media. The article gives up to date information on therapeutic approaches when selecting an appropriate antibiotic therapy. We don’t practice â€Å"cookie cutter† medicine. The same prescription is not always right for all patients or all communities where some bacteria’s may be more prevalent than others (McCracken, 1998). This is appropriate information for this group of people or community. media, P. o. (n. d. ). Interviews. (C. nurses, Interviewer) This set of interviews is simply raw data. General information can however provide great insight as to what is happening out in the community. For example, this information might shed light on the fact that if the parents are willing to hold off on antibiotics for example, would they be more likely to follow up and come back into the clinic when asked? The reaction of parents is dependent upon other several basic factors like finances, a belief system and possibly the ability to obtain transportation. Knowing how the community is going to respond to their choice may have a great effect on the decisions they make. When evaluating the findings of these sources cumulatively, one must first determine the causative pathogens infecting patients in this given community with acute otitis media. After pathogen determination we can determine which antibiotics may be most useful in eradicating the given bacteria. Careful selection of antibiotic therapy will reduce the propensity for antibiotic resistance. Watchful waiting may be a good thing from the perspective of increasing microbial resistance however we must always evaluate patients on their individual needs or on a patient by patient case. One size doesn’t always fit all. Patient education is the key to keeping the public informed of current practice. Physicians and Nurses need to be consistent in the lesson plan shared with patients and remain true to our scope of practice. Communication is essential between the physician, nurse and other multidisciplinary team members in order to provide the best care. There are many considerations in assessing if patients are able to withstand the waiting and evaluation period. Low income families are one example of how the waiting and watching method might not work. Parents may have to take time off work to come to clinic with a sick child. They might struggle finding money for the additional return trip to the clinic and may risk losing their job if they take more time off work. Many low income families may have already waited before seeking help thus creating their own watchful waiting period. They also may not be able to afford antibiotics and as a result may not give the full dose if symptoms have subsided. The perception is that they will save the medication for the next time symptoms arise. Confidentiality might be an issue in smaller communities. People tend to be concerned about neighbors and co-workers and some may not care to share their experience with others. This may be an issue for parents who don’t share custody as in the case of divorce. It is a greater issue when parents or partners don’t share the same fundamental values, especially those related to healthcare. Conclusion: Watchful waiting like the nurses in this clinic are looking at may be useful for some of the patients, but not all. Again, a one size fits all philosophy is not always appropriate in healthcare. Tools like algorithms may be helpful in determining the appropriateness for watching and waiting versus immediate action as determined by physical findings and social circumstances like parental adherence for follow up and ability to afford treatment. Whatever course you choose, watchful waiting or immediate antibiotics the best practice remains a plan of care based on the individual needs of our patients. References Block, S. L. (1997). Causative pathogens, antibiotic resistance and therapeutic considerations in acute otitis media. The Pediatric Infectious disease Journal , Volume 16 (4) pp 449-456. McCracken, G. H. (1998). Treatment of acute otitis media in an era of increasing microbial resistance. The Pediatric Infectious Disease Journal , Volume 17(6) pp576-579. media, P. o. (n. d. ). Interviews. (C. nurses, Interviewer) PE Kelley, N. F. (2006). Ear, Nose and. In M. L. W. W. Hay, Current Pediatric Diagnoisis and Treatment (pp. 459-492). Lang. Subcommittee on Management of Acute Otitis Media. (2004). American Academy of Pediatrics and American Academy of Family Physicians. Clinical Practice Guidelines: Diagnosis and Manegment of Acute Otitis Media. American Academy of Pediatrics , Vol. 113 No 5 1451-1465.

Netflix Leading with Data:What advice would you give to the CEO of Netflix Essay

Case: Netflix Leading with Data: The Emergence of Data-Driven Video Question: What advice would you give to the CEO of Netflix? Digital distribution market is undoubtedly the future of the video rental industry. Netflix has already taken a good lead in it but must have fresh ideas to keep its advantage in the industry. Beating its competitors in the domestic market is important, however, Netflix should jump out of its own circle into a new market to gain the first mover advantage. Looking at the global market, China is a good choice for Netflix’s next station. Using the Porter’s Five Forces model, Netflix can examine its advantages and disadvantages see whether entering China is good choice: * Bargaining power of customers China has a growing economy with a large group of new middle-class, who are able and willing to consume on entertainment. Nowadays, Chinese usually watch films on free websites with a low picture quality and slow Internet speed. While the number of people watching films are increasing, the picture quality is becoming more important for the viewing experience. Providing a fast, flexible and high-quality service, Netflix can persuade many customers into its subscription model. * Bargaining power of suppliers: China’s film and TV show makers have been facing a major problem: plagiarizing (including unpaid online watching), which substantially decreases their profits. They are finding a pathway to introduce their product to the customers. The advantages of plagiarizing products are the cheap prices and convenience, which Netflix can also provide. Netflix should cooperate with Chinese filmmakers to gain sources of authorized edition film databases and get a lower price since the Chinese filmmakers are eager to run out of the bad situation. * Competitive rivalry: Under the same business model, Netflix would be the first mover in the industry. Although China has few subscription service websites, this is only a minor part of the industry. * Threat of new entrants: The potential competitors have not released any big signals showing that they will enter this industry. Apple’s iTunes, as well as Amazon did poorly in China and have decided not to continue expanding. Netflix should cease this opportunity to enter and take China’s market. * Threat of substitute products: China’s online distribution market is dominated by â€Å"Youku†,  Ã¢â‚¬Å"Tudou† such online video provider; however, their profit model is advertising fees, focusing on the quantity of visitors. With distinct service, it’s not hard for Netflix to occupy the market share. How to focus on the targeted group and how to persuade their potential customers, who used to enjoy cheap, even free resources online, to pay for a m onthly membership, is a big concern to the corporation. To emphasize Netflix’s higher quality service is of great importance. First, Netflix’s technology can help its members build up personal own style’s videos at high efficiency. Besides that, compared with the existing Chinese video websites, like Youku and Toudu, Netflix does not contain any advertisement before or after a movie. Those movies and TV shows posted on Netflix are mostly high definition displays, and customers would like to pay for the HD movies, rather than trying to understand a blurry image on other websites. Furthermore, Netflix’s new component called Friends allows movie buffs to share reviews and recommendations. In China, the website could cooperate with Douban, which is the largest and most influential film review website, and Renren, which is regularly called Chinese Facebook, so that Netflix could not only act as a video online leasing website, but also a social network website in China’s market. Beside the high-level quality, Netflix should offer a large quantity of movies, especially the movies from Hollywood. With the Chinese movie import policy, China only imported 55 movies in 2012. The number is comparatively small compared with the amount of movies that the Chinese audience demands. Netflix could take the advantage to offer more American movies online, which is under laxer regulation both on amount and the content examination, to gain the customers who are interested to watch more foreign movies. ——————————————– [ 1 ]. Walker, Russell, and Mark Jeffery. â€Å"Netflix Leading with Data: The emergence of Data-Driven Video.† Kellogg (2010): 6. [ 2 ]. www.douban.com [ 3 ]. www.renren.com [ 4 ]. China Communication research center, SARFT. Website: http://www.sarftrc.cn/cn/ [ 5 ]. è µ µÃ¨â€œâ€°Ã¥ © §,Ã¥ · ¨Ã¦â‚¬ Ã¥Ëœâ€°. â€Å"ç ¾Å½Ã¥â€º ½Ã§â€ µÃ¥ ½ ±Ã§Å¡â€žÃ¥ ¼â€¢Ã¨ ¿â€ºÃ¥ ¯ ¹Ã¤ ¸ ­Ã¥â€º ½Ã§â€ µÃ¥ ½ ±Ã¥ ¸â€šÃ¥Å" ºÃ¥ ½ ±Ã¥â€œ Ã§Å¡â€žÃ§  â€Ã§ © ¶Ã¢â‚¬ 

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