III. Read the text and be ready to do the following assignments.

Date: 2015-10-07; view: 666.

Netflix, Blockbuster Battle It Out

B. Which of these statements gives the best summary of the ideas in the text?

a) Netflix had hoped that lower prices would entice customers to rent more movies and thus increase its overall revenues. The gamble paid off.

b) You can find cause-and-effect relationships everywhere, and they are especially important to businesses.

Netflix and Blockbuster continue to battle head to head in the online movie rental arena. The monthly rental prices have dropped for DVD entertainment delivered to your door, ordered online. . . . Entertainment culture at its best, it seems—lots of competition and that is normally a better price point for the consumer.

[Reed Hastings, the CEO of Netflix, says,] “One of the reasons our last year has been so successful is the market's elasticity in response to our price cuts one year ago. . . . Obviously, if there's enough elasticity to make additional price cuts work, this would increase the economic pressure on video stores, and the additional store closures would further increase Netflix growth for many years ahead.”

In 2006, Netflix expects to grow to 5.65 million subscribers with pretax net income between $50 million and $60 million.

A. Scan the next article for the answers to the following questions:

1. What is Oscar Mayer?

2. Why is making cheese healthier complicated?

3. What process is known as reformulation?

4. Why did Kraft decide to reformulate a product that was already popular?

Oscar Mayer, one of the brands of Kraft Foods Inc., first launched its Lunchables product line in 1988. The prepackaged lunches quickly became popular, and today these snacks are available in many different flavor combinations. They also have come under attack by critics. Kraft is finding ways to satisfy these critics and keep consumer demand high.