...Netflix Domestic Strategy Prepared for: Netflix Senior Management Reed Hastings, Co-Founder and CEO Kelly Bennett, Chief Marketing Officer Jonathan Friedland, Chief Communications Officer Bill Holmes, Chief Business Development Officer Neil Hunt, Chief Product Officer David Hyman, General Counsel Patty McCord, Chief Talent Officer Ted Sarandos, Chief Content Officer David Wells, Chief Financial Officer August 4, 2012 Through this report, our consulting team has taken the opportunity to analyze and provide recommendations for future domestic business strategy of Netflix. As expressed in the company’s founder’s conference last October, we would like to help you build upon your stated vision for the future including: • Becoming the best global entertainment distribution service • Licensing entertainment content around the world • Creating markets that are accessible to film makers • Helping content creators around the world to find a global audience We would also like to follow the nine values you use to guide your company: • Judgment • Productivity • Creativity • Intelligence • Honesty • Communication • Selflessness • Reliability • Passion In this report, we will address the following issues to provide a foundation for overcoming Netflix’s domestic challenges: I. Competitive Dynamics A. Key Competitors B. Competitive Response II. Strategic Management/Competitive Issues A. Key Strategic Issues B. Strategic...
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...Netflix Analysis Netflix, Inc. is an internet television network. The company derives revenues from monthly subscription dues. Its members can watch as much as they want, anytime, anywhere, on nearly any internet connected screen. Members can play pause and resume watching, all without commercials or commitment (Netflix, 2014). Netflix does not have an actual mission statement, however, according to Reed Hastings, founder and CEO, their mission and vision is “to grow our streaming subscription business domestically and globally, continuously improving the customer experience, with a focus on expanding our streaming content, enhancing our user interface and extending our streaming service to even more internet-connected devices, while staying within the parameters of our consolidated net income and operating segment contribution profit targets” (Hastings, 2014). Nine company published values provide further clarification about the principles which guide its employees in their daily decisions and activities. Those company values as published are: judgment; productivity; creativity; intelligence; honesty; communication; selflessness; reliability; and passion. Hastings has expressed a clear vision for the future of Netflix, which is to become the best global entertainment distribution service, licensing entertainment content around the world and creating markets that are accessible to filmmakers, thereby helping content creators around the world to find a global audience. The...
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...Forces Analysis………………………....……………………3 Entry………………………………………………………………3-4 Rivalry…………………………………………………………….4-5 Substitutes…………………………………………....…………….5 Supplier Power……………………………………………………5-6 Buyer power………………………………………………………..6 Competitive advantage………………………………………………..6-10 Identifying challenges…………………………………………...…..10-13 Reference…………………………………………..………………….14 5 Forces Analysis of the Video on Demand Industry By offering streaming movies through its website, Netflix is entering the Video on Demand (VOD) industry. This industry, along with DVD rentals (both from online providers such as Netflix, and cable services such as On Demand and Pay-Per-View), is part of the larger industry of “watching movies in the home.” However, since Netflix is already positioned in this market, with its online DVD rentals, we will examine the smaller 5 portion of the market that is streaming online movies. This business is too closely related to the movie downloading service to be considered as a separate market. Threat of Potential Entrants Today, internet video rental industry is very profitable and still has a very good develop prospect. After Netflix’s success, the whole video industry starts to change gradually, and more and more people start to consider entering this field. However, for most of those potential entrants, this industry has some big barriers to entry. First of all, the service in this industry is already very complete. With its seven-year-development, Netflix has improved...
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...Netflix Analysis Dayani Marrero DeVry University 07/25/2012 Netflix Analysis Netflix Inc. is the world's leading rent-by-mail company. The firm has more than 1.1 million subscribers who typically pay a monthly fee of $19.95 for unlimited rentals, provided they have no more than 3 discs out at one time. The company offers more than 15,000 titles and maintains an inventory of more than 5 million discs. To speed delivery, Netflix has opened more than 20 regional shipping centers around the United States, and most DVDs are received by customers a day or two after ordering them on the company's Web site. More than a third of the publicly traded company is owned by Jay Hoag's Technology Crossover Ventures. Some of the organizational strengths are low prices and fast delivery. With the low prices they have they attract more customers into signing up. The price is convenient for almost everyone because it is affordable. Netflix is the best way to watch movies for a low price each month you get to watch unlimited movies and shows. There are competitors like Hulu or Red box and now Blockbuster that offer movie streaming online and also by mail. Blockbuster is Netflix’s biggest competitor at this time but the only thing that Netflix has to win over customers is their low price. Blockbuster charges $14 a month just for online streaming and Netflix charges $14 a month with online streaming and DVD’s by mail. Two options for the same price when the other has one option. Netflix also...
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...A SWOT analysis is an essential evaluation that every company should consider utilizing. It reviews phases and elements of a company with the purpose of showing what aspects are working well and which ones need to be improved. By applying the SWOT analysis to Netflix, I have concluded that their strengths are, the easy stream and the accessibility that the service offers to its customers. Subscribers can enjoy their favorite shows and movies in the comfort of their home, on the go, during their lunch break and even on their mobile devices or computers. Another strength that Netflix has is their affordable monthly subscription that ranges between $7.99 and $11.99 per month which includes unlimited movies and TV shows. The additional benefits of a membership depend upon how much you want to pay each month. With the improved development of internet speed, more customers are preferring to watch their movies and TV shows online thus decreasing the usage of DVDs. This is considered a weakness of Netflix, because the company decided to separate their services into two categories: the streaming Netflix and DVD.com, a Netflix company which offers physical DVDs that are delivered by mail. The DVD by mail operations have decreased considerably in recent years and the decline of memberships is expected to continue in the future. On the other hand, a big advantage Netflix has compared to other similar services, is the growth of International markets. Netflix is present in more than 200 countries...
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...Netflix Case Analysis Netflix is an American provider and the world's leading internet subscription service of on-demand streaming media in the United States, Canada, Latin America, the Caribbean, United Kingdom and Ireland and flat rate DVD-by-mail in the United States. Netflix members can instantly watch unlimited films and TV episodes streamed over the internet to more than 700 devices for about $7.99 a month. With regards to increasing the influence of the Netflix brand, expansion into the video game industry could be an option, however various factors such as competitors, viability and sustainability of the company as a whole need to be further analyzed in order to assess whether this proposal is feasible. Competitor Analysis AREA| NETFLIX| HULU| BlOCKBUSTER| REDBOX| market share| 55%| 35%| 5%| 5%| Subscribers| 23.6 mil| 24 mil| low| 12 mil| Brand Popularity| HIGH| LOW| MED-HIGH| MEDIUM| start date| 1998| 2007| 1985| 2003| Revenue in 2011| 705.7 mil| 420 mil| bankrupt| 363.9 mil| Revenue increase from 2010| 29.00%| 48%| | | Growth in customers| 30%| 50%| | 30%| (in 2011)| | | | | Netflix's success has inspired a number of other DVD rental companies both in the United States and abroad, but none of the purely online companies appear to approach Netflix in terms of market share or revenues as can be seen above. Hulu is a close second in terms of Market share and it can be seen that its entry into the market was nearly...
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...Netflix SWOT Analysis Netflix is the world’s leading Internet subscription service for enjoying movies and televisions show. Netflix is currently taking on an innovation strategy in hopes of repairing critical damage to their image that was made by significant changes to product and membership costs. Netflix strategy is to continue to build a platform that allows for consumers to obtain the best streaming subscription business both domestically and internationally. According to Netflix’s Annual Report they state, “We are continuously improving the customer experience—expanding our streaming content, with a focus on programming an overall mix of content that delights our customers, including exclusive and original content, enhancing our user interface and extending our streaming service to even more Internet-connected devices while staying within the parameters of our consolidated net income (loss) and operating segment contribution profit (loss) targets.” Netflix has previously put focus on operating on margin targets. However, moving forward they will put primary focus on operating within specific parameters of each segment. The three segments include domestic streaming, international streaming and domestic DVD. In 2011, Netflix had recognizable struggles with consumers due to significant changes in their price point. They took an approach to rebrand themselves in 2012 and focused on the consumer and creating an exceptional customer experience. Their projected strategy...
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...Quarter:2010 NETFLIX: A COMPANY ANALYSIS Prepared By Group 5: Alex Krengel, Annie Dudek, Rick Momboisse, Trish Paik, & Tyler Martin  Table of Contents I. Wall Street Journal Article and Executive Summary ..4 I A. Wall Street Journal Article 4 I B. Executive Summary ..5 II. External Analysis ..7 II A. Industry Definition ..7 II B. Six Industry Force Analysis ..8 II C. Macro Environmental Forces Analysis, Economic Trends, and Ethical Concerns ..15 II D. Competitor Analysis ..17 II D. 1 Netflix’s Competitors ..17 II D. 2 Netflix’s Primary Competitors ..17 II D. 3 Primary Competitors’ Business Level and Corporate Level Strategy ..18 II D. 4 How Competitors Achieve Their Strategic Position ..18 II D. 5 Willingness to Pay ..21 II D. 6 Comparative Financial Analysis ..22 II D. 7 Implications of Competitor Analysis ..23 II E. Intra-Industry Analysis ..24 III. Internal Analysis ..24 III A. Business Definition/Mission ..24 III B. Management Style ..24 III C. Organizational Structure, Controls and Values ..25 III C. 1 Organizational Structure ..25 III C. 2 Organizational Controls ..25 III C. 3 Organizational Values ..25 III D. Strategic Position Definition ..26 III D. 1 Corporate Level ..26 III D. 2 Business Level ..27 III D. 3 Resource & Capability Level ..28 Value Minus Cost Profile ..28 Value Chain ..28 VRIO Analysis ..28 Consumer Retention Analysis ..29 4Ps Analysis ..29 Product Life Cycle ..30 III E. Financial Analysis ..31 III E. 1 Netflix Financial Performance...
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...Company Analysis: Netflix 04/28/2011 Executive Summary Netflix Inc is a by mail DVD rental company and online streaming video webpage service exclusive to its paying subscribers. There are currently 2,180 full-time employees that manage a company with more than 20 million clients (mergentonline.com). Netflix is known for its innovative and sustainable business model based on unlimited service for a flat fee subscription. It distributes DVDs and controls inventory efficiently, to a point where costumers are completely satisfied with the service received (Freed). Throughout the years, Netflix has been operating by providing DVDs by mail to costumer’s households from its strategically located shipping warehouses. Additionally, Netflix started to offer online video streaming in 2008 to expand their services and appeal to a younger audience. This shows how Netflix adjusts in changes in the industry. The video rental industry was slowly loosing its appeal, in which companies like Blockbuster Inc. and others had a hard time making a profit using the usual classic video rental method at physical stores. But Netflix did not suffer from the industry losing its appeal. Netflix’s source of revenue comes from the monthly fee its millions of subscribers pay. Even when the economic environment was not at its peak the last few years, Netflix managed to sustain growth. Its unlimited service plans has kept demand buoyant, and it is one of the few movie rental companies that profits go...
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...Session 3 Case Analysis Stephanie Shanks Strategic Management March 28, 2015 Professor Debra Hunter Shorter University Netflix in 2012: Can It Recover from Its Strategy Missteps? Introduction The following case analysis follows the strategic moves of Netflix over its existence, specifically from 2011 to 2012. The specific matters discussed refer to some poor strategic decisions made by the company. Netflix made many decisions that turned out to be toxic to the company’s future. Moving from price changes to global expansion, the firm’s financial status was back and forth. Further analysis will identify key issues with strategy and allow for realization for better alternatives. Company Background Netflix was founded in 1997 (Netflix, n.d., para. 1). The company started out with the idea of offering online movie rentals. Over time, the firm has grown to offer subscription services for online media streaming of movies and television shows, and DVD rental. The idea behind the services was to allow consumers more affordability and flexibility in renting videos. Consumers are able to pay a small monthly subscription fee to rent a specified amount of DVDs based on the plan for any desired length of time, without worrying about late fees (Thompson, Peteraf, Gamble, & Strickland, 2014, p. C-137). Netflix also offers a streaming option for movie and TV shows. The service started out as metered but moved to a subscription for unlimited streaming (Thompson et al...
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...remarkable alternatives to traditional pay TV. Nowadays, people have at their disposal a wide range of services from Netflix and Amazon Video to Hulu that allow them to watch their favourite movies and TV series at any time and thorough a multitude of devices. The time when we all depended on the living room to watch TV has long gone. Internet gives us the freedom to watch TV anywhere either we are inside the house or in a public transportation. NETFLIX: THE MARKET LEADER Netflix was founded in 1997 as...
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...Failure Analysis/Change Strategy: Blockbuster vs Netflix LDR/531 Failure Analysis/Change Strategy: Blockbuster vs Netflix Organizational Behavior Theories The organizational behavior theories which explains Netflix’s success are two; decision-making and systems approaches. Netflix made the monumental decision to become a virtual dvd rental versus a brick and mortor provided a solution in the company’s goal and vision to be ahead of technological advances in the industry. Netflix took on the systems approach in understanding and measuring the company’s input and output processes. Netflix uses the systems approach to integrate and drive processes in developing adaptive capacities, driving innovation. Blockbusters organizational behavior theory focus was on scientific leadership. The company placed a great deal of focus on how to become more effective in the company’s brick and mortor business, redefining company objectives and direction. How employing this theory failed the company was the leadership decision to not pledge the same level or more focus on the click initiative which the company could not capture the needed momentum in becoming competitive with Netflix. Blockbuster could have had a more competitive edge over Netflix sustaining its presence in the industry if only the company could define better performance practices leveraging its click business over its brick and mortor presence. Role of the organization on the Fail/Success So how did an upstart company...
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...Netflix Executive Summary: This paper represents an overall analysis of Netflix (http://netflix.com). Netflix is one of the leading internet television networks with over 62 million subscribers in 52 countries (Netflix, 2015). It provides customers with online streaming for movies, TV shows, documentaries, songs, other digital media, and offers DVD and Blue ray rentals (Wessel). This paper will review the negative and positive points that Netflix is facing in the industry through: 1- Industry analysis (Macro analysis) 2- Competitive Analysis (Porter’s model) 3- Alternative considerations 4- Strategic recommendations Industry Analysis (Macro Analysis) Netflix is focusing on three major points regarding its industry: a- Shifting demographics within the United States b- Expanding its market to other countries like Brazil, Russia, India & China (ResearchOmatic). The shifting in demographics in the United States focused mainly on age distribution and racial diversity (ResearchOmatic). There was approximately 13.5% increase in the population of age 65 or higher, the Hispanic population increased by 15.8%, & Asian population went up to 10% within the years 2004-2008 (ResearchOmatic). On the other hand, Netflix has expanded and still expanding into other countries in the world: “Canada became the first foreign country to have live streaming on demand in 2010. Netflix entered the Dutch market in 2013; Latin and South America and the Caribbean in...
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...Accounting Netflix, Inc.: A Financial Analysis Andrew Gaines This paper was written for Professor Bearden!s Financial Statement Analysis course. Netflix, Inc. is the leading provider of online movie rentals in the United States. Out of an approximate 12,000,000 online movie subscribers in 2008, subscribers to Netflix constituted about 9,400,000. The company has strong profitability ratios as revenues increased 13.2% from 2007 to 2008 and net income increased 24.6%. Netflix has higher costs of revenues than its competitor, Blockbuster Inc., but it has outperformed that company. Blockbuster experienced net losses in 2007 and 2008. Netflix!s current liabilities have increased to match revenue growth, while long-term liabilities have increased to recognize an increase in lease obligations. Equity decreased from 2007 to 2008 by 19.2% due to an increase in treasury stock. This financial statement analysis of Netflix, Inc. encompasses the years ending December 31 of 2006, 2007, and 2008. Financial data was gathered from the 2006, 2007, and 2008 10-K filings with the Securities and Exchange Commission (SEC) and the company!s 2009 Q-1 filing for its first quarter of 2009. Additional data was also taken from the company!s website: http://www. netflix.com. For comparative purposes, data was gathered from one of Netflix!s competitors, Blockbuster, Inc. Data for Blockbuster was gathered on it company website, http://www.blockbuster.com and its 2007 and 2008 10-K filings with the SEC. Industry data...
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...influence their own televi-sion program. Most TVs have the ability to install applications, like Netflix. Older screens can be updated by a small hardware player to get this capability. Usually living room video entertainment is done by traditional companies like the RTL group. The customer can switch the channels, but is not able to choose his program by a remote click. Netflix is the pioneer and market leader in the US in streaming and offers shows and movies by video on demand. New streaming companies will mix up the tradi-tional market. A kind of quantum leap infects the television screen. The conver-gence of technologies combines an internet stream on the classic television. Traditional companies, like RTL, should consider following a different another strategic management course than for example Netflix. This assignment analyzes the streaming market, the forces, threats and opportu-nities as a Macro Environment Analysis. It’s a fast growing business and has a huge potential. The company Netflix is screened by a Micro Environment Analysis to show their portfolio and key figures. In the targeting and positioning part, a possible way of a strategic corporate management is developed, by references on the analysis of Porter’s three generic strategies, Ansoff and Mintzberg. For the final conclusion the current strategy will be investigated and opportunities are shown. Netflix has still some unexploited possibilities to maximize the profit and demonstrate also their market...
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