Essay on Netflix Case Study

Movie is common entertainment over the world, so Netflix has an opportunity to challenge abroad by online service platform.

The third issue affecting Netflix is the age of movies that they offer to their customers. Netflix cannot deliver the newest movie titles online because they are not offered through VOD for at least a month after they come out on DVD. This is a huge disadvantage to their customers that exclusively use Netflix’s online service. This is the only advantage that Blockbuster still has over Netflix, because if someone wants to see a movie the day that it comes out on video then

1. Netflix’s original marketing strategy offered several flat-rate monthly subscription options; in which, members could stream movies and shows via the Internet or have disks sent to their homes in a pre-paid and pre-addressed envelope. Free from the despair of due dates and late fees, members could keep, up to, eight movies at a time. Upon the return of a disk, Netflix would automatically mail out the next movie from the customer’s video queue. Members were able to change and update their queues as frequently as they liked. The sheer innovation of Netflix’s strategy encouraged several competitors to enter the market to compete directly,

It appears that Netflix has control over the vast majority of the movie rental business. Consumers are renting less than they used to and the convenience that Netflix incorporates into its service, such as online streaming and mail orders eliminates other competitors from considering entering the movie rental business.

What role has Netflix played in the development of Blockbuster’s strategic planning? How important is Netflix to Blockbuster’s future strategic plans?

Netflix does have a sustainable competitive advantage. According to Wolf, (2006) states Netflix hurt Blockbuster DVD rental by competing with lower prices and mailing out DVDs to people who did not feel like getting out or was in a rush to watch a new movie. Netflix also helped by stopping people standing in lines at a store or the store would be out of

Netflix is a company with reputation. It has 15 years experiences and has a good deal of loyal consumers.

In conducting a SWOT analysis of Netflix, we must not only look at the strengths, weaknesses, opportunities, and threats, but we must also draw conclusions about Netflix’s particular situation and how these four areas can be used to improve its overall strategy.

Rivalry among industry competitors – Netflix and Blockbuster are in a highly competitive industry. Competitors include merchant retailers, such as Wal-Mart, Best Buy, and Target; video and game store like Hollywood Video, Movie Gallery, and Game Stop; supermarkets, convenient stores such as Publix, and McDonald's. The significant rival is Hollywood Video which offers movie and game rentals (Xie & Lin, 2008).

In the age of online streaming of popular movies and TV series, Netflix is the number 1 global internet subscription provider by leaps and bounds. The company was founded in Scotts Valley, CA in 1997 by Marc Rudolph and Reed Hastings, both of which were becoming heavily involved in the “new technology” of the world. The initial idea for DVD rental-by-mail came about when Reed Hastings had accrued upwards of $40 in later fees after returning an overdue movie. It was at this point in time that Hastings vowed to never charge any customer late fees and to this day him and his company has held up that deal. During that time DVD’s were just becoming popular so Hastings and Rudolph made the decision to take up the opportunity to sign up as many early subscribers as possible for this new service they were going to offer. After many years of ups and downs, Netflix became the go to site for anyone wanting to watch a certain movie or show on their own time without having to wait for it. There are three subscription plans for the online streaming part and three subscription plans for the DVD rental-by-mail portion as well. The best part about this service is that all the plans that are offered are under $15 a month, well below the average cable bill. Having different plans available to the average consumer means that the company can pull in more revenue regardless of which subscription is signed up for. Netflix currently is carrying 48 million members worldwide in 40 different

They have done so by creating mutually beneficial relationships with a number of entertainment video providers. Their second main strategy is focused on product differentiation. Not only how customers obtain the content and use it, but also what customers choose what to watch. Netflix’s leading competitive advantage lies within their unique software. The software takes what a customer has watched or rated and based upon that information builds a list of suggested titles similar to ones they have just watched. While other companies like Blockbuster has transitioned into the rent-by-mail niche category that Netflix had started, no other company has customer-profiling software quite like Netflix. It is continuously updating their smart selection technology to keep up with customer needs.

Netflix strategy has no brick and mortar stores, big stores with a variety between 300 to 4000 movies in stock. Netflix relies on the internet for customers’ orders and mail system for the delivery. The company does not have late fees, fluctuating monthly fees, predetermined rental periods, instead has a flat fee. Netflix, let customers view unlimited streaming of movies and TV shows for a monthly fee and has also developed platforms to deliver its titles to Nintendo Wii, Xbox 360, PlayStation 3, and TiVo.

Even though Netflix is successful in revenue and expanded globally, it is vital for the organization to create a SWOT analysis “which stands for a company 's strengths, weaknesses, opportunities, and threats (Abraham, 2012). Netflix does have a competitive market such as Amazon.com and Hulu that are becoming more popular with their lower monthly pricing. They also have a more simplified catalogue of consumer favorite new titled movies and TV shows. In order for Netflix to stay competitive with a strong strategic plan, let’s take a look at the SWOT to identify what the best course of actions would be to increase and/or sustain the current procedure for the benefit of the company, its employees and the satisfaction of it consumers.

1. While both Netflix and Blockbuster competed on home video rentals, their profit models are the opposite of each other. Blockbuster owned thousands of locations around the US and internationally so that customers could rapidly rent out videos at fixed nightly fees near their local area. Furthermore, late fees were used to maintain their stores available selections by forcing customers to timely return their rented videos and therefore late fees accounted for a large portion of Blockbuster’s revenues. In contrast, Netflix offered mail-in DVD services where it charges its members a monthly subscription and allows them to hold on to a maximum of three videos for as long as they like without incurring additional fees with the condition that the videos were returned in good condition. With this model, Netflix is less profitable when users are frequently exchanging videos because Netflix incurs all postage costs and its users only pay a monthly subscription. Netflix, however, does not bear any fixed costs associated with brick and mortar stores compared to Blockbuster.

Step 1: Identify the specific competitive pressures associated with each of the five forces Step 2: Evaluate the strength of each competitive force Step 3: Determine whether the collective strength of the five competitive forces is conducive to earning attractive profits. (Thompson, Strickland and Gamble 2008:54) Competitive rivalry Blockbuster reached a peak of 9,094 company-operated and franchised movie rental stores worldwide. However, when Blockbuster launched an online subscription service in 2004, it met the strong competitor, Netflix, which already had more than 2 million subscribers. Netflix offered a wider choice of subscription plans from $8.99 to $47.99. And it also developed proprietary software to provide subscribers with detailed information about each title in the Netflix library. Netflix offered a high quality service by giving one-business-day delivery capability for most of the subscribers. These kinds of service and performance cause the rivalry to be