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Case Study: SWOT Analysis of Netflix By: Ashley Avallone Executive Summary Netflix started as an online based movie rental service in 1999 when it was created by founder Reed Hastings, the current CEO of the company. Hastings’ goal for the company was to be “the world’s best Internet movie service provider and to deliver a growing subscriber base and earnings per share every year” (Thompson, C-92). The company has been able to become a leader in the movie rental and streaming industry for several reasons. Netflix was an early entrant to the industry and has been able to build an extensive subscriber base due to aggressive promoting and advertising of the brand, exclusive contracts with movie suppliers, and their superior…show more content…
Streaming videos is cheaper than distributing actual DVD’s because companies do not have to maintain a strong distribution center and vast inventory; both of which take up time and money among other resources. Another advantage of streaming videos is that consumers have continuous access to movies and no longer have to leave their home. This high demand for movies has spurred intense competition among firms looking to profit off of streaming music digitally. Netflix was one of the original companies that realized the trend towards streaming and have lead the competition since. Today the top five best companies that provide media streaming services are Netflix, Amazon’s Video on Demand, Hulu Plus, Vudu, and Itunes (Warren). While the subscriptions for these services have increased in recent years, there are some areas of concern for these firms. The economy and market environment in technology is always changing; innovative new products replace old ideas on a daily basis. Netflix has several advantages and disadvantages that, depending on how the company reacts, will dictate their overall success. By using a SWOT analysis we can easily see internal areas that Netflix is strong in, where they need work, and how the external environment will provide them with obstacles as well as great potential opportunities. Analysis Strengths Netflix has several key attributes that make it a
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