Essay about Netflix - Strategic Plan

2244 WordsJul 15, 20089 Pages - Strategic Plan Netflix is the world’s largest online entertainment subscription service, providing more than U.S. 4 million customers with access to over 100,000 DVD titles. Netflix’s business is renting DVD titles on a subscription basis, with different plans ranging from $9.99 a month to $47.99 a month. Nearly 95% of Netflix subscribers are within a one day ship point, which means most customers will receive the movies within one day of ordering. Their deep movie selection, personalized recommendations, and quick delivery have made Netflix the top-ranked Internet company in customer satisfaction, which has driven rapid growth in subscribers, revenue and earnings (Netflix, 2008). Netflix started out as a regionally…show more content…
Once the applet is installed movies can begin playing within 30 seconds after the rental is imitated. Additionally, the movie can be paused and restarted at the user discretion, and the digital delivery service only requires a minimum of one megabit per second of bandwidth. The more bandwidth a user has higher quality the video displayed (MovieWeb, 2007). A 3 megabit connection will provide almost DVD quality video. Netflix believes its mail-based Internet rental business will continue to grow, taking market share away from its competitors, such as Blockbuster. Since the public has embraced music downloading from companies like iTunes, there is reason to believe the digital delivery of movies will be equally successful. However, if this new service does not succeed, Netflix will still have its mail-based Internet rental business, which it expects will continue to grow. The failure of digital delivery will not have a material impact on Netflix’s financials position. Marketing Strategy Netflix uses a product-based marketing strategy to support its online movie rental service. The company offers a subscription based movie rental service, at a lower cost than its competition, a larger catalog of titles than its competition, and free shipping. Netflix’s marketing strategy and value proposition are clearly focused on providing a value added service at competitive prices. The company created a national
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