Netflix Target Market Analysis

2) Explain the role of channel intermediaries in the product distribution process. Why is their role important?

Netflix is in a fairly favorable position on the strategic group map. Where Added value is measured in terms of instant movies and recommendations, and market coverage is measured in number of stores, vending machines, and online presence.

Netflix was founded in 1997 with the intent to revolutionize the way in which consumers watch movies and television shows. Their accomplishments both in innovation and in customer base for their service indicate that the firm has been, and continues to be, successful in doing so. Currently, the

Netflix globalization moment is divided before and after the live streaming. Before Video-on-Demand, the company was only operating in the USA with the regular video delivery. Consumers used to access their website and request the videos for delivery; so they made up a partnership with USPS in order to deliver and retrieve DVDs all over the US. With technology enhancement and TV channels (NBC and CBS) broadcasting content online, Netflix came up with the concept of video on demand as well.

Another characteristic or segmentation is related to the family life cycle stage of the end-users. This describes which kind of household would be targeted upon by a company like Netflix. The stages that are targeted have a relationship with the age characteristic. The users of Netflix are most likely to be either a starting family with or without children or a full grown family with older children.

This type of segmentation is about the buying behavior of the consumers. In this case, it is about how people behave in terms of entertainment and social interaction.

Netflix is an entertainment company that specializes in streaming media and online video-on-demand. Over the years, it has grown to include film and television production and other distribution services. Its business model has changed, and so has its overall production cost grown to keep up with the increased market share. As a result, its current position in the market has made it more exposed to competition from other firms, which is why it needs to develop new strategies to remain profitable. Netflix has grown over the past years despite competition and its unprofitability (Helft, 2007). Therefore, to understand its success, it is important provide a microeconomic analysis of Netflix, its history, its products, and the market.

First formed in 1991, Netflix has become today’s predominant video rental service. They offer a hybrid service allowing DVD delivery by mail as well as streaming movies and TV shows via their company website or access on 200 other devices. Their unique business process has netted them over 16 million subscribers and revenue around $500 million annually. The reason for their growing success can be attributed to a good business model and just as important, properly implemented systems. An extremely efficient supply chain management system (SCM) and customer relationship management system (CRM) have helped Netflix become the world’s largest video subscription service.

The following is a case study of Netflix, Inc. an American-based company that provides the streaming of online media to consumers in North America, South America, and parts of Europe. This case study will provide a brief overview of the company’s history along with four present-day challenges that the company will face as it tries to stay ahead of the competition. In its discussion of the present-day challenges that Netflix, Inc. faces the discussion will also relate the proposed challenges to the managerial challenges of globalization, diversity, and ethics. After each of the four anticipated challenges have been addressed then this paper will provide an analysis of the steps that Netflix, Inc. has already taken to keep the

A three circles analysis is a beneficial way to look at competitor benchmarking that helps provide vision of a company’s comparisons with competitors in the same market, what needs the company provides, what needs the customers want, and what needs the competitor fulfills (Pearce II, J., Rovinson, R., 2015). In using this format to analyse the company Netflix, we are able to see where Netflix has strengths internally and compared to its competitors.

Also Netflix needs to prepare a better plan to recover old customers, gain new customers and make sure that the people who still have Netflix keep it. Establishing a bundle price for both online streaming and DVD rental will allow The Netflix Company to recover some market shares and remain the leading overall digital film company. The recommendations are as follows:

Netflix, the online subscription-based DVD rental service aimed to better satisfy customer in a way competitors didn’t, customized and personalized service with unlimited monthly rentals from a great variety of film offerings. Now they want to leverage their strengths to enter into the Video on Demand market

To offer a wide selection of DVDs for its consumers, Netflix worked with more than 50 studios and distributors. Revenue sharing arrangements

Netflix Inc. is in the entertainment market, which is a part of a larger video, film

Netflix exhibits dominant economic characteristics in the online movie rental business. They enjoy strong market size and growth rate when compared to rivalry competition. The number of rivalries are increasing, and the market remains dominated by only a few sizeable rivalries like Blockbuster Video, Wal-Mart, Walt Disney Movies and Movielink’s Downloadable Movies. Netflix is determined to offer new and innovative technology to sustain their competitive advantage.