Essay Renting and Netflix

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NETFLIX, INC. 1 Company Images Montage 1

INTRODUCTION 2 Purpose Statement 2 Company Profile: Netflix, Inc. 3 Industry Profile: Video Tape and Disc Rental 4
INTERNAL ENVIRONMENT ANALYSIS 8 Resources 8 Capabilities 11 Core Competencies and Distinctive Competencies 14 Value Chain Analysis 17 Weighted Competitive Strength Assessment 30 SWOT Analysis 33
APPENDIX 36 Team Evaluation Form 37

Company Images Montage


Purpose Statement

The purpose of this report is to analyze the internal environment of Netflix, Inc., within the Video Tape and Disc Rental industry. To begin
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Studios have been pushing sales with added content, such as behind-the-scenes footage and blooper reels, as well as earlier and earlier DVD releases (Holahan, 2006).



Tangible Resources Tangible resources help contribute to the development of capabilities and competencies in a company. The biggest resource for Netflix, the world's largest online entertainment subscription service, is CEO and founder Reed Hastings. Hastings founded Netflix in 1997, and launched the online subscription service in 1999. For the first four years, the subscriber base was over 2 million (Maddox & Thompson, 2006). As of August 2005, Netflix employed approximately 1,200 people in the United States. About 1,000 of them work in the company's distribution centers around the country; close to 200 employees work at the company's headquarters in Los Gatos; and 20 employees work in studios in Los Angeles (ChronicleJobs, 2005). Netflix offers their members more than 55,000 DVD title selections. This is more than any other online rental service in the United States. In 2005, Netflix shipped more than 1 million DVDs a day. Its inventory was approximately 20 million DVDs, and Netflix spent $84.2 million acquiring new DVDs. As of September 30, 2005, the company's balance sheet showed its DVD holdings at a net value of $52.7 million after depreciation (Maddox &
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