Swot Analysis of Netflix

The movie rental industry is a living industry; there are constant changes with advances in technology, rights management, and the slow, but steady, move away from physical Media. Companies such as Netflix, Hulu, RedBox, and Blockbuster are being forced to look at new business models and try to keep up with these changes.

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 provide streaming service with monthly plan that is only provided by Netflix. Customers can watch movies on demand through several electronic devices such as Play station 3, Xbox 360, coming up

Q 1. Some of Netflix’s capabilities and core competencies are mentioned in the case. Go

The downturn of the economy has taken away many peoples disposable income and Netflix’s limited online library may have caused customers to question if it was worth it or not.

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,

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.

Entering and transforming the video rental industry was a large undertaking for the start-up company. The first marketing objective the company undertook was the process of building a brand. Netflix’s identity was crucial to future growth and success. Without a strong brand, competitors with deep pockets could have easily duplicated the company’s business model. Secondly, leveraging technology was critical to establishing the business and infrastructure growth. The consumer base was the final objective Netflix sought to achieve. Retaining and growing subscribers were fundamental to revenue and marketing goals.

Netflix has around 75 million subscribers today which suggests that it is a very popular organisation. Netflix at the moment serves many markets across the world whinch included the US and Europe. Netflix suffers from competition from companies such as Amazon prime. Both of these companies compete to gain customers in this compact market. Netflix's corporate strategy fits in with their business level strategy as they deal mainly with DVD rental via online streaming. The deal that is in place with Warner bros has a major impact on how Netflix conducts itself. If other online streaming companies don't face this deal of not being allowed to stream their contents untill 28 days after the public release date then other companies have a competitive advantage which would lower Netflix's revenue. This would cause customers to leave Netflix as they may be able to see films at an earlier date with rival

The main problem facing Netflix is the pending conflict with its content providers. Netflix has low bargaining power both over suppliers and buyers, and this represents an existential threat to the business. Netflix has proven to be a popular service, but despite the successes of its first ten years, there is now evidence that it has not fostered much brand loyalty, and that its customers are quite price sensitive. Combine this with the fact that its content suppliers are becoming direct competitors in the online streaming business and Netflix is in significant danger of having its growth trajectory derailed.

Netflix is able to offer its customers a flat monthly fee for services, no contract requirement, no late fees, a large variety of television shows and movies, in a convenient way, at a reasonable price.

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.

First of all, it offers a “prepaid subscription service” that allows customers to simply subscribe and pay a fixed fee per month. This gives the customer the ability to rent unlimited movies, something never heard of in this industry. In addition, customers are also worry-free about returning movies late since Netflix did away with all late fees. It must also be stated that in contrast to other companies that offer subscription based services, Netflix has made it relatively easy to unsubscribe from the packet or service the customer has selected. One may think this is a poorly thought idea, but it has helped customers return. These returning customers are satisfied and

Netflix was founded by Reed Hastings and Marc Randolph in 1997 and was originally based out of Scotts Valley California. The business model that they were working towards was to create a company that would offer online movie rental service made available by streaming media as well as DVD’s that could be ordered online and delivered to the customers’ homes. (Wheelen, Case 12). Netflix had a strategic plan to undercut the competition in an effort to stress the market and force weaker competition out of the field. This was a very successful plan and over a period of years it was able to force the closings of most of its competing market to include the mega giant Blockbuster video. Using a business

Netflix is recovering from one of the worst self-inflicted corporate marketing gaffes in years. After years of offering an excellent value to customers purchasing its unlimited single DVD and streaming services for only $9.99 a month, Netflix unexpectedly announced that it would be completely separating its DVD service from its streaming service, causing a price increasing of 60% to $15.98 for customers who wanted to keep both services. Overnight, Netflix angered many of its very loyal customers and lost over 800,000 of its 24.6 million members due to the debacle [1]. Adding fuel to the fire, Netflix decided to actually create separate brands and separate websites for the two services, keeping the Netflix name for its streaming services