Netflix Swot Analysis Essay

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 does not allow customers to watch all released movie on demand. There are some movie that customer cannot instantly watch. If Netflix developed streaming service and figure out a problem of coexisting between rentals and streaming service, Netflix can create competitive advantage.

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.

Netflix, Inc. is a U.S. based leading company that operates as an online movie rental subscription service provider who went public in 2002. Netflix initially started off as a DVD rental service through mail only, then later initiated streaming around 2007 in the U.S., and internationally around 2010. Netflix subscribers can instantaneously watch a series of movies and a variety of TV shows streamed from their website online to users TVs, and other devices. Netflix operates its business through domestic DVD, domestic streaming, and international streaming. Netflix subscribers typically pay $7.99 once per month for unlimited use of the website features. Netflix obtains their streaming’s from Amazon Web Services and other communication delivery networks for their streamed content and direct purchases from a nationwide network of U.S. shipping centers. Netflix Inc., headquarter is at Los Gatos, California. Two entrepreneurs Reed Hastings and Marc Randolph founded Netflix on August

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.

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.

The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in

Netflix was founded in 1997 by Reed Hastings and his fellow software executive Marc Randolph. Even though VHS was more popular than DVDs, Hasting guessed that the DVDs will get popular and this was an opportunity for them to win the market so they attempted a DVD-by-mail rent service which was an idea that Hastings got it from after paying a $40 late fee for Apollo 13 in 1997. This DVD-by-mail rent service without a subscription was not popular, so Netflix launched the subscription service with a free trail for a month on September 23, 1999 and found that 80% of customers renewed after the free trail ended. In 2003, Netflix turned its first profit as well as reached 1million subscribers. In 2007, when Netflix reached more than 6.3million subscribers, they started Internet streaming services. Reaching 20million subscribers by 2012 was the goal set by Hastings but, their lunch in Canada in September 2010 helped them to reach their goal early than they expected. Even more, when the entire movie rental industry experienced an 8% sales decline, Netflix able to increase their sales. Netflix’s first original TV series called House of Cards debuted in 2013 and help them to attain many subscribers as well as revenue. Now in 2016 Netflix has more than 75million subscribers in over 190 countries, which makes Netflix as the world largest online entertainment subscription service.

Founded by Reed Hastings and Marc Randolph in 1997, Netflix began as a monthly subscription service for movie rentals without the hassle of due dates and late fees (“Netflix”). Since their inception, the company has partnered with consumer electronic companies such as Microsoft’s Xbox, Sony’s PlayStation, Apple and other Internet connected devices to stream television shows and movies from the comfort of one’s own home. Netflix is currently available in four continents and yields over fifty million members globally. Using the seven main features of ecosystems as illustrated in Chapter 2 of GHL we

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

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.

Many of their competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than Netflix does. Some of their competitors have adopted, and may continue to adopt, aggressive pricing policies and devote substantially more resources to marketing and Web site and systems development than Netflix does. The rapid growth of their online entertainment subscription business since their beginning may attract direct competition from larger companies with significantly greater financial resources and national brand recognition. For instance in 2003 the extremely wealthy Wal-Mart used their online site to launch an online DVD subscription service, Wal-Mart DVD Rentals. With increased competition reduced operating margins may result as well as a loss of market share and reduced revenues. In addition, our competitors may form or extend strategic alliances with studios and distributors that could adversely affect our ability to obtain titles on favorable terms.

Even though Netflix is successful in revenue and expanded globally, it is vital for the organization to create a SWOT analysis “which stands for a company 's strengths, weaknesses, opportunities, and threats (Abraham, 2012). Netflix does have a competitive market such as Amazon.com and Hulu that are becoming more popular with their lower monthly pricing. They also have a more simplified catalogue of consumer favorite new titled movies and TV shows. In order for Netflix to stay competitive with a strong strategic plan, let’s take a look at the SWOT to identify what the best course of actions would be to increase and/or sustain the current procedure for the benefit of the company, its employees and the satisfaction of it consumers.

This essay will provide insights and sufficient background to understand Netflix’s success and difficulties the company is facing.

Starting off as a mail-only service in August of 1997, the service rapidly bloomed into an online, paid source for thousands of movies, series, and other TV shows. Although their streaming option is the most favored, Netflix still offers users the opportunity to order DVDs and other forms of tangible movies. All in all, Netflix holds a multitude of positive and negative effects on society, both which include instant accessibility, immediate forms of entertainment, binge-watching, and unproductivity. Lastly, Netflix may soon become an overwhelmingly large company that takes the television and video distribution industries by storm due to its growing popularity and its ability to be cheaper than regular cable