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Netflix - Case Study Example

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NetFlix has near zero rental charges for its subscribers and that is what sets it apart from its rival firms. Having satisfied the 3 basic criteria’s for successful business, this paper is aimed at examining what were the possible driving forces that led to such good market standing of the company. Along the same discussion we also point out various strategic and competitive challenges that the firm might face in near future and suggest means to minimize the impacts of those threats. Introduction At the onset, Netflix started off as a DVD rental provider that used internet to take orders. Subscribers made their selection over the portal and mailed in their orders. The DVD’s would then be delivered via mail. The entire system allowed the customer to keep the DVD’s as long as they wished to, without an extra charge. Netflix derived its major revenue from their subscription plans that incorporated costs of streaming, mailing and renting of videos. As we moved to the digital age, internet streaming and online viewing has caught up. NetFlix has welcomed the change and continues as leader by innovation i9n the video rental market. DVD renting, though, has not lost its value just yet (Hillary, Alex, & Ian, 2009). In this paper, we would analyze NetFlix’s market standing, its business model and its business and marketing strategy using various tools like the SWOT analysis and Porter’s five forces to determine the company’s key success factors and staying strength. Moving forwards, the discussion continues to determine the critical areas that might need immediate attention for NetFlix’s sustenance and also suggest some marketing and strategy recommendations that might prove useful in revenue and subscription improvement. Analysis Strategically speaking, video rental industry is more competitive that an oligopoly or a monopoly. This is believed to be in stark contrast with what the general opinion holds. An industry where instant availability drives the market, the paper tries to analyze what forces have led to success of NetFlix and what could be the possible challenges in the given scenario through various tools (Null, 2003). SWOT Strengths NetFlix is a well established brand and known to almost every Household Extensive and Assertive marketing has etched its name in memories of individuals Competitive Pricing has won the loyalty of the masses. Good relation and strong business with suppliers makes NetFlix, a good name among Video providers. NetFlix and a widespread presence which gives it an advantage due to ease of access. NetFlix has a wide array of offerings in videos, in both TV episodes and movies. The company has been constantly upgrading itself to higher technology and better capabilities. Weaknesses Damaged DVD’s demand a high cost of replacement. This might act as discouragement to frequent video buyers. NetFlix takes slightly longer time to procure and deliver videos. Speed in delivery is the pillar of success in this particular and this drawback could put NetFlix in a fix if it sustains for long. Customers who are not very frequent with movie rentals rarely find something else that might catch their fancy Video streaming fails to include all movies within its program. Opportunities NetFlix could try selecting movies that might have a recurring demand with customers. Such movies could be displayed on their video streaming channels (Lewis, 2001). The company could experiment with creating a collection of movies and TV shows of the subscriber’ ...Show more


NetFlix’s Business Model and Strategy Name of the Student University Executive Summary NetFlix’s business strategy is well aligned to the basic requirement in a movie rental business. They have a wide selection of videos and cater to almost all genres…
Author : hettingerbessie
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