Founded in 1997, Netflix has evolved from its original business model as a mail-order DVD rental business that provides customers with blockbuster hits for their home entertainment needs. The premise of Netflix, founded by Marc Randolph, was to rescue customers from late fees…
As a result of this rapid success, Netflix began to create alliances with movie studies, such as Warner Home Video, that provided both partners opportunities for sharing revenues. As a result of these agreements, the company released its IPO for shareholders in 2002, as a company that could sustain growth and remain profitable long-term. With new capital availability as a result of having publicly traded stock, Netflix was now in a substantially sound financial business that provided opportunities to expand the business model. Today, Netflix provides customers with a flat rate membership of $7.99 USD per month, with the ability to rent DVDs and view streaming video content. Ease and convenience of using credit cards via Internet sales channels now gives Netflix immediate revenues that improves services and expand the vastness of its online movie libraries.
This report explores the strategic position of Netflix, offering a full strategic appraisal of the company between the years 2010 and 2014. The investigation consists of analyses of the firm’s competitive strategy, performs an internal and external market analysis, determines the key strategic issues that have faced the company, strategic growth options for the company, and a description of the most relevant and viable strategies for improving the market performance of the firm long-term.
Netflix operates in four key markets: DVD by mail, streaming video content subscriptions, original television programming, and video game rentals. The firm’s original market entry strategy for DVDs-through-mail was as a pioneer in this service concept in the United States, as a differentiator, giving the company a consumer-perceived uniqueness for providing convenience without having to visit a bricks-and-mortar rental company. Kalyanaram and Gurumurthy (2008) iterate the pioneers have tremendous ...
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So suppliers is a strong force influencing the company’s business. Netflix delivers its goods and services directly to the end users, whose purchasing decisions are very dependent on personal preferences and many other environmental issues, so the demand is rather volatile.
By July 2010, the company was carrying out large-scale renting of DVDs and TV episodes over the mail service and through its movie stores. Before the year 2010, Netflix’s revenue grew at a constant rate with the highest annual growth rate reaching 27%. Between 2004 and 2007, Netflix’s revenue grew from $500 million to $1.7 billion in 2007.
Another key element to video rental business is fast delivery of rented DVD’s. As for NetFlix’s, delivery channel, they proudly claim 98% on time delivery on orders. The third and the most important niche required to become a market leader in this business is low cost of subscription.
1. Watching movie by subscriptions- Netflix had set up a strategy by providing as many as eight subscription plans to its customers (Thompson 282). The most successful plan was its $8.99, $13.99 and $ 16.99 where the customers could avail all its movies in its
connectivity is the biggest trigger that boosted the business of Netflix as the company altered its business strategy as the internet connectivity got better and convenient for the users. At the time the company was private and had limited resources, it could barely serve the
The entire case has been studied and recommendations have been presented to discuss alternate measures which can take place.
The company analysis of Netflix can be done by analyzing the position at which the company stands. This will enable
Netflix provides a full scope of entertainment for its users as the subscribers have the option of pausing and resuming the programs as and when required without any interruption by commercials (Netflix Inc., “Overview”).
The report will outline a strategic
14 Pages(3500 words)Case Study
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