...Duane Lefevre Netflix Case Analysis Summary To “Netflix” is fast becoming a common word in today’s society. Everyone knows it, because it is very famous for its service of online movie. It has replaced the traditional DVD rental store and all the rental process can be done through internet with a higher image quality. Reed Hastings incorporated in 1997 and starting movie rental service in 1999. In 2012, there was already over 23 million subscribers and more then 120,000 titles available for online streaming, majorly competing with Hulu Plus and Amazon prime instant video. Analysis Porter five forces analysis The Porter’s five forces model is often used to analyze companies’ level of competition within an industry and business strategy. The rivalry among existing competitors is intense. There are a large number of firms in the movie rental industry and the competition is very high. Several methods for consumers to choose from in-store rental, online rental and mail delivery or video on demand and low level of product differentiation also increase rivalry. There are low switching cost which also lead to aggressive competition and comparable product can be found at many different places. In brief, Netflix major competitors have large levels of capital and also achieved economies of scale. The threat of new potential entrants of Netflix is soberly low...
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...Google, the world's most powerful brand, endeavors to purchase Netflix, the largest U.S. based online movie rental service provider. This acquisition is consistent with the Google focus on improving how people connect with information. The acquisition will address a strategic opportunity to deliver more diverse online content to the world, where the graphical and video display-ad market is estimated to grow to $200 billion (Efrati, 2012). It will also further build on the expansive Google acquisition model strategy and use of capital (Rosoff, 2012). Google enjoys proven success and market dominance in online advertising. With its graphical and video advertising successes through its YouTube platform and thousands of other sites, the company has established a significant competitive advantage in the market of display-advertising. With Netflix, Google would leverage its ad expertise to pair advertisements with video search requests and video themes/genres. This acquisition will continue the Google growth model of winning loyalty across every facet of the internet experience which translates into "overall time spent on Google services,[...]more time (for consumers to be) exposed to ads, [and] increased brand loyalty (Young, 2011). The acquisition would provide a diversified monetization model of membership/fee based service which provides strong direct customer and revenue competition to Hulu (streaming video currently offered only to users in Japan and the USA and its overseas...
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...Netflix Executive Summary: This paper represents an overall analysis of Netflix (http://netflix.com). Netflix is one of the leading internet television networks with over 62 million subscribers in 52 countries (Netflix, 2015). It provides customers with online streaming for movies, TV shows, documentaries, songs, other digital media, and offers DVD and Blue ray rentals (Wessel). This paper will review the negative and positive points that Netflix is facing in the industry through: 1- Industry analysis (Macro analysis) 2- Competitive Analysis (Porter’s model) 3- Alternative considerations 4- Strategic recommendations Industry Analysis (Macro Analysis) Netflix is focusing on three major points regarding its industry: a- Shifting demographics within the United States b- Expanding its market to other countries like Brazil, Russia, India & China (ResearchOmatic). The shifting in demographics in the United States focused mainly on age distribution and racial diversity (ResearchOmatic). There was approximately 13.5% increase in the population of age 65 or higher, the Hispanic population increased by 15.8%, & Asian population went up to 10% within the years 2004-2008 (ResearchOmatic). On the other hand, Netflix has expanded and still expanding into other countries in the world: “Canada became the first foreign country to have live streaming on demand in 2010. Netflix entered the Dutch market in 2013; Latin and South America and the Caribbean in...
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...Introduction 2 Part 1: External Analysis 3 1.1 Macro-Environment Analysis 3 1.2 Industry Analysis 4 Porter’s Five Forces of Competition Analysis of Netflix 4 1.2 Opportunities and threats (Partial SWOT) 5 Part 2: Internal Analysis 6 2.1 Value Chain Model 6 2.2 Competencies Framework 7 2.3 VRIO Framework 8 2.4 Strengths and Weaknesses (partial SWOT) 9 Part 3: Netflix Issues and Challenges……………………………………………………………………………………………..10 Part 4: The selection of strategic options 11 4.1 Strategy Clock model and the Porter’s Generic Strategy Model 11 4.2 Strategic Options 12 Part 5 – Conclusions 14 References 15 Appendix 17 Introduction Netflix, set up in 2000, is a television show and movie rental Company. It slowly became a leader in this field by offering DVD-by-mail and online video streaming services. It provides a subscription based model. According to this model the customers utilize the products and services of Netflix through a monthly fee rather than a pay as you use rate. Netflix has been expanding its reach of providing services to other geographies with its two service lines to places like the UK, Ireland, Canada, Latin America and the Caribbean. Among the Porter’s generic strategies, Netflix has adapted the Differentiation/Cost Leadership strategy as their target customer base is broad and they also provided to renters a low cost alternative to the otherwise traditional video rental stores. The major stakeholders of Netflix are the content owners who...
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...Leadership and Governance. Manoj Kumar Raju Kalidindi. Table Of Contents : 1.Introduction.........................................................................................................................3 1.1 Pure Software to Netflix................................................................................................3 1.2 Strategic and Behavioural changes................................................................................4 1.3 Netflix's Attitude...........................................................................................................4 1.4 Applications and Conflict styles...................................................................................5-6 1.5 Epix Deal.......................................................................................................................6 2. International Market...........................................................................................................6 2.1 Improvements................................................................................................................ 6 3. Leadership Paradigms........................................................................................................7 4. The Big Five......................................................................................................................7-8 5. Iowa Principles practise.............................................................
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...influence their own televi-sion program. Most TVs have the ability to install applications, like Netflix. Older screens can be updated by a small hardware player to get this capability. Usually living room video entertainment is done by traditional companies like the RTL group. The customer can switch the channels, but is not able to choose his program by a remote click. Netflix is the pioneer and market leader in the US in streaming and offers shows and movies by video on demand. New streaming companies will mix up the tradi-tional market. A kind of quantum leap infects the television screen. The conver-gence of technologies combines an internet stream on the classic television. Traditional companies, like RTL, should consider following a different another strategic management course than for example Netflix. This assignment analyzes the streaming market, the forces, threats and opportu-nities as a Macro Environment Analysis. It’s a fast growing business and has a huge potential. The company Netflix is screened by a Micro Environment Analysis to show their portfolio and key figures. In the targeting and positioning part, a possible way of a strategic corporate management is developed, by references on the analysis of Porter’s three generic strategies, Ansoff and Mintzberg. For the final conclusion the current strategy will be investigated and opportunities are shown. Netflix has still some unexploited possibilities to maximize the profit and demonstrate also their market...
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...Netflix Netflix was founded in 1997 in Scotts Valley, California, USA by two entrepreneurs named Reed Hastings and Marc Randolph. In its early days, Netflix offered unlimited movie rentals to its subscribers without due dates for a flat monthly fee with no per title rental, shipping or handling fees or late charge fees. In 2007, the company introduced new business model based on video on demand via the Internet, which was considered by some to be a departure from its original business model of movie rentals. With video streaming, online DVD and Blue-ray Disc rental tripod and with a global streaming subscribers of over 50 million, Netflix reported a revenue of US$4.37 billion US$112 million of which being net income and a total asset of US$5.4 billion in 2013. The company estimates its total equity to be US$1.33 billion and it has over 2000 full-time employees (www.netflix.com). Netflix’s vision as expressed by one the co-founder focuses on global distribution, licensing entertainment contents across the world, market accessibility for film makers, and finding global audience for content creators. (10K Item 1). It’s mission emphasizes growing global streaming subscription business, continuous customer experience improvement, enhancing user interface while at the same time remaining profitable. Mission. Netflix core values revolve around judgement, productivity, creativity, intelligence, honesty, communication, selflessness, reliability and passion. Tepper (2014)...
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...Netflix Netflix Inc. had its start in 1997 when it was incorporated by its current CEO and founder, Reed Hastings. It was not until 1999 that Netflix finally began to rent movies to its customers. At its origin, Netflix was a DVD rental service that only rented through the mail. With this type of service, customers would pay a membership fee that determines the number of DVD movies that they were allowed to rent at a given time. Once the customers would choose their desired movies, the DVD’s were mailed to them and then returned whenever the customer finished watching them. In 2007, Netflix introduced the concept of streaming on-line videos to its customers which allowed for instant access to their inventory that was formatted for such viewing. With the on-line streaming, they were still offering their original DVD service through the mail. Netflix introduced this new service in the attempt lower their overall costs that was brought on by paying for the shipping and handling of the mailed DVD’s. In 2010, Netflix introduced only their on-line streaming service internationally to over 43 countries. In 2011, it was announced that Netflix would stop the combined services of streaming and DVD rental and instead offer these services in separate subscriptions. Their customer base was displeased and the company’s stock prices had experienced a major drop in a short period of time. During the same year, Netflix sold a portion of their stocks to mutual finds causing their stock...
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...Netflix Domestic Strategy Prepared for: Netflix Senior Management Reed Hastings, Co-Founder and CEO Kelly Bennett, Chief Marketing Officer Jonathan Friedland, Chief Communications Officer Bill Holmes, Chief Business Development Officer Neil Hunt, Chief Product Officer David Hyman, General Counsel Patty McCord, Chief Talent Officer Ted Sarandos, Chief Content Officer David Wells, Chief Financial Officer August 4, 2012 Through this report, our consulting team has taken the opportunity to analyze and provide recommendations for future domestic business strategy of Netflix. As expressed in the company’s founder’s conference last October, we would like to help you build upon your stated vision for the future including: • Becoming the best global entertainment distribution service • Licensing entertainment content around the world • Creating markets that are accessible to film makers • Helping content creators around the world to find a global audience We would also like to follow the nine values you use to guide your company: • Judgment • Productivity • Creativity • Intelligence • Honesty • Communication • Selflessness • Reliability • Passion In this report, we will address the following issues to provide a foundation for overcoming Netflix’s domestic challenges: I. Competitive Dynamics A. Key Competitors B. Competitive Response II. Strategic Management/Competitive Issues A. Key Strategic Issues B. Strategic...
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...(CEO of Netfix) founded Netflix in 1997.Netfix Business is based on DVD rental and TV Streaming. During this time, Netflix offered DVD rentals by mail. As Netflix went public in 2002, shortly a year later their subscription reached the one million mark. Recently, Netflix is recognized as one of the 50 most innovative companies, ranking number eight for “streaming itself into a $9 billion powerhouse” with 20 million subscribers. This success shows how he embraced a business approach where their mission was to take the troublesome experience of everyday consumers and transform them into a business opportunity. Hasting previously owed a company named pure software but later on sold it and get complete focused on Netflix. This report differentiates the leadership styles used by Hastings in Pure software and in Netflix. It also focuses that communication, conflict management styles & feedback play an important role for Netflix to be one of the successful company. Table of Contents Introduction1 Hidden principles and facts related to Hastin1 Recommendation for Netflix to increases delivery services7 Analysis and leadership paradigm7 Hastings Big Five model of personality leadership traits 8 University of Iowa leadership styles 9 Power, organizational politics, networking, and negotiation 10 Conclusion11 References 12 Introduction Netflix is a video streaming and DVD rental service that is widely used by 23 million people worldwide in March 2012. (Statistics Brain) Originally...
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...Bentley University McCallum Graduate School of Business Administration GS601-100 Strategic Information Fundamentals Spring 2012 Syllabus & Schedule as of January 3, 2012 Professor: Dennis Anderson Office: Smith 402 Email: danderson@bentley.edu Office Phone: 781 891 2238 Class Times: Section 100: Monday, 7:30 - 9:50 pm Office Hours: For quick/easy questions, send me an email. For tough questions, career advice and other matters, face to face is better, and I’m happy to meet with you by appointment. Description: GS601 provides an enterprise-wide perspective on the management of information technologies (IT), software applications and the operational processes they support, and the data and knowledge that inform business processes and decisions. The course focuses on how IT professionals and non-technical managers work together to ensure that applications and data are aligned with organizational strategy and business processes. The cases and readings examine how companies in various industries use IT to serve customers well, manage operations efficiently, coordinate with business partners, and make better business decisions. A key theme -- IT as a double-edged sword -- reflects a central challenge: how to maximize the strategic benefits of investments in hardware and software, while minimizing accompanying technical and business risks. The course places equal weight on technical and managerial skills. Our primary objective is to...
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...Strategic Plan Strategic Plan ------------------------------------------------- ------------------------------------------------- Netflix: Strategic Plan Prepared by Carlos Contreras Jasprit Dyal Jessica Hoeschen Francisco Solano-Downs Yen-Chen Wang Prepared for Dr. Gary Wishnjewsky Date submitted August 22, 2013 Seminar in Strategic Business Management Department of Management California State University, East Bay at Hayward, CA Management - 4650 Industry Analysis Relevant Industry Trends Netflix falls under the broad umbrella of the movies and home entertainment industry. The company has been part of the wave that is taking this industry into the future in terms of how consumers are interacting with home video entertainment in particular. In general, we can observe that consumers are increasingly demanding more instant and personalized experiences when watching video entertainment as well as more mobile availability. There seems to be a “when I want it, how I want it” type of movement among consumers with declining interest in DVD’s and scheduled television programming and increasing use of online streaming or rental alternatives. Netflix is catering to these trends with its streaming service and seems to be well positioned, at least for now, to be successful in the future if it can manage to avoid more strategic “missteps” along the way. It is important to note how the public perceives and values films as an entertainment source here in...
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