Netflix Case Study

Company History and Background

Netflix is a provider of streaming films and television series. Netflix started as a DVD-by-mail service in 1998. Its founders are Reed Hastings Marc Randolph among them Reed Hastings is CEO. The company started it business originally only as a DVD-by-mail service. DVD’s were mailed to the customer and then returned by the customer when they had completed viewing.

The company began streaming services along with the DVD-by-mail option in 2007. It started the steaming option, with 2,000 content available for instant-watching via online streaming and around 20,000 content by end of 2010. The primary goal for this transition was to minimize costs by giving the subscribers option to switch to online streaming. It would save company millions in postage, shipping and inventory and storage of physical DVD disk. Netflix came it mass public attention in 2010 because of an effective business model changes, which is to be the largest and most popular internet subscription streaming service around the world. The major business objective was to hold the current subscriber and gain new customer by giving them more option and content to stream online from the comfort of their home. With having huge response and success in US in 2011 Netflix started its online streaming service in 43 countries around the world. In recent years’ people all around the world has access to high speed internet service. Because of that Netflix service have grown all over the world.

From the beginning Netflix didn’t start with an official corporate mission or vision statement. But after its initial success and huge popularity CEO Reed Hastings come up with a vision and mission that will effect it business policy in near future. In his statement he mentioned some important business objective. Among them becoming the best online worldwide online streaming entertainment service, offering the best and most content around the world, helping filmmakers and content creators around the world to create multicultural content to find and gain global customer. At the same time Netflix has announced its company value which are productivity, creativity, judgment, intelligence, honesty, communication, selflessness, reliability, and passion.

In this global market Netflix has various risk factor to consider and handle it efficient to compete with its competitor and meet its goal to become online entertainment leader. There are many risk involved, among them raising contents cost, reliability of the customer, availability of online content, pirated content, inefficient device and constant need for need for strategy improvement.

In order to have the clear understanding of Netflix it is important to analyze the internal and the external resource and strategy that the company is using to meet their goals and achieve objective.

Internal Analysis

Strategic Resources

Netflix introduced a unique strategy new to the business and unknown to the competitor that gave them the upper hand and advantage over competitor which made the firm today one of the larger, popular and most successful online movie streaming services in the US and around the world. Their major organizational strategy includes:

Wide verities of content like TV series, movies, drama, action, documentaries for various age, race, nation, and demographics.

Constantly offering new and exclusive content form top entertainment providers such as Showtime, Time Warner, Disney, and much more.

User-friendly interfaces for the website, app and mobile phone to give customers best experience to use Netflix service. Use of IT technology to identify what kind of movies they want to watch and customers also have the ability to customize their own screen to fit their need, desire, and schedule. It also provides an automated recommendation of the content to customers based on their previous views history.

Providing options for subscribers between SD and HD streaming.

Provide options for between and combination of online and mail DVD service.

Effective promotion to convert US subscribers to streaming and worldwide brand popularity.

SWOT Analysis

Strengths

Netflix's main competitive strength is its huge Popularity. Netflix has 53.1 million members worldwide. It has huge popularity globally. Technology is one of the biggest strength Netflix enjoy. Everyone knows the company's name, and the association is generally positive Netflix strengths. It’s pricing $7.99 all you can watch is a great strength. It's huge content and of movie, TV show, documentary, and many more category is unmatched to another competitor. It has licensed an increasing amount of content for the streaming platform and looking to increase the amount of content. Netflix has developed user-friendly apps for various Internet-connected devices, including televisions, computers, and mobile devices that other competitors are struggling with. People still watch movies in old school way, renting DVD and Netflix has that option for them too.

Weaknesses

Competitors have advantage internationally and International Business Not Yet Profitable. Content availability is a weakness for Netflix. Unlike Time Warner company doesn't own many shows. Less variety within categories of the content. Because the licensed content are very expensive so Netflix might have to take lots of debt for buy those licensed show. Because of online stream Netflix totally depend on of internet provider. Internet speed, data usage and reliability of the internet connection determine Netflix usage. A customer with the poor internet connection can be at great risk. So the quality and reliability of the streaming depend on of the net provider. Netflix doesn't have a streaming box like apple TV or amazon TV, so considering the streaming box can be a weakness.

Opportunities

Develop online TV device like apple TV or Roku to engage customer solely with Netflix service. Netflix is not yet profitable in the international market. International market can be a great opportunity. DVD is proven to be the loss sector for many times for Netflix operation. And it is becoming very difficult to compete with Redbox. So get replacing DVD can be a great opportunity. Ability to pay content