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Netflix case study
Proposed strategies for netflix
NETFLIX research introduction
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Introduction
Netflix is a video stream/rental organization that offers various plans depending on the need of consumers, from DVD rental though the mail, to live streaming of television and movies on consoles, smart TV’s and mobile devices. Netflix recorded a total asset value around $13,586,610 as the end of their fiscal year of 2016, while also being a publicly traded organization. Since 1997 Netflix has been mentioned as the cause for most video and game rental organizations going out of business and almost none existed. With over 92 million subscribers, and having an influence in over 190 countries allowing those countries access to over 100 million hours of videos, Netflix is the world’s leading in the internet television provider. Netflix
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These competitors, all offer similar video streaming servicers, that can be slightly responsible for customers of the cable and satellite services being leaving in favor the cost effective video streaming television, when only an internet service is needed. I recently stopped my contract with Direct TV in favor with Netflix, due to the amount of new shows offered as well as me having the ability to watch sports and such on the internet as well. This decisions saves me roughly 150 dollar a month. In regards to the market share, for American households, Netflix is leading these competitors with 36%, while Amazon is ranking 13% and Hulu with a low of 6.5% (Moskowitz, D., …show more content…
In 2014, the total amount of memberships that used the steaming options was 57,931, with the end of 2016 that number has increased to 93,796, providing a difference of 35,865. While these numbers are international, it is still a huge increase for Netflix. The memberships between 2014:5,504,656 and 2016:8,830,669 resulted in difference in revenue of 3,326,013. The consolidated revenues for the fiscal year of 2016 increased since the previous year of 2015, due to the increase of average paying streaming members over the globe. The majority of the growth of members was international, due to the expansion the organization and focus as an internet TV network. The growth of memberships has an impact, however it was coupled with the increase in streaming revenue per the paying membership, which then resulted plan mix, price changes to offset the difference in foreign currency. The difference in currency caused a fluctuation thus impacting the international streaming segment (Netflix, 10-k,
Two of the top alternatives to satellite tv or basic cable are Netflix and Hulu. I have been a member of both online streaming services for the past four years. I have dedicated much of my free time and studying time to these two services. Both services have gained many subscribers and make the need for satellite tv almost obsolete. It would be hard for me to only have one of the services as they both are strong services in their own way,
A critical SWOT analysis of Netflix’s social media techniques clearly shows they are ahead of the game and not backing down from rising competitors like YouTube which is gaining viewers by increasing the amount of online content.
...iding convenience, selection, personalization and a low cost method for product delivery. Netflix posted gross profits for the fiscal year ending December 2006 of 996.7 million and increase of 314.5 million over the prior year. Net income increased by 16.8% during the same period. On February 25, 2007 the firm, hit a milestone when they delivered the 1 billionth DVD.
As advance technology of fiber-optic developed and is on the rise, everyday there is another story about entertaining movies on demand and streaming online is with ease. Those developments which let movie’s viewers sit in the comfort of their home or anywhere with access to the internet can stream instance movies with a push of a bottom. They no longer need to make a trip to the movie’s stores for movies rental and return, so that is why movie shops fail and filed for bankruptcy bring a symbolic close to the “let’s go rent a movie” era. Blockbuster LLC, formerly Blockbuster Entertainment Inc., both owned and franchised American-based giant provider of home movie and video game rental services through video rental stores, later adding movies by mail, streaming online and video on demand. Due to the peak of fiber-optic and competition from companies such as Netflix, Redbox, and GameFly, Blockbuster became the victim of digital media and filed for bankruptcy on September 23, 2010 due to significant lost in revenue.[3]
Netflix says that they do not need to offer as many special bonuses because as the article states” If your employees are fully formed adults who put the company first, an annual bonus won 't make them work harder or smarter" (Nisen). They believe that if they hire people who put everything into the company the pay they offer will be enough. To figure out what they should be paid Netflix went out and scouted to see what people were making in similar jobs. At Netflix they do benchmarking. Benchmarking is when a company compares its practices to the competitors (Noe489). Netflix also realizes that there workers can be scouted. So instead of getting mad they tell the people to talk to the recruiter see what they will pay them then tell the HR department because to them that information is very valued and it may end up helping in the end (Bear).
Since any other form of entertainment is considered a substitute, Netflix?s industry is in direct competition with all other forms of entertainment, whether it be reading, physical exercise, regular television, etc. If trends in popular culture move away from those related to movies, revenues may be affected.
As the firm moves forward, top managers must pay attention to staying unique to sustain a competitive advantage. Netflix does not own their content, nor do they have any tangible assets. Netflix is a part of a broad range of network users. As technology continues to grow exponentially, Netflix will have to be readily adaptive to change and innovation. Technology never stops growing and evolving, therefore, Netflix’s business platform should never stop growing and evolving. At the same time, they must be careful to remain user friendly and customer centric by keeping the technology at a level where users will not have to obtain a certain set of technological skill sets.
From its inception, Netflix has become a business based on superior customer service and has subscribed its business to the market marketing management philosophy. The main purpose behind Hasting’s idea of a better way to rent and enjoy movies was how to provide that service to their clients and not have any late fees. In other words, their customers could enjoy their rentals from Netflix for as long as they wanted, and they would never have to worry about late fees again, so long big movie rental chains! This aspect alone of Netflix’s marketing plan indicates that Netflix has based their marketing plan on market orientation, “a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product,” (Lamb, 2009, p.7). Many companies that take on this philosophy are said to implementing the market concept. The marketing concept states: “The idea that social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting orga...
• Grow followers of Narcos social platforms: Narcos saw a follower increase of over 50%, which can be largely attributed to this content series. Netflix added approximately 3.57 million subscribers worldwide, 55% over their target. Narcos Season 2 was named by the CEO as one of the biggest factors of the company’s success in his shareholder address. Narcos was registered as the number one digital original in most major markets in the US, including the UK, Germany, France, Italy, Brazil, Canada, Australia, India and China: • Narcos: Season 3 — 27.2 million (September 2017)
The twenty year journey of Blockbuster has not been without bumps, valleys, road blocks, and detours. Blockbuster has come under legal fire from Netflix, a major online competitor, the Free Trade Commission for attempting a host...
The Netflix brand is so established in today’s age that “In the first quarter of this year, the number of US Netflix subscribers overtook the number of American cable TV subscribers for the first time, according to a recent study by Leichtman Research Group charted for us by Statista,” simply due to unique selling proposition of
Streaming video content over the internet continues to grow in popularity with consumers for a variety of reasons, including the widespread availability of high speed internet, attractive video content, easy to use video streaming devices and the rising cost of cable television service. Some consumers use streaming video to enhance or supplement the typical offerings available from their local cable provider. Others take a more extreme approach and use streaming video as a means to eliminate the need for a cable television subscription altogether. Presently consumers cancelling their cable TV subscriptions are still considered a minority of all subscribers; nevertheless their steadily increasing numbers have earned the moniker of “cord cutters.” Those looking to ditch cable TV can also find a growing number of online resources that will ease their transition to cheaper online television viewing.
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
The idea inspired Reed Hastings and Marc Randolph, and then they founded Netflix in Scotts Valley, California in 1997 (Netflix, 2014). The company comes into play by developing a subscription-based streaming platform for movies and television shows. Unlike the traditional movie rental businesses such as Blockbuster and Redbox, Netflix’s innovation offers service via Internet, and it does not have any physical stores but instead delivers DVDs through postal mail in the U.S. Since then, Netflix has become the world’s leading internet television network with constant growth of customers to over 48 millions members in more than 40 countries in the North America, Europe, and the Latin America (Netflix, 2014). In this analysis, the main focus is examining the current market environment for Netflix. It identifies the type of market structure that Netflix is currently competing. The analysis also expands on the competitions, product differentiation, pricing strategy, and measuring the level of easy entry-and-exit.
...mpetitive and it is difficult in order to make greatly effort for the company to keep up its competitive advantages. In addition, the company now already has global brand name and customer loyalty as well as reasonably healthy financial situation after recovering some its mistakes. Netflix could build up further its strategic plans through several viably emerging trends in the marketplace such as network neutrality, video gaming along with transmedia properties and second screen engagement. As mentioned, video games and second screen engagement could be good choices and opportunities for the company to be ongoing health in long-term. However, it should also be noted that Netflix must be committed to take action in the greatest way appropriate to international expansion approach, meeting the challenges forward and finally come out on the top of the ladder once more.