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Market segmentation of Netflix
Competitive strategy of netflix
Opportunities and threats for Netflix
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KEY SUCCESS FACTORS
Technology
Technology is the most important factor to thrive in the market. Technological advancements will help lower the operational costs for Netflix. However they need to have great content quality. Innovation stands out in their technology. As long as there are innovative strategies executed, Netflix will be equipped to handle fierce competition. Netflix’s success will depend on its product differentiation and content quality, provided with its innovation, high quality and performance delivery. The industry will move towards mass customer distribution and the profits can be achieved by more subscriptions. (Paramesh 2013).
Distribution
In order to be successful at an online market, Netflix must have an efficient distribution network that allows fast delivery of DVDs. The future of content delivery is through streaming. According to Netflix CEO Reed Hastings, “Over the coming decades and across the world, Internet TV will replace linear TV. Apps will replace channels, remote controls will disappear, and screens will proliferate. As Internet TV grows from millions to billions, Netflix, HBO, and ESPN are going to lead the way”. (Hastings 2013)
As the Internet gets faster, more available and more reliable, Internet TV will grow exponentially. According to Hastings, this will be achieved by every TV will have Wi-Fi and apps. Smart TV adapters (Roku, Apple TV, etc.) will get more powerful and less expensive. Tablet and smartphone viewing will increase. Tablets and smartphones will be used as interfaces for Internet TV. Streaming Ultra high definition (4k) video will happen before the linear TV supports 4k video. Most important advancement is going to be in Internet video advertising. It will be personalized an...
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Rates." Digital Trends. Digital Trends, 1 Feb. 2013. Retrieved from Web. 07 Apr. 2014. http://www.digitaltrends.com/web/pressured-by-google-fiber-time-warner-ups- speeds-slashes-rates/#!C023g
Hardy, Robert. "Netflix Expanding into Original Movies? Here's How It Could Affect Independent Filmmakers." No Film School Netflix Expanding into Original Movies Heres How It Could Affect Independent Filmmakers Comments. Nofilmschool, 30 Oct. 2013. Retrieved from Web. 13 June 2014. http://nofilmschool.com/2013/10/netflix-expanding- original-movies-independent-filmmakers/
Shields, Mike. "First Netflix and Amazon. Now Yahoo to Get Into TV Programming Game." CMO Today RSS. The Wall Street Journal, 05 Apr. 2014. Retrieved from Web. 06 Apr. 2014
http://blogs.wsj.com/cmo/2014/04/05/yahoos-plans-for-tv-splash/
The average Blockbuster store carries roughly 1,500 movie titles. Netflix carries more than 12,000 titles. It has movies that you can't find anywhere else. And Netflix uses collaborative filtering technology to send you emails that alert you to movies that you might otherwise never consider. Netflix saw the video- and game-rental market moving to DVD and built its business around that trend. Netflix doesn't rent videocassettes, only DVDs (in part because they're lighter and cheaper to mail). Netflix was able to identify and implement a strategy fo...
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.
Netherby, Jennifer. “Pressure on Netflix” Videobusiness.com. 29, January 2007. United States Securities and Exchange Commission. (2006). Form 10-K: Net flixr, Inc. Annual Report. Washington, D.C.
In this case study we will gain a better understanding of TiVo, Inc. and how it has struggled to find success in a market they are known to be the innovator. At this point there are very few television viewers in North American that do not know what TiVo does for TV viewing. However, most consumers do not know the history or struggles this company has been through since creating the product in the late 1990’s. After reading this case study it is clear the creators of the TiVo were visionaries but it is also clear they were not business people too. Sadly, this might be the eventual demise of the company that clearly had the market in the palm of their hand. We will examine some of their flaws and how TiVo might regain some of the momentum to become a profitable organization.
In this paper I will discuss how Blockbuster video became bankrupt to its competitor Netflix. In 2000, Reed Hastings, the founder of a fledgling company called Netflix, flew to Dallas to propose a partnership to Blockbuster CEO John Antioco and his team. The idea was that Netflix would run Blockbuster’s brand online and Antioco’s firm would promote Netflix in its stores. Hastings got laughed out of the room. We defiantly know what happened next.
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.
Netflix - Watch TV Shows Online, Watch Movies Online. (n.d.). Netflix. Retrieved March 13, 2012, from https://signup.netflix.com/MediaCenter/Timeline
27 Jan. 2012. Greenblatt, Alan. “Television's Future.” CQ Researcher, Vol. 17 (2007, February 16): 145-168.
The Digital Video Recorder used in modern entertainment systems can now be replaced with an easy to use streaming video devices. As the online video libraries grow to include more content, eventually streaming set top boxes will provide this functionality, without the need to schedule recordings or manage space used by previous recordings. One additional advantage, often referred to as TV Anywhere, allows viewing of online content from a variety of devices, as long as an Internet connection is available. Now the real motivation that drives many Americans to consider these alternative options is money.
...a remarkable opportunity to grow in the industry and lead as an innovative provider, Netflix has much opportunity to satisfy its customers and maintain their attention with their revolutionary business growth (Martala, 2009). Their success goes beyond their product. As stated, it is a combination of their culture of high performance drivers and fosters the “freedom and responsibility” mindset (Elliott, 2010). Because of their innovation and gradual entry into the market, Netflix has the competitive advantage to add layers of products for growth for years to come. Currently, Netflix has the competitive advantage to increase price and retain their current customer base. Even more beneficial, is the opportunity to attract additional subscribers with their new features. To end this, combining their products, price, culture, and strategic plan makes Netflix innovative.
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.
In conclusion, the vast technology change opens many opportunities for Netflix to grow. By assessing the market environment and challenges, it enables Netflix to overcome the obstacles to remain as the market leader. To achieve the future growth, Netflix should implement both strategic and tactical approaches to compete with others. The strategic and tactical business plans for Netflix are improving content libraries, developing more partnership with production firms, and staying with the low-pricing strategy.
1) Netflix’s currently does not have a user-friendly method for customers to stream videos onto television sets. Netflix is entering agreements with the manufacturers of game systems, Blu-ray disc players, and televisions to include software capable of streaming Netflix videos. 2) There is strong competition with other companies that offer video streaming at no extra charge. Additionally, Netflix and its competitors are attempting to enter the digital world.
Netflix was established by Marc Randolph and Reed Hastings in 1997 in California. Initially, the company offered a DVD-by-mail service for a monthly, flat rate subscription fee. Videos were sen...