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Netflix case study summary
Netflix strategic position in industry
Netflix case study summary
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Introduction
The ability for marketers to make use of user generated content from social networking sites such as Facebook enhances the chances of developing personalized and targeted advertisements and promotional content to specific customers, thus increasing profitability through acquisition of larger market share and competitive advantage. Targeted, personalized and interactive marketing helps to increase customer retention and enhances customer loyalty making a company’s products and services increasingly irresistible leading to repeat purchases and higher profitability as well as reduced customer servicing costs.
Netflix Incorporated: An Overview
According to Allen & Vicente (2012), Netflix was co-founded in 1998 by Reed Hastings and Marc Randolph. Hastings came up with the idea of disc-by-mail service after he was forced to pay a $40 late fee for a VHS movie rental of Apollo 13. In 1998, Netflix began offering disc-by-mail rental services for $4 per rental plus a postage fee. In 1999, Netflix modified its revenue model from a per-rental charge to a monthly flat subscription charge model that included all shipping fees and abolished the late penalty charges. In the year 2000, Netflix launched its personalized film recommendation system. This system made use of subscriber ratings to predict film choices and preferences for subscribers. In the year 2002, Netflix made an initial public offering (IPO), raising $85 million by selling 5,500,000 shares at $15 per share on the NASDAQ. In the year 2007, Netflix joined Facebook and introduced streaming enabling the subscribers to instantly watch TV programs and movies on their personal computers.
Facebook friends, whether it sells through Facebook or not? What facilities, resou...
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...ilable at < http://www.nealmcdevitt.com/assets/news/Top_10_Social_Media_Legal_Issues_FINA PDF> accessed, March 13, 2014.
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Pletikosa, I., Spiegler, E. D. & Michahelles, F. (2013). Evaluation framework for social media brand presence, Social Network Analysis and Mining 3(4), pp. 1325-1349
VanDyke, D. (2011). Facebook Marketing Secrets. [online] available at < http://www.myezsuite.com/giveaways/FacebookMarketingSecrets.pdf> accessed March 14, 2014
Facebook-Netflix. (n.d.). Facebook. [online] available at < http://www.facebook.com/netflix>, Accessed March 14, 2014.
The development and complete integration of the internet into everyday life has changed the modern perception of communication which, as a result, has changed the playing field for public relations practitioners everywhere. Social media opens new doors into the world of communicating and is undeniably useful for “anticipating, analyzing and interpreting public opinion, attitudes and issues that might impact, for good or ill, the operations and plans of the organization” (Horton, 2011). Through the successful creation of social media campaigns, an organization has the opportunity to create a positive public image, relationship, and lasting online presence that will benef...
This is how Netflix is effectively using its competitors to leverage lead generation to the next level.
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in strategic focus has allowed Netflix to grow into the largest online entertainment subscriptions service in the United States with over 6.3 million subscribers (Netflix).
In the field of low-cost and globally-ambitious Internet subscription services, there are mainly four big competitors, Netflix, Hulu, Amazon, and HBO. In order to win as much of consumers’ time and spending as possible, each of them have different strategies to compete with each other. HBO is an original content firm getting into the Internet subscription business with HBO Go (Moskowitz, 2015). Netflix, Hulu, and Amazon are internet firms with mostly licensed content, all planning their strategy of producing original content.
[1] Halal, Bill. "How NetFlix Beat Blockbuster: An Exemplar of Emerging Technologies." William E Halal RSS. N.p., n.d. Web. 09 Dec. 2013.
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.
Reed Hastings (co-founded) founded Netflix in 1997. 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 (Netflix Management, 2011). Recently, Netflix is recognized as one of the 50 most innovative companies, ranking number eight for “streaming itself into a $9 billion powerhouse (and crushing Blockbuster)” with 20 million subscribers (fastcompany.com, 2011). This success shows how Netflix embraced a business approach where their mission was to take the troublesome experience of everyday consumers and transform them into a business opportunity. Below illustrates how Netflix rank in other categories.
Marketing through Social Media (Exploratory Essay) Throughout the ages there have been many intriguing ways that businesses have portrayed their product or services for accessibility. Recently, businesses have been researching how to market the businesses product through the World Wide Web. With websites such as Facebook, Twitter, Instagram, it started becoming popular within the past 20 Years. People have started to rely heavily on the internet over the past decade, whether it be for searching for information on products or people.
Social media is at the core of many marketing plans for corporations in the United States and world-wide. One of these companies at the forefront of social media use is Wells Fargo Bank, N.A. (Wells Fargo). The ability to directly contact customers and potential customers in a real time online environment is crucial to the bank / customer conversation and reinforcing the company’s place in a customer’s mind as the entity that they want to do business with (Wells Fargo Bank, 2014). This case study will discuss the current status of Wells Fargo’s use of social media as a means to building their customer base. Additionally, historical information on the process of the marketing move to social media will be presented and the development of the roles that are involved in this marketing strategy will be discussed. The impacts to the public sphere and society at large will play into the discourse of the social media topic and finally, the underlying theories will be discussed as they pertain to Wells Fargo and social media.
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.
According to the history of movie rental, home video, and gaming, Netflix was the first company to introduce the movie rental service back in April of 1998 and offered more than 900 titles (Lardener, 2010). Ever since, the industry has become larger with new technology such as online streaming and next day delivery. Also, more competitors are now available and provide the same services, such as Amazon, Wal-Mart, blockbuster, and Redbox kiosks.
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.
1. What is the difference between a. and a. Briefly describe each of the four major challenges that Netflix faces. Which challenge is the easiest to address? Why do you need to be a member? The four challenges faced by Netflix are described below.
HuffingtonPost. (2013, 3 13). Netflix Syncs With Facebook (So Everyone Will Learn You Power-Watch 'Toddlers And Tiaras'). Retrieved 3 7, 2014, from http://www.huffingtonpost.com/2013/03/13/netflix-facebook-integration_n_2866775.html
Social media in marketing is used as an apparatus that builds an identity for a brand and gives awareness that they thought they could have. It does not only respect buyers, but also customer allegiance. Social media is widely-ranged so it can be used in whatever way that best conforms to the strategy and wants of the business. In accordance to the social media marketing report of 2014, a considerable (64%) of marketers use social media for at least 6 hours or more and 41% for 11 hours or more weekly, more importantly nearly (19%) of marketers use up to 20 hours each week on Facebook, Twitter, LinkedIn, Instagram and many more. The report also showed 7 social media platforms that led in 2014 which are Facebook, Twitter, LinkedIn, Google+, Youtube, Pinterest and Instagram.