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Netflix industry competitive structure
Strategic Analysis Of Netflix
Operations strategy of netflix
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This report investigates the current state of the changes undergoing in Netflix, and the management and competitor issues associated with the organisation. Netflix, established in 1997 by co-founder and CEO Reed Hastings, is an online media stream and DVD and Blu-Ray disc rental that allows viewers in parts of Europe, North America and South America, to watch their online content library including TV shoes and movies. So far, the company already has an estimate of 200,000 subscribers. Recently after a long wait, Netflix has confirmed that it will launch in Australia in March 2015. A concise history of the organisation and it's business activities and procedures are outlined. The advantages and disadvantages are outlined throughout the discussion; …show more content…
The way Netflix margins it's structure is through three main stages; approximating the revenue, determining what they want to spend and then deciding the amount of margin they want in that time frame. This way of structuring keeps the company from overspending on their content. The company has a list of 'company values' (Olsen, 2010), in which they look for in their employees to run a successful business.They establish the regulations in which the 'employees should follow in their daily decisions and activities' (Olsen, 2010). The management team are the ones who lead by example, and enduring in such a large plan,, the managers should embrace the change and use the most effective and efficient resources to do …show more content…
As every other organisation, their competitors are dying for the launch to Australia. Quickflix is one of Netflix's biggest competitors on the market, both organisation's mostly offer the same subscription video on demand. Although new competition may be a threat to other competitors in the same market, The CEO of Quickflix, Stephen Langsford, says 'he is looking forward to the competition' (Chris Pash and Alex Heber, 19th November, 2014). Netflix offers a subscription membership for $13 a month, with no cancellation fees and no long-term contracts, and direct access to view an unlimited amount of media on a PS3, computer, laptop, wii, phone or Xbox 360, whereas a Quickflix subscriber pays $19.99 a month, has little streaming content and has to pay extra for the latest TV shoes and movies. If an organisation doesn't make the content accessible for viewers to watch legally, they will find other ways to do so. Companies in the same market need to keep up to date with the latest technology to prove to their viewers that they are the best company to stay
If a site is successful at delivering greater than 200 new customers in a month, the referral fee is negotiable, up to $30 per new customer. Netflix is a straightforward company. It rents DVDs via the Internet and sends them to you throughout the U.S. Postal Service. For a flat fee of $19.95 a month, you can build a list of movies on the Netflix.com Web site that you want sent to your home. The company sends you the first three along with prepaid return envelopes.
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.
Netflix first grabbed the attention of many customers when, unlike the local video rental store, they eliminated due dates and late fees charged by traditional video rental stores. The Netflix model allows customers to pay a monthly subscription fee for which they receive as many movies as they want in a month. The subscribers order DVD’s via the firms website and delivered through the United States Postal Service. Subscribers keep the movie as long as they want and when finished return it to Netflix in a postage paid envelop.
[1] Halal, Bill. "How NetFlix Beat Blockbuster: An Exemplar of Emerging Technologies." William E Halal RSS. N.p., n.d. Web. 09 Dec. 2013.
S. W. O. T. Analysis Strengths:.. ? Netflix provides a subscription-style e-commerce service. Over 95% of customers pay at least $17.99 a month, which includes unlimited rentals with up to three titles at a time. A comparably low monthly fee, allows Netflix to lead the market share of online DVD rentals while competing with traditional brick and mortar rental stores. Meanwhile, Netflix might keep the customers who try the service and happy with it continue paying the monthly fee.
Netflix, The American Online On-Demand Video Streaming Giant crossed the border into Canada on September 22nd of 2010 looking to capitalize on the largely untapped online TV and Movie streaming market. While Netflix Canada, for the moment, will not be offering its flat rate online DVD-video and Blu-ray Disc rental service as in the United States, it is bringing a top quality video streaming service to Canadians...but will it be enough to change the way we rent, buy and watch our favorite TV episodes and Movies? When I first heard that Netflix was coming to Canada, I was pretty excited. I watch a lot of movies, mostly on my laptop after everyone else has gone to bed, and the concept of being able to watch any number of movies online at any
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...
...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.
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.
In today’s technology boom, the new waves of doing business have transformed the way people shop and live. The same happened the way people access personal entertainment. With Internet, people can stream movie online without have to go theater, or the rental movie box.
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. Digitally offering television shows is an area of competition that has previously been controlled by
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...
Managers are required to form a team that will be capable of leading the way during the organisational change and setting a positive