Download - Netflix Business Model & Strategy
ContentCompany profile
PEST analysisFive forces analysis
Value chainCanvas modelCore problem
Differentiation matrixCanvas model +5
Strategy
No mission and vision!StatementBecoming the best global entertainment distribution serviceLicensing entertainment content around the worldCreating markets that are accessible to film makersHelping content creators around the world to find a global audience
Company profileFounded in 1997
Flat rate DVD by mail
Data mining
Successful transition to streaming content
>40M members, > 1 billion hours of TV Shows and movies per month
PEST analysisPolitical
Piracy
Content licenses and copyright
Economical
Unlimited market size
Technology applicable for all countries
Social
Wish to watch on tv screen, applicable
everywhere
Technological
VOD increased popularity, Need for high
internet speed
Five forces analysisThreat of new entrants – high (Apple, Amazon, Hulu, Youtube)Threat of substitutes – high (Apple TV, Hulu)Bargaining power of customers – high (a lot of choice for substitutes)Bargaining power of suppliers – high (content is key)Intensity of rivalry – high (HBO, low entry barriers, major players present)Complementors – high (Microsoft, Wall-Mart, Roku, Vizio, LG)
Market Life Cycle
Value chain Model
Canvas Model
Strenghts – Data, experience, # shows and movies
Weaknesses – Fixed costs, high debt, system not flexible
Opportunities – Europe, NEM, original content
Threats – changing technology, rising prices, competitive markets
SWOT analysis
Confrontation matrixSWOT Europe NEM Content Tech Prices Markets
Data ++ + - + o ++
Exp. ++ + - + ++ ++
# ++ ++ + ++ ++ ++
Fixed + + + -- + +
Debt o o -- -- -- -
System - -- o -- o -
Threat of all five forces is high
Power of suppliers and buyers is especially high
Netflix is stuck between powers
Core problem
Canvas Model +5
StrategyPursue market penetration strategy by excellent service and low prices
Focus on creating its own content to maintain competitive advantage
Increase its innovation budget by 5% next year and continue to do so
Use pricing as a last resort measure to increase margin
Choose to stream content only, milk its mailing DVD’s within the next 5 years
Create more partnerships to create perfect hardware platform for its software
Continue its high availability distribution strategy