Netflix

NETFLIX 6

’sCompetitive Forces

Competitiveforces refer to level of industrial competition and strategy ofbusiness development. There are 5 known types of competitive forcesclassified either as horizontal or vertical. Horizontal forcesinclude threat of new entrant, substitutes and already existingindustrial rivals.In the case of , new entrants includeYouTube, a Google based online forum for media streaming.

Threatfrom substitutes include, Dish, Google’ IPTV (internet technologyfor television, HBO GO and Nomad. Already existing industrial rivalsinclude: Bargaining power of suppliers is based on ’ssubscription packages based on unlimited titles either DVD orstreaming based with specific rates and prices attached hencesubscribers have to work within this subscription plan.

Bargainingpower of buyers hugely depends on their preferences sat DVD orstreaming options. In this regards, their preference hugelydetermines quality of customer service and rates attached to each ofthe options available. For instance, in the case where decides to split the streaming and DVD options, customerdissatisfaction led to to revoke the withdrawal and actuallycome up with damage control to win back customer loyalty.

Critiqueof ’s Strategy and Business Model

Businessmodel refers to how organization creates, derives ad delivers valuewhich is a part of business strategy. For , the model is anextensively regarded entrepreneurial and management tool. Inaddition, business model enables them to not only to integratefinancial arrangements but to also micromanage their coop rationalarrangements and designs that enable them to easily achieve theirstrategic objectives and goals in both the long run and the shortrun. At , its business model is the subscription model. Inthis case, subscribers pay a certain fixed rate and price for a givenproduct that they feel satisfy their needs or wants. In this way, is able to entrench customer loyalty, but letting them choosefrom the wide variety of products that we offer them. Further, is able to reach greater markets by the diversificationstrategy that is envisioned in their business model. It is a commonmodel in online service provision and is hugely preferable tocustomers, since it provides continual cash flow generation thatmaybe guaranteed. However, a major setback is that automatic renewalof the subscription may not be available hence no guaranteed cashflows.

Importantto note, ’s subscription services are appealing to viewersas hey provide the DVD and streaming option. This kind of serviceenables the customers to enjoy the product in the best way they deemappropriate. Further, it enables them to draw the maximum possibleutility from using products. The DVD option is liked as everymovie made has been published therefore presence of hard copyreference. Problem is that the DVD mail order option may not lastlong enough due to technology evolution. Also, postage, shipping andfulfillment costs accompany the mail order which increases cost forthe subscriber.

Thestreaming option is advantageous as its integrated into thesubscribers ‘ electronic devices and can be watched anywhere andanytime though it does not provide the long term reference offeredby DVD. Streaming also requires aggressive marketing leading to highcosts being incurred. The no delay, no late fee policy works for thesubscriber and the service provider hence is a good policy makingsubscription business model to be lucrative.

Strengths

Varietyis said to be the spice of life and has really outdone itselfhere. Notably, diversity exhibited in products has made itpossible for to reach greater markets and to competeeffectively in the market against competitors in the industry.Particularly, the streaming or DVD option, gives the consumers thekind of liberty that consumers of products from other relatedcompanies can envy. Ideally, products offer the consumer thekind of utility that is rare and value for their money. Ranging fromthe movie selection, to extensive information it provides on movierentals and providing recommendations on movies to watch, hasprovided variety to its client base. Also, there’s the convenience of instant services and ease of ordering movies. The free trialalso encouragesinterested individuals who more often than not endup being subscribers.

Weaknesses

is over ambitious which as it receives a lot of customer and investordisgruntlement. However, at first the move to split the DVD andstreaming was not a very welcome idea for the consumers. Some of whomfound it unnecessary to have two different accounts for products thatare from the same company. This led to the share price falling so didthe revenue. Damage control measures came up to restore customerloyalty. In this regard, took note with a lot of concern thecustomers’ grievances and addressed the issue.

Opportunity

TheApple television box presented a wonderful opportunity for toreach more users. Also, the Kevin Spacer film released in theatrestogether with saw their revenues plunge and increased theirrecognition to viewers.This led to increased prices for new releaseswhich the subscribers were willing to pay.has also becomeinternational hence wider client base. Streamed movies realized anopportunity of renting it, which increased revenues. Further, opportunities became apparent through a feasibility study. Theresults of the study show that products are palatable by awide range of consumers across all demographic variables. In thisregard, their market is easily divisible along age, gender and socialclass boundaries.As a result, can venture the market with many productstargeting different groups of people.

Threats

DISHinvented the Sling adapter which was able to synchronize electronicdevices. Nomad allowed viewers o watch recorded media anywhere andanytime. Google also invented YouTube which also streamed videos. HBOdeveloped HBO GO to allow access of movies anywhere. Piracy, whichrefers to illegal file sharing, came up leading to unrealizedrevenues by .

of Recommendations

should strategize on how to build a broad and loyal customer base. Inthese regard, they can exploit the available forums such as theinternet to reach out more markets. Particularly, this is achievableby designing a website a Facebook page and a twitter handle whenthey can interact with their customers and market themselves further.In addition, needs measures to ensure property rights are notinfringed. This will enable them to minimize and control piracy,hence preventing revenue losses.&nbsp

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