Netflix Case Study.

Netflix Case Study.

Introduction.

Reed Hastings, as stated in the readings, is aware that complacency could have damaging effects, therefore, have been proactive in establishing avenues that can further improve service delivery, and to a large extent, contribute to boosting customer experience. Indeed, all this is inclined towards mitigating a possible demise and bankruptcy declaration that results from strained liquidity position arising from fewer sales volume. Today, as evidenced in the readings, improved customer experience is vital, and a matter that has contributed to a dedicated effort to offer seamless connection to the site, broad array of content, and importantly effective pricing model aimed to encourage increased subscription rate. Undertaking a Swot analysis is crucial in pinpointing areas that Hastings should do more to assure Netflix’s continued success.

Swot Analysis.

Strengths.

Netflix’s constant growth is primarily attributed to business strengths and seeming competitive edge against leading competitors, which has substantially contributed to a large extent to the global expansion and increased market dominance. The competitive advantage is mainly attributed to the engaged business model, which is arguably its main strength. The involved business model allows a seamless experience to the customers where they can access movies and series on television at their convenience and a friendly price. Indeed, with considerable attempts engaged globally about improved internet speed, then this company is positioned to greatness, observing that it has wide market potential, particularly in the global business environment. An upward trajectory is therefore presented in terms of subscription rates, with the population reacting to recent disruptions that is moving us away to DVD lending to live streaming that inherently comes with more convenience.

Weaknesses.

The applied business model is imitable and highly dependent on content producers and internet service providers. That essentially means that failure in some of the contractual obligation may pose an adverse spillover to the users in terms of user experience, and ultimately affect the reputation of the company. The fact that a considerable number of what is viewed is not owned by Netflix presents a glaring issue about copyright issues. That could as well create a damaging relationship with esteemed clients and with readily available substitutes translating to a considerable loss in the market share. Pricing model also engaged to some extent sets significant hindrance to desired growth, particularly in regards to maximization of the market size in the global market such as Africa and Asia. Asia and Africa offer areas where the socioeconomic status of the people is relatively low, thus demanding friendly pricing to improve on the subscription rate. By so doing, the company will have mitigated the imminent threat of the competitors who might take this as an advantage to gain entry and boost their market share against Netflix.

Opportunities.

Netflix, following its vast brand value, is presented with an incredible opportunity to maximize growth and earnings. One seeming chance is about the establishment of strategic alliances. For instance, the company should partners with Hotels to give guest a better streaming experience. Another area of improvement is on expansion, where it is strongly encouraged that Netflix should take advantage of globalization by also tapping into the Chinese market with the hope of increasing the customer base. It is laudable that Africa is already well represented, though serious attempts to bring down subscription prices should be engaged in line to maximize on market share, and importantly taking advantage of the economies of scale following maximized sales value.

Threats.

The most significant threat facing Netflix is the seeming increased competition, which is vastly attributed to its imitable business model. Today, some of the big brands such as Amazon, Hulu, and Youtube are much represented and availing a broad array of impressive services to the subscribers. Digital privacy is another seeming threat, with the people becoming increasingly aware of alternatives ways they can download a movie or a series.

Key Issues to be addressed.

It is strongly encouraged that in today’s highly competitive business environment, it is exceedingly worthwhile to ensure that the user experience is significantly improved to match the demands of the world, where a high level of efficiency is called upon in service delivery. As mentioned in the Swot Analysis, one of the significant weaknesses facing the company is an overreliance on third parties, including content and the internet providers. Internet provision is not tenable at present, which calls for the continued engagement with the contracted parties. However, it is exceedingly important to ensure that contracted parties are demanded to avail of top customer experience, which is occasioned with minimal or zero downturns. Content provision is another area, though it is quite fulfilling, as stated by the Hastings, there is a dedicated effort to see that the company maximizes on the content c. That is exceedingly important to customize service offerings to the market demand, and importantly a practical approach to mitigate copyrights cases that are inevitable when you have vast reliance on the work of the third parties.

Continued international growth is also encouraged, with a particular interest being the Chinese market where the company is yet to venture. As stated in the readings, as at 2016, the company had 93 million subscribers, with 49.4 million being in the US. That is a sheer demonstration that considerable attention has often been directed to increase the market share in the US while going international also offers a better deal in terms of maximizing the yields. It is therefore encouraged that internationalizing of services should be done at a fast speed to match the established focus by leading competitors such as Amazon that are not only focusing on the US but also the global market that primarily offers an incredible deal when it comes to boosting sales earnings. A similar trend is therefore encouraged to maximize sales volumes through increased subscription, and importantly take advantage of economies of scale.

Conclusion.

Netflix, as discussed in this paper, is strategically positioned for ultimate success, though several strategies must be employed to accelerate growth. At present, the company is doing incredibly well in terms of customer experience and brand awareness. However, the fact that the company still, to some extent, relies on third-party contents entirely means that it is presented with a significant risk of copyrights. It is also necessary to have an arrangement with the service providers to identify an effective data cap that virtually ensures that no one is locked out of his or her entertainment needs. Competition is another significant threat, with an imitable brand leading to vast market entry. High efficiency is therefore demanded, which therefore calls for effective internal processes to match the needs of modern customers.

References.