Netflix Business Plan with SWOT for Spain
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Netflix Business Plan with SWOT for Spain

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Business plan to launch Netflix in Spain with SWOT analysis. Contact me: editoringles@gmail.com

Business plan to launch Netflix in Spain with SWOT analysis. Contact me: editoringles@gmail.com

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Netflix Business Plan with SWOT for Spain Netflix Business Plan with SWOT for Spain Presentation Transcript

  • Miriam Clark DowdMy blog: http://bit.ly/fourpointo © 2010 Miriam Clark Dowd
  • Objective 4.000 members in Barcelona at the end of FY 2011 (€482.000) Month 1 2 3 4 5 6 7 8 9 10 11 12 Total Mbrs 0 300 600 800 1.200 1.800 2.500 2.700 3.000 3.500 3.700 4.000 4.000 Revenue € - € 6,000 € 12,000 € 16,000 € 24,000 € 36,000 € 50,000 € 54,000 € 60,000 € 70,000 € 74,000 € 80,000 € 482,000 Benefit € - € 3,750 € 7,500 € 10,000 € 15,000 € 22,500 € 31,250 € 33,750 € 37,500 € 43,750 € 46,250 € 50,000 € 301,250 Members per month, 2011 month 4000 3700 3500 3000 2700 2500 1800 1200 800 600 300 0 1 2 3 4 5 6 7 8 9 10 11 12 2© 2010 Miriam Clark Dowd
  • Internal Analysis Company History p y y 1997 Netflix launches 1998 Online DVD storefront opens 1999 Netflix won’t penalize members with late fees, rather they will pay a fixed fee each month Recommendation system is launched, Cinewatch 2000 Unlimited DVD rentail available 2001 Netflix reaches a commercial agreement with BestBuy Netflix goes public (IPO) 2002 DVD players penetrate 50% of homes in the USA Each user can create an online profile 2005 Walmart and Netflix reach an commercial agreement Netflix and Tivo join forces to acquire and distribute DVDs Blockbuster announces it will launch an online storefront similar to that of Netflix 2006 Trailers available on Netflix.com Netflix reaches 7 subscribers 1 million member opinions are available online 2007 Netflix reaches 75% of market share Online streaming of videos launches on Netflix.com 2008 Netflix and Microsoft come to an agreement to stream Netflix movies on Xbox Live 2009 Netflix distributes its one-billionth DVD 3© 2010 Miriam Clark Dowd
  • State of Finances 1,600,000 1 600 000 1,400,000 1,200,000 1,000,000 and $ Thousa 800,000 600,000 400,000 200,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Facturacion Total Revenue 1,339 5,006 35,894 75,912 152,806 270,410 500,611 682,213 996,660 1,205,34 1,364,66 Total de Gastos Expenses p 1,311 4,373 24,861 49,907 79,136 179,010 330,010 464,550 626,985 786,168 910,234 Beneficio Bruto Benefit 28 633 11,033 26,005 74,670 91,400 170,601 217,663 369,675 419,172 454,427 4© 2010 Miriam Clark Dowd
  • Organigrama 5© 2010 Miriam Clark Dowd
  • Value Chain AnalysisInfrastructure• Effecient and organized infrastructure• 90 warehouses in USA with the same technology and operating systemHuman Resources• Employees generally very content and enjoy many benefits and rights within the companyTechnological Development• Netflix always looks for new technology that will improve the service, which includes the recommendationsystem and storefrontRealizaciónInternal Logistics & Operations External Logistics Marketing & Sales Services• Effecient and complete logistics • 95% of users • 41% of operating •24x7 customer servicesystem receive DVD within 24 expenses go to• Website storefront more hours in working days marketing •Online helpadvanced that what’s available onthe market • 2 millon DVDs • Marketing strategy •Some members are shipped every day very good and very not happy that new effective customers seem to have priority on certain DVDs (improved with streaming option)© 2010 Miriam Clark Dowd
  • Distribution • 95% of users receive their DVD in 24 working hours • 2 millon DVDs shipped every day • In Q3 2008, 42% of members used streaming to watch at least 15 minutes of video • Streaming via: Netflix.com, Xbox 360, Tivo and Apps 7© 2010 Miriam Clark Dowd
  • Client ABC Netflix has 1,000,000 subscribers in the USA 1 000 000 USA, distributing the product from 90 warehouses across the country State # Warehouses # Clients California 7 855,556 855 556 Florida 7 855,556 State # Warehouses # Clients A New York 6 733,333 Pennsylvania 4 488,889 Alaska, Arizona,  Texas 4 488,889 Arkansas, Colorado,  Total Clientes Hawaii, Idaho,  3,422,223 , , Maine, Maryland,  M i M l d Michigan,  State # Warehouses # Clients Minnesota,  Mississippi,  Georgia 3 366,667 Montana,  Approx.  Kentucky 3 366,667 C Nebraska, New  1 each 122,222 per  Missouri 3 366,667 Hampshire, New  facility f North Carolina 3 366,667 Jersey, New  Ohio 3 366,667 Mexico, North  Tennessee 3 366,667 Dakota, Oklahoma,  Wisconsin 3 366,667 Oregon, South  Alabama 2 244,444 Carolina, Utah,  B Vermont Connecticut 2 244,444 Illinois 2 244,444 Indiana 2 244,444 Total Clientes 2,811,111 Iowa 2 244,444 Louisiana 2 244,444 Massachusetts 2 244,444 Nevada 2 244,444 Washington 2 244,444 Total Clientes 1,955,552 8© 2010 Miriam Clark Dowd
  • Majority of Client ABC members are women No children No large difference between mbr Average salary age groups > $30k Majority have attended college 9© 2010 Miriam Clark Dowd
  • Client ABC Content Streaming • In Q3 2008, 42% of members used streaming to watch at least 15 minutes of content. • Represents an increase of 22% over Q32007 • The majority watched more than 15 minutes 10© 2010 Miriam Clark Dowd
  • Communication & Advertising • Online advertising • Advertising on envelopes • Direct mail • Emailing • Virtual gift cards • Gift cards • Radio and TV advertising • Magazine advertising • Free streaming offers • Various contests • Free Trial 11© 2010 Miriam Clark Dowd
  • Communication & Advertising Yearly Marketing Spend 1,600,000 1,400,000 1 400 000 1,200,000 1,000,000 1 000 000 $ Miles 800,000 600,000 400,000 200,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Facturacion Total Revenue 1,339 5,006 35,894 75,912 152,806 270,410 500,611 682,213 996,6601,205,341,364,66 Marketing Marketing 4,052 14,070 25,727 21,031 35,783 49,949 98,027 141,997 225,436 218,212 199,713 TotalExpenses explotación 11,181 30,664 68,590 62,394 85,447 86,928 151,247 214,647 304457 327,399 332,921 Al l gastos de 12© 2010 Miriam Clark Dowd
  • Communication & Advertising Marketing as % of all operating expenses G&A 10% Shipping & Handling 31% Marketing 41% Tecnology & R+D 18% 13© 2010 Miriam Clark Dowd
  • External Analysis ñ DVDs in Cataluña H Homes i Cataluña in C t l ñ % of homes with a DVD player No DVD Units:% of all homes 24% Sou TOTAL 73,4 73 4 urce: Instituto Na Home with 1 person 47,6 Home with 2 people 66,5 Home with 3 people DVD 82,2 76% Home with 4+ people 89,0 acional de Estadís % of homes that have a DVD player Units:% of all homes Both sexes % of homes in Cataluña with DVD stica, Spain 73,4 73 4 Men 77,2 100 Women 90 67,4 80 Age: Total 73,4 70 Under 25 years 80,1 60 25-44 years 88,4 88 4 50 45-64 years 40 80,4 30 65+ years 41,4 20 Nationality: Total 73,4 10 Spanish 73,2 0 Foreign 75,7 TOTAL < 1 100 De 1 101 De 1 801 > 2 700 1.100 1.101 1.801 2.700 No From EU country euros a 1.800 a 2.700 euros sabe/no 75,7 euros euros contesta From country outisde EU 75,7 14© 2010 Miriam Clark Dowd
  • Demographics of Barcelona BCN Population Pyramid • GDP per capita – 23,108 EUR / ~1,900 month 1 octubre 2009 • 1,593,075 1 593 075 residents 96 • Population: 1,615,908 in the metropolitan area 90 84 • Barcelona has 100 km ², with nearly 78 72 15.867 people per km ² p p p 66 60 • Population density on par with Nueva York & 54 Edad París 48 42 • 10 Districts 36 • Di t i t1 Ci t t V ll District1: Ciutat Vella 30 • District2: Eixample. 24 18 • District3: Sants-Montjuic. 12 • District4: Les Corts. . 6 • District5: Sarrià-Sant Gervasi. 0 • District6: Gràcia Gràcia. 70000 50000 30000 10000 10000 30000 50000 70000 • District7: Horta-Guinardó. • District8: Nou Barris. Men Women • District9: Sant Andreu. Millions of people • District10: Sant Martí de Provençals. Source: Instituto Nacional de Estadística, Spain 15© 2010 Miriam Clark Dowd
  • Economic Environment • The current economic crisis has had a negative impact on consumer confidence • The recession period in Europe has caused high unemployment rates and a decline in personal finances • The economic situation will be slow in 2009 • Brussels predicts that the paro in Spain will reach 19% in 2010 • The IMF forecasts the GDP of spain to decline, to -2% in 2009 • Totan unemployment in Spain = 3.808.353 people. • Spanish households have reduced the number of shopping trips they make by 3,1% and they spend 2,3% less per family (Nielsen) Source: Instituto Nacional de Estadísticas, Spain 16© 2010 Miriam Clark Dowd
  • Social and Cultural Environment • 64% of Spaniards use illegal websites to share and download content on the Internet well Internet, above the European average of 56% • 24% of people are not concerned about internet security online, and 30% rarely check that their antivirus software is up to date • For 90% of young people, watching TV is one of their preferred free-time activities • Moves are the content most preferred by young people (42%), followed far behind by TV series (13%) and sports programs (13%) http://baquia.com/ h //b i / Main Free-Time Weekend Activities Source: Instituto Naciona de Estadística Pasear, estar en laacalle Go for walk Visit with family y Estar con l f la familia l Ver la tele, video, DVD Watch TV, videos or DVD Rest, do nothing Descansar, no hacer nada 11 % Mujeres % Men % Hombres %WWomen al Leer Read Go Ir de bares, cafes out for coffee/drinks Attend cultural events (ie Asistir especatculos cinema) culturales (ie cine) 0 10 20 30 40 17© 2010 Miriam Clark Dowd
  • Legal and Technological Environment Legal Intellectual property rights are most vulnerable in the cultural and past-time sector. Music and cinema are the most important and they suffer directly from the consequences of piracy and bad intellectual property policies and laws. La Federación para la Protección de la Propiedad Intelectual (FAP) is dedicated to the defense of intellectual property rights governing audiovisual work and entertainment software. Technology The increasing presence of various video formats presents a significant threat with substitution in the form of pirated DVDs, especially grave for distributors and brick and mortar shops shops. However, continued purchase and use of CDs and DVDs will continue . 18© 2010 Miriam Clark Dowd
  • Sector Analysis– Music and Video Sector Characteristics • Competetition: Strong • Buyer power: Strong • Low cost and many options • Businesses: many, but a few monopolize the sector • Market entry: Easy • Brand loyalty: Low 19© 2010 Miriam Clark Dowd
  • Competitive Analysis Group 1 Group 2 Group 3 • Digitae • Apple/ iTunes • Rental Kiosks • MediaXPress Cine • FNAC • El Corte Ingles • Xbox Zune • Pirating • PlayStation • Canal+ • Ono El Corte Ingles High Price Canal+ Digitae MediaXPress Netflix Show Fast Delivery Kioscs Ki Delivery li Xbox Zune Pirating i i Low Price 20© 2010 Miriam Clark Dowd
  • Competitive Analysis Market Quota, Spain 21© 2010 Miriam Clark Dowd
  • Competitive Analysis 22© 2010 Miriam Clark Dowd
  • MediaXpress Digitae Pirating Xbox Zune Corte Ingles Kioscos Canal+Level ofCompetitionFacturacíón High – Direct NA NA Competitor Analysis High – Direct High – Direct 136 millones de High Microsoft Medium 17,898 Medium NA Low 2,428.61 Eur2008 euros perdidas en $16.37 billones millones 2007 en Worldwide W ld id Euros E CatalunyaOwner Techfoundries Private with Various Microsoft El Corte Various Prisa investors InglesMarkets Spain Spain Global Global Spain Spain Spain & FranceMembers 6,000 8,000 300 million 1 million Xbox sold 225 locations downloads, 2009 in SpainProducts DVD DVD Movies, DVD, DVD Movies, Series 6,000 titles >8,000 titles videogames, videogames, software etc.Brands Diode, InOutTV The Pirate Bay Varios Varios (#3), CinexpressChurn 10-12% 10-12% N/A N/A N/A N/A N/A 5% for courierMarkeating 20,000 clients Agreement Word of mouth Segmental Advertising, Word of Advertising,StrategySt t with MSN ith Links Li k incremental growth i t l th mailings, etc ili t mouth th mailings, etc ili t Spain , Amena, SEO Detallistas Online adsDistribution Single site in Postal 2+ Streaming, Streaming Stores in Street TV / Canal+ Barcelona DVDs in one downloads Spain DVR envelopeStrenghts Courier by SMS OK website Free Microsoft owned 26% offline Location, HD; at home; SEO + Share content Zune agreement market quota subscription partially pay for Advertising $$ Low price not necessary Satellite TVWeaknesses Correos Cost of DVDs Illegal Late market entry, Location Price No SEO Correos low offer Bad website Bad websiteOpportunities Improve online Download to No limit to users Increase # of movies Agreement Advertising Offer more HD ads own VOD; with Digitae movies Games; Ads or similar AdvertisingThreats TV ; SEO Unknown New laws Online streaming High price 23 Low selection Online market Unknown
  • Market Changes & Advancements New Technology • Online video streaming, such as Cuatro Play, Cinexpress & Xbox 360 • DVR technology to record and rewatch • Xbox 360 offers streaming. Xbox 360 & Playstation offer downloads. • Market is changing - Bluray will replace DVD soon Keys t S K to Success • Increase number of movies available (incl. HD) • Accessible price structure A ibl i t t • Fast shipping • Intelligent online order system I t lli t li d t 24© 2010 Miriam Clark Dowd
  • Distribution Analysis Correos of Spain Courier Not reliable Reliable Lost discs account for – Lost discs account for <1% 1.5 - 7% of all shipments sf all shipments Shipping speed not guaranteed pp g p g Shipping speed guaranteed pp g p g 1-2 days 3-4 days longer in Summer Guaranteed delivery but usually DVDs can be stolen from mail someone h t receive th DVD has to i the Negative user preception SMS orders # 1 reason users cancel their th i subscription b i ti 25© 2010 Miriam Clark Dowd
  • Market Analysis Market Value New access channels to this type of content, such as pirating, have been the main reasons that sale and rental of movies have declined so drastically. Market Value Forecast In 2013, it’s forecast that the marketing will have a value of 4,529 million, a decline of 22,9% from 2008. 26© 2010 Miriam Clark Dowd
  • Market Analysis 27© 2010 Miriam Clark Dowd
  • SWAT Strengths Weaknesses • Strong business model • Netflix nknown in market • Higher value-add than competition • Copyrights in Europe • Relationship with US distributors • Spanish market unknown to us • Effective marketing campaigns • Internal and External logitics • Website • Children’s content • Opportunities Threats • High demand for online streaming in HD • Postal serivce not reliable enough • Increase in online spending • Consumers don’t trust the postal serivce • Direct competition has poor business • Competition: pirating/streaming model • Target marketing not aware of posibilities of business model • Movie rental market in steep decline • Many options at a low price • Easy market entry 28© 2010 Miriam Clark Dowd
  • Basic Strategies Targeting y Segmentation Target Market Men and women, 25-45 years old in Barcelona who: 25 45 • Rent movies as hobby • Love movies • Have access to Internet • Have a DVD player • We will try to target people with a busy lifestyle and who are unhappy with video rental stores/kiosks as well as the quality of streaming / pirating onilne Target Market g Men Women In Catalña 2,506,710 1,291,269 1,215,441 25-45 y/o 9.25% 119,466 112,450 Live in BCN city 19% hombres Movies Hobby 22,698 24,739 24% mujeres Have DVD 88.40% 20,065 21,869 Total 20,066 21,869 Total 41,935 29© 2010 Miriam Clark Dowd
  • Basic Strategies Positioning Strategy = reliable fast high quality reliable, fast, high-quality • Fast and convenient service with a large selection • HQ streaming • Rent HD moves El Corte Ingles High Price Canal+ Digitae MediaXPress Netflix Slow Fast Delivery Kioscos Ki Delivery li Xbox Zune Pirating i i Low Price 30© 2010 Miriam Clark Dowd
  • Basic Strategies Competitive Strategy • Differentiation by reliablity, speed and high quality • Web technolgoy – more advanced than competition • Advanced and intelligent ordering system • Client satisfaction • Quality of product • Market recognition (in USA) Prizes Netflix has won • Feb 2010 - #1 online retailer in client satisfaction - American Customer Satisfaction Index • #1 client satisfaction in online sales websites, from 9/10 surveys – 2005, ForeSee Results. • Jan 2007 - Retail Innovator of the Year - National Retail Federation • Dec 2007 - #1 online retailer - Nielsen Online. • Dec 2008 - Netflix Player Roku named one of the Top 10 gadgets of the year – TIME 31© 2010 Miriam Clark Dowd
  • Product Overview Packaging, Guarantees, Product Personality Characteristics design, photo, Warnings logo Fun Ratings, Ratings recommendations and USA 3 day 3-day shipping Convenient DVD the option to share your movie Language: ES Safe website Up-to-date list with friends on website Catalán, EN Huge selection Fast Fun Immediate Ratings, recommendations and USA Convenient High-quality g q y Streaming the option to share your movie Language: ES Up-to-date Safe website list with friends on website Catalán, EN Fast Actions • No change to packaging • Same brand colors • Add “franquicia pagada” to envelope • Translate wrapper and website t ES T l t d b it to 32© 2010 Miriam Clark Dowd
  • Product Overview© 2010 Miriam Clark Dowd
  • Price Overview Price range Promotions Discounts Price-based Promotions Half the price of 15 day trial – 3 DVDs & Ongoing Free Trial promotion None direct competition unlimited streaming Higher than Ongoing Free Trial promotion None 15 day trial – 3 DVDs & streaming and unlimited streaming pirating • We will aim to offer the most competitive price possible within the market, but without ever losing reliability or shipping speed (20 EUR/month) 34© 2010 Miriam Clark Dowd
  • Distribution Overview Sales points, Canal Strategy Canal Type Location Transportation, type location, # PUSH / PULL Send via F C Courier; F.C. Direct Netflix.com Netflix.com PULL Return by Correos Streaming to computer or Directa Netflix.com Netflix.com PULL Xbox 360 Acciones • Reach agreement with courier company • Organize return b f O i t by franquicia pagada f i i d from C Correos ( ti (national postal service) l t l i ) 35© 2010 Miriam Clark Dowd
  • Distribution Overview ? 36© 2010 Miriam Clark Dowd
  • Advertising and Communication Objetives Brand awareness 4.000 clients in Barcelona (2011) A simple and efficient advertising and promotion campaign Advertising - Marketing online • Social Networking – Netflix Facebook groups and others de Netflix) • Invite a friend (like Spotify) • SEO and SEM • Apps – USA Netflix App translation • Online banner advertising in appropriate websites *80% of US members heard of Netflix through word of mouth© 2010 Miriam Clark Dowd 37
  • Advertising and Communication PR – Press Releases • Announce launch in Spain • Send promotional items to bloggers along with invitations for Free Trial Direct Marketing – email Campaigns • Three emails offering free trial for 15 days sent to list of people who go to the movies once per month (purchased/rented)© 2010 Miriam Clark Dowd 38
  • Advertising and Communication Actions • Translate website to ES • Direct Marketing ecto – Three emails offering free trial for 15 days sent to list of people who go to the movies once per month (purchased/rented) – 10,000 people in BCN • Press Releases – About launch of company and freebies to bloggers • Online Marketing – iPhone App - translate to ES • Online Marketing – Banners – online at ServiCaixa, Dooplan, The Pirate Bay and Alluctv.org • Social Networking – Netflix Facebook page from USA translate to ES USA,© 2010 Miriam Clark Dowd 39
  • Advertising and Communication© 2010 Miriam Clark Dowd 40
  • Advertising and Communication© 2010 Miriam Clark Dowd 41
  • © 2010 Miriam Clark Dowd