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  • 1. NETFLIX Lakshimi Ramamurthi   Pao-Tien Ho
  • 2. Agenda History  Company Overview  Mission and Vision  Netflix: Mind Map  Technology Tools  How does it work  Current State of Technology  IT Business Alignment  Technology Strategy  Analysis- Lock in, SWOT, Porters  Recommendation and Conclusion 
  • 3. History 1997: NetFlix.com, Inc. California by Reed Hasting and  Marc Randolph. 1998: Begins offering DVD rentals and sales  1999: Group Arnault invests $30 million in the firm  2000: Revenue sharing deals Warner Brothers and  Columbia film studios 2001: Partnership with Best Buy  2002: Publically listed: Netflix, Inc.  2003: Subscribers top 1,000,000  2007: Billionth DVD Delivery  2009: Customer Satisfaction Index score -86  Current:55 million discs, ships 1.9 million DVDs to  customers each day
  • 4. Company Overview Headquarters: Los Gatos   Founded: 1997  CEO: Reed Hastings ,founder  Employees: 2670 FTE  Films: 100,000 titles  Distribution centers: 55  Subscribers: 10 million  Revenue: US$ 1.365 billion (2008)
  • 5. Mission and Vision Mission:  Our appeal and success are built on providing the most expansive selection of DVDs; an easy way to choose movies; and fast, free delivery.  Vision: Keeping the LEADING position in the industry
  • 6. Netflix: Mind Map Faster internet? Competitive Customers want the best New Tec’s service & at a low cost? Something that would How can we use the new fit With our Tech to achieve that? strategy..!!
  • 7. Technology Tools Game Console Vizio/ Roku X Box Streaming 360 Blue Tivo Ray DVR Samsung/ LG disc
  • 8. How does it work? Network Users Content
  • 9. Technology Strategy Why has Netflix survived when so many other Internet startups have failed?  Timing of entry - DVD adopters on Usenet groups First Mover – Brand Loyalty and Technological  Leadership Dominant Design- Roku Digital Video Player  Strategic Partners – Netflix partner’s with the  movie industry, the consumer-electronics industry, and retailers. Roku set-top
  • 10. Current State Technology • Measuring customer response • Delivery and presentation of personalized Customer information Analysis • Matchmaking • Building Customer Profiles Data Mining • Collecting Customer Data • Securing the Customer Data Info mediation
  • 11. IT/Business Alignment Technology • Keeping the Alignment IT needs and • Great website, fair /Business resources pricing and easy LEADING Goals access to position in the information industry • Using the latest • Providing the technology to Business BEST online enhance the Market needs and website features rental movie Needs and resources experience resources
  • 12. Lock In cycle Brand Selection No.1 Brand, Online streaming, rental by mail Lock in consistent and high- Sampling quality user Free Trial, Gift Card experience at no additional Charges Entrenchment: Streaming movies, Strategic partners, internet community
  • 13. Growth-Share Matrix Relative Market Share High Low High Star Question Mark Netflix Market Growth Rate Cash cows Dogs Low
  • 14. Competitive Analysis #1 #2 #3 #4 #5 Excellent Very Good Good Fair Netflix Blockbuster DVD Avenue Cafedvd EHit Poor Ratings Inventory Membership Features Movie Arrival Time Movie Information Overall Rating *Source -http://dvd-rental-review.toptenreviews.com/
  • 15. Porter's Five Forces Threat of Strong -> Potential Medium Entrants Major Players Strong -> M&A Stronger Demand < Supply No switching cost Industry Suppliers Buyers Power Competition Power Strong -> Stronger Weak -> Weak Rapidly growth Internet Channel market Transform to Medium - Online service >Stronger Download Threat of Service, IPTV Substitutes
  • 16. SWOT Analysis Strong Brand identity  Experience  Lead market share of online   Strong suppliers rentals W  Volatility in performance S Low fixed costs   Studios define release Free DVD Shipping and  Postage Worlds largest selection of  DVDs Over 90% of DVD's are  received by customers within one day of ordering Strong website
  • 17. SWOT Analysis Studios may form Pricing segmentation alliances (i.e., different plans) with bigger players Digital delivery Loss of reputation T Other types of rentals O Competition from VHS (Video games,Books) Risk of Malware Global Markets Growth rate changes Rapid advancement in technology
  • 18. Recommendation  Innovate and enrich customer experience.  Increase the prominence of new releases and work with music labels.  Marketing Initiatives  Capture New Customers and New Markets
  • 19. Q&A
  • 20. Thank You!