NETFLIX
Lakshimi Ramamurthi

 Pao-Tien Ho

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


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

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)

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

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..!!

Technology Tools
Game Console
Vizio/ Roku
X Box
Streaming
360
Blue
Tivo Ray
DVR Samsung/ LG
disc

How does it work?
Network Users
Content

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

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

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

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

Growth-Share Matrix
Relative Market Share
High Low
High
Star Question
Mark
Netflix
Market
Growth
Rate
Cash cows Dogs
Low

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/

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

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

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

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

Q&A

Thank You!