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Kyle Robinson, Melissa Hawtin, Ariana D’Avanzo
Agenda
• Introduction
• Part I: SWOT Analysis
• Part II: PEST Analysis
• Part III: Porter’s Five Forces
• Summary
Introduction
• Started in late 90s with subscription service by mail
• In 2015 they have over 65 million members in over
5...
introduction
• Library includes well over 100,000 titles – or a petabyte
• Not just a content distributor – they are a con...
SWOT Analysis
Strengths
• Global Market Leader
• Strong Brand
Recognition
• High Customer
Satisfaction
• Affordable Pricing
• Large Cont...
Weaknesses
• Monthly Sign Up Fee
• Older Titles
• Share Decrease
• User Friendliness
• Password Sharing
Opportunities
• Original Series
• Further International Expansion
• Show More Popular Content
• Partnerships - Pre-install...
threats
• Streaming Competitors
• Illegal Streaming
• Higher Licensing Costs
• Changing Customer Demands
• New Entrants
Strengths 
Opportunities
• Use brand name to partner with
stars and create more Original
Series
• Expand
• Bid for more c...
Weaknesses  Threats
• Stay in tune with customer wants / needs to remain
top streaming service
• Focus on producing more ...
Pest analysis
Political
• Piracy: illegal streaming of shows
• Content and licensing agreements
• Employee benefits
• Only hires “fully ...
Economic
• International expansion
• Economic condition
• Labor: work force conditions and regulations
• Exchange rates
• ...
Social
• Applicable anywhere, anytime
• Impatience is rising: no commercials
• Fits with Millennial lifestyle
• Cord-cutti...
Technological
• Streaming service: availability due to
millions of concurrent customers
• Need for high internet speed
• R...
Porter’s five forces
Supplier power
• High – They created this marketplace
• Highly recognizable brand name –
“Netflix” has become a verb
• Glo...
Buyer power
• Low-Medium
• Netflix has to purchase the vast majority of its content
• In 2013 Netflix spent $2B for conten...
Product & tech
development
• Strong product – high quality content over high quality
signal and picture
• Sensitive to ban...
New market entrants
• New entrants & existing
companies meeting Netflix
in the cloud
• OTT – HBO GO/Showtime
• CBS All Acc...
Competitive rivalry
• Highly competitive environment
• OTT – HBO GO/Showtime
• CBS All Access
• Pay TV – On Demand
• Hulu ...
Competitive rivalry
Summary
Successes
• Market Creator
• Brand name recognition
• Creating content and
taking on traditional TV
format – and i...
summary
• How can they make more money?
• Business model works against them
• Must maintain low cost in environment where ...
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NETFLIX- swot pest porter v3

  1. 1. Kyle Robinson, Melissa Hawtin, Ariana D’Avanzo
  2. 2. Agenda • Introduction • Part I: SWOT Analysis • Part II: PEST Analysis • Part III: Porter’s Five Forces • Summary
  3. 3. Introduction • Started in late 90s with subscription service by mail • In 2015 they have over 65 million members in over 50 countries • Average 100 million hours of media consumption a day. This equals about 10 BILLION hours a month • Currently provide DVD-by-mail and streaming services • Streaming available via multiple platforms: Roku, Smart TVs, Blu-ray Disc players, gaming systems, tablets, smart phones and more
  4. 4. introduction • Library includes well over 100,000 titles – or a petabyte • Not just a content distributor – they are a content creator • Orange is the New Black, House of Cards, Narcos • Netflix has been nominated for and won Emmys, Academy Awards and Golden Globes
  5. 5. SWOT Analysis
  6. 6. Strengths • Global Market Leader • Strong Brand Recognition • High Customer Satisfaction • Affordable Pricing • Large Content Selection • Original TV Series • Available on multiple Platforms • Watch Unlimited Amount or “binge” watch • No Commercials
  7. 7. Weaknesses • Monthly Sign Up Fee • Older Titles • Share Decrease • User Friendliness • Password Sharing
  8. 8. Opportunities • Original Series • Further International Expansion • Show More Popular Content • Partnerships - Pre-installed Netflix • Expand Target Market – Diversification • Advertisements
  9. 9. threats • Streaming Competitors • Illegal Streaming • Higher Licensing Costs • Changing Customer Demands • New Entrants
  10. 10. Strengths  Opportunities • Use brand name to partner with stars and create more Original Series • Expand • Bid for more content to increase diversification • Partner with devices soon to be released
  11. 11. Weaknesses  Threats • Stay in tune with customer wants / needs to remain top streaming service • Focus on producing more original series and promoting these to remain competitive • Make app more user friendly • Increase advertisements to prevent rise in subscription cost
  12. 12. Pest analysis
  13. 13. Political • Piracy: illegal streaming of shows • Content and licensing agreements • Employee benefits • Only hires “fully formed adults” • International expansion • Plan to operate in at least 200 countries by the end of 2016 • $5 billion for global rights and acquisition fees and original content development • Anti-trust laws
  14. 14. Economic • International expansion • Economic condition • Labor: work force conditions and regulations • Exchange rates • Dependent on changes in consumer spending • Not a necessity • Take into consideration unemployment rates and interest rates
  15. 15. Social • Applicable anywhere, anytime • Impatience is rising: no commercials • Fits with Millennial lifestyle • Cord-cutting/streaming is the new social trend/direction for consumption • Variety of genres to fit all demographics • Binge-watching shows • Involved with and discussed on social media
  16. 16. Technological • Streaming service: availability due to millions of concurrent customers • Need for high internet speed • Recommended for you • Software applications that will make sure Netflix is perfect for any device • Global services • Keystone: New Data Pipeline • Manages 8 million events and 17 GB per second during peak
  17. 17. Porter’s five forces
  18. 18. Supplier power • High – They created this marketplace • Highly recognizable brand name – “Netflix” has become a verb • Global coverage – 50 countries with over 65M users. Almost 40% of users are outside the US • High quality entertainment – extensive content library and creating their own quality content • Relationships with customers – Price change in 2011 was HUGE PR nightmare
  19. 19. Buyer power • Low-Medium • Netflix has to purchase the vast majority of its content • In 2013 Netflix spent $2B for content in licensing rights. Most of that went to content they did not create • Limited number of studios – must provide what users want • As this space gets more competitive they will have less leverage as content creators will have more ways to distribute their content • Still the leading streaming entertainment service in the market- content creators MUST be on Netflix
  20. 20. Product & tech development • Strong product – high quality content over high quality signal and picture • Sensitive to bandwidth – as global data usage increases Netflix will need to monitor bandwidth issues • Alternatives – traditional TV, Hulu, Amazon, HBO Go, other OTT are priced the same. Parity in the market • Platform integration – must meet consumers where THEY want to watch. Must react to tech developments for tablets, phones, computers and more • Legislative Changes – keeping the internet free with no “priority pipes”
  21. 21. New market entrants • New entrants & existing companies meeting Netflix in the cloud • OTT – HBO GO/Showtime • CBS All Access • Pay TV – On Demand • Hulu Plus, Amazon TV • Relatively easy to enter this market for existing media companies • High cost of content will deter new entrants
  22. 22. Competitive rivalry • Highly competitive environment • OTT – HBO GO/Showtime • CBS All Access • Pay TV – On Demand • Hulu Plus, Amazon TV • Not all competitors are subscription services • YouTube • Crackle – Free service similar to Netflix that also has original web content
  23. 23. Competitive rivalry
  24. 24. Summary Successes • Market Creator • Brand name recognition • Creating content and taking on traditional TV format – and its working! Looking Forward • “New” entrants to their marketplace • Must keep creating content and find ways to keep people engaged • Continue to provide quality streaming service and picture quality across all platforms
  25. 25. summary • How can they make more money? • Business model works against them • Must maintain low cost in environment where costs keep going up • Increase advertisements?
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