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Netflix

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Created for Corporate Strategy Course, Chapman University, MBA

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Netflix

  1. 1. Chris  Helvajian,  Katie  Irvine,  Vas  Kypreos,  Armen  Sarkisian  &  Charles  Vickery  
  2. 2. Company  History   Founded  by  Reed  Hastings   •  1997   •  Los  Gatos,  CA   DVD-­‐by-­‐mail   •  No  late  fees   •  Customer-­‐centric   Keys  to  success   •  Managed  to  defeat  Blockbuster  &  Wal-­‐Mart   •  Core  values   Background - Industry - SWOT - SFAS - Porters 5 Forces - Tows
  3. 3. Type  of  Company  &  Size   Publically  traded  on  NASDAQ   •  NFLX   •  127%  return  YTD   Strong  operations   •  50  warehouses  with  100,000  titles  each   •  Shipped  2  billionth  title  in  2009   Culture   •  9  cognitive  skills   •  The  Keeper  Test   •  Freedom  Inc:  “If  you  put  fences  around  people,  you  get  sheep”   Background - Industry - SWOT - SFAS - Porters 5 Forces - Tows
  4. 4. Markets  Served   Some  Facts:   -­‐  14  million  subscribers   -­‐  97%  live  within  1  day  delivery  zone   -­‐  Uses  “The  Long  Tail  Effect”   -­‐  Streams  to  game  consoles  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  5. 5. Types  of  Products  &  Services   DVD-­‐by-­‐Mail   -­‐  Movies   -­‐  Television  Shows   Streaming  to  Game  Consoles   -­‐  Nintendo  Wii,  XBox   Services   -­‐  Recommendation  system   -­‐  Web  site,  iPad/iPhone  Apps   -­‐  Envelopes  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  6. 6. Industry  Analysis   Market  Share   Traditional   Non  -­‐  Traditional   Niche  Web  Sites   -­‐  puritanpicks.com  (Religious),  goflicks.com  (Adult)  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  7. 7. Describing  the  Customer   Upwardly   Time   Social  TV/ mobile  yet   availability   movie  watcher,   entertainment   offers  this   interested  in   aware  early   consumer  the   the  experience   adopter   most  viewing   of  communal   opportunities   viewing  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  8. 8. SWOT  Analysis   Subscription  Model   Range  of  content   Strengths   Strategic  alignment   Financial  position  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  9. 9. SWOT  Analysis   Shipping  costs   Streaming  capabilities   Weaknesses   Distribution  time  delay   Logistical  issues  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  10. 10. SWOT  Analysis   Streaming  to     Apple  iPad  and  iPhone   game  consoles   Opportunities   Advertising  on  Netflix   Content  acquisition  of   envelopes   video  games  Background - Industry - SWOT - SFAS - Porter’s 5 Forces - TOWS
  11. 11. SWOT  Analysis   Competition  from   Competition  from  Mom   Redbox   &  Pop  shops   Threats   VOD  Programming   Studio  power  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  12. 12. Strategic  Factor  Analysis  Summary  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  13. 13. Risk  Analysis:  Threat  of  New  Entrants   Large   capital   expense   Moore’s   Law   Low   Complex   logistics   Streaming   costs  are   low  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  14. 14. Risk  Analysis:  Threat  of  Competitive  Rivalry   Blockbuster,   Redbox,   iTunes,  VOD   Competitors   are  aggressive   High   Switching  costs   are  low   Price,   distribution,   inventory   differentiation  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  15. 15. Risk  Analysis:  Threat  of  Substitutes   Consumer   behavior  treats   each  product   differently   High   Passive   Interactive   entertainment   social  media   is  a  social  norm   Kindle,  iPad,   video  games,   web  surfing  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  16. 16. Risk  Analysis:  Bargaining  Power  of  Buyers   Tiered   pricing   strategy   Low   Blacklist   Eliminating   profit   costs  is  not   sucking   an  option   customers   Piracy  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  17. 17. Risk  Analysis:  Bargaining  Power  of  Suppliers   Control   delivery,   content,   timing   Firms   High   Strategic   offering  VOD   alliances  in   have  close   ties  with  large   Hollywood   are  complex   studios   Litigious   industry  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  18. 18. TOWS  Matrix  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  19. 19. Strategic  Recommendations:  SO  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  20. 20. Strategic  Recommendations:  WO  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  21. 21. Strategic  Recommendations:  ST  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  22. 22. Strategic  Recommendations:  WT  Background - Industry - SWOT - SFAS - Porters 5 Forces - TOWS
  23. 23. Conclusion  
  24. 24. Conclusion   Questions?  

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