Capstone presentation on Netflix

2. Content
Company profile
PEST analysis
Five forces analysis
Value chain
Canvas model
Core problem
Differentiation matrix
Canvas model +5
Strategy

3. No mission and vision!
Statement
Becoming the best global entertainment
distribution service
Licensing entertainment content around the
world
Creating markets that are accessible to film
makers
Helping content creators around the world
to find a global audience

4. Company profile
Founded in 1997
Flat rate DVD by mail
Data mining
Successful transition to streaming content
>40M members, > 1 billion hours of TV Shows and movies per month

6. PEST analysis
Political
Social
Piracy
Wish to watch on tv screen, applicable
Content licenses and copyright
everywhere
Economical
Technological
Unlimited market size
VOD increased popularity, Need for high
Technology applicable for all countries
internet speed

7. Five forces analysis
Threat of new entrants – high (Apple, Amazon, Hulu, Youtube)
Threat of substitutes – high (Apple TV, Hulu)
Bargaining power of customers – high (a lot of choice for substitutes)
Bargaining power of suppliers – high (content is key)
Intensity of rivalry – high (HBO, low entry barriers, major players present)
Complementors – high (Microsoft, Wall-Mart, Roku, Vizio, LG)

8. Market Life Cycle

9. Value chain Model

10. Canvas Model

11. SWOT analysis
Strenghts – Data, experience, # shows and movies
Weaknesses – Fixed costs, high debt, system not flexible
Opportunities – Europe, NEM, original content
Threats – changing technology, rising prices, competitive markets

12. Confrontation matrix
SWOT
Europe
NEM
Content
Data
++
+
-
Exp.
++
+
#
++
Fixed
Tech
Prices
Markets
+
o
++
-
+
++
++
++
+
++
++
++
+
+
+
--
+
+
Debt
o
o
--
--
--
-
System
-
--
o
--
o
-

13. Core problem
Threat of all five forces is high
Power of suppliers and buyers is especially high
Netflix is stuck between powers

14. Canvas Model +5

15. Strategy
Pursue market penetration strategy by excellent service and low prices
Focus on creating its own content to maintain competitive advantage
Increase its innovation budget by 5% next year and continue to do so
Use pricing as a last resort measure to increase margin
Choose to stream content only, milk its mailing DVD’s within the next 5 years
Create more partnerships to create perfect hardware platform for its software
Continue its high availability distribution strategy