Netflix was founded in 1997 by Reed Hastings and is headquartered in Los Gatos, CA. It began as a DVD-by-mail service with no late fees and good customer service. Netflix has grown significantly and now has over 14 million subscribers who it serves through streaming and DVDs. The company faces competition from services like Redbox but has been able to grow through its large library of content and focus on customer experience.

1. Chris
Helvajian,
Katie
Irvine,
Vas
Kypreos,
Armen
Sarkisian
&
Charles
Vickery

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 - Porter's 5 Forces - Tows

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 - Porter's 5 Forces - Tows

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 - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

6. Industry
Analysis
Market
Share
Traditional
Non
-­‐
Traditional
Niche
Web
Sites
-­‐
puritanpicks.com
(Religious),
goflicks.com
(Adult)
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

8. SWOT
Analysis
Subscription
Model
Range
of
content
Strengths
Strategic
alignment
Financial
position
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

9. SWOT
Analysis
Shipping
costs
Streaming
capabilities
Weaknesses
Distribution
time
delay
Logistical
issues
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

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. SWOT
Analysis
Competition
from
Competition
from
Mom
Redbox
&
Pop
shops
Threats
VOD
Programming
Studio
power
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

12. Strategic
Factor
Analysis
Summary
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

13. Risk
Analysis:
Threat
of
New
Entrants
Large
capital
expense
Moore’s
Law
Low
Complex
logistics
Streaming
costs
are
low
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

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 - Porter's 5 Forces - TOWS

18. TOWS
Matrix
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

19. Strategic
Recommendations:
SO
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

20. Strategic
Recommendations:
WO
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

21. Strategic
Recommendations:
ST
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

22. Strategic
Recommendations:
WT
Background - Industry - SWOT - SFAS - Porter's 5 Forces - TOWS

23. Conclusion

24. Conclusion
Questions?