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Market Analysis on Netflix

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Researched Netflix's existing market and recommended strategies for them to develop.
Conducted SWOT analysis, product and market analysis
Based on their market growth ad financial overview, developed marketing strategies
Developed BCG Matrix and understood Porter 5 forces to estimate the competitive strategy

Published in: Business

Market Analysis on Netflix

  1. 1. Agenda 1. Introduction 2. Vision & Mission 3. SWOT Analysis 4. Products and Marketing Strategies 5. Financial Overview 6. Culture at Netflix 7. Knowledge Management 8. Operational Plans 9. Corporate Strategies 10.Industry Forces 11. Global Management 12. Expansion 13. Innovation
  2. 2. Netflix - Introduction ● Founded in 1997 ● Headquartered in Los Gatos, California ● Offered DVD Home Delivery via snail mail ● 2001 announced intention to create a VOD business ● By the second quarter of 2014, there were more than 50 million subscribers globally
  3. 3. Vision ● Becoming the best global entertainment distribution service ● Licensing entertainment content around the world ● Creating markets that are accessible to filmmakers ● Helping content creators around the world to find a global audience
  4. 4. 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”
  5. 5. SWOT Analysis
  6. 6. Products Customers
  7. 7. Marketing Strategies Create Ubiquity Market a minimum viable product Give Prospects What They Don’t Know Want Quickly Abandon Dying Platforms Publish and Distribute
  8. 8. Netflix Financial Status Overview
  9. 9. Netflix Financial Status Overview
  10. 10. Netflix Advertising Expenditures As you can see, the majority of Netflix's advertising budget is dedicated to TV advertising. They fed that if the potential customer is already sitting in front of the TV, streaming movies through TV is something they would interest them.
  11. 11. Netflix’s Culture ● Values are what we Value ● We are like a pro sports team ● Freedom & Responsibility ● Context, not Control ● Pay Top of Market ● Promotions & Development
  12. 12. Life at Netflix
  13. 13. Management Structure
  14. 14. Knowledge Management ● Big Data o used to gather and analyze information for creation of original content ● Netflix Open Source Software Center (OSS) o repositories full of various cloud managing software o powered through github ● Orientation of values
  15. 15. Operational Plans ● Focus on personalized recommendations ● Create more original content ● Expand and grow to international markets ● Maintain good connections with ISPs
  16. 16. BCG Matrix Question Marks ● DVD-by-mail service Dogs Stars ● Streaming through 3rd party devices ○ PS4, Wii, Xbox Cash Cows ● Streaming Services ○ national ○ international
  17. 17. Porter Five Industry Forces Threat of New Entry - well established brand - some expense to enter industry - experience needed Overall: moderately low threat Competitive Rivalry - large number of competing companies - moderate customer loyalty - quick industry growth Overall: high threat Threat of Substitution - very easy to find an alternative product - moderate number of buyers Overall: moderate threat Supplier Power - moderate cost to switch suppliers - moderate number of suppliers - able to change and substitute Overall: moderate threat Buyer Power - many different customers - diversified customer base Overall: low threat
  18. 18. Global Management • Internet streaming media in more than 40 countries and continents like North America, South America(Except Cuba), Denmark, Ireland, Netherlands, Norway, Sweden, UK, France, Switzerland, Austria, Belgium, Germany • More than 50M worldwide subscribers
  19. 19. Management Strategy • Limited offer with low cost and low risk • Collect extensive data about what people like, structure programming and investment around consumer behavior • Time consuming process with lower profits
  20. 20. Expansion • Launched in Canada in 2010 • Started expanding in Latin American territories with content in English, Spanish and Portuguese • Plans of expansion in South East Asia, India and Japan
  21. 21. Challenges • Expansion needs scalability of database and servers • Cultural Exception Law in France • Competitors worldwide: Germany has free TV channels, Amazon Prime, HBO Online, Filmo TV • Payment Systems for customers in Latin America • Slower than expected subscriber growth in Europe
  22. 22. Innovation • DVD by Mail, Partnering with DVD manufacturers in 1997 • Stepping into Streaming in 2007 • Online Streaming, Application on consoles, Set top boxes • Profiles for users • Original Content
  23. 23. Original Content • House of Cards: Viewership surged 8 times on the release of second season • Orange is the New Black • Marco Polo(Upcoming)
  24. 24. Future- 5 Year Projection Look at the bigger picture -Francis Underwood • Further Expansion: Probably in Spain and Italy • Cable Network: Lowers risk on being only over internet • Delivering 4K over the net
  25. 25. References 1. Netflix Long Term View. (n.d.). Retrieved December 2, 2014, from http://ir.netflix.com/long-term-view.cfm 2. SWOT Analysis. (n.d.). Retrieved December 2, 2014, from http://netflixreport.wordpress.com/2014/02/10/swot-analysis/ 3. WikiWealth. (n.d.). Retrieved December 2, 2014, from http://www.wikiwealth.com/swot-analysis:nflx 4. Gianos, T. (2014, November 19). Node.js In Flames. Retrieved December 2, 2014, from http://techblog.netflix.com/ 5. Netflix: One Eye on the Present and Another on the Future - Knowledge@Wharton. (2009, October 28). Retrieved December 2, 2014, from http://knowledge.wharton.upenn.edu/article/netflix-one-eye-on-the-present-and-another-on-the-future/ 6. Favero, J. (2014, October 14). Big Data application in Knowledge Management. Retrieved December 2, 2014, from http://globalknowledgemanagement.org/2014/10/04/big- data-application-in-knowledge-management/ 7. 4K, N. (2014). Netflix: We're already thinking beyond 4K. [online] TechRadar. Available at: http://www.techradar.com/us/news/television/netflix-beyond-4k-and-the-future-of- your-tv-1222761 [Accessed 2 Dec. 2014]. 8. Cheredar, T. (2013). Here's how Netflix sees the future of TV. [online] VentureBeat. Available at: http://venturebeat.com/2013/04/24/heres-how-netflix-sees-the-future-of-tv/. 9. Culp, C., Lincoln, G., Friedman, M. and Reeve, Q. (2014). Netflix: Past, Present, and Future Innovation. 1st ed. Entrepreneurship & Innovation Strategy. 10. Forbes, (2011). How Netflix Innovates and Wins. [online] Available at: http://www.forbes.com/sites/chunkamui/2011/03/17/how-netflix-innovates-and-wins. 11. Hall, E. (2014). Netflix Braves Cultural Barriers for European Expansion. [online] Adage.com. Available at: http://adage.com/article/global-news/netflix-braves-cultural- barriers-european-expansion/295035/ [Accessed 2 Dec. 2014]. 12. Pepitone, J. (2014). Netflix launches user profiles for individual recommendations. [online] CNNMoney. Available at: http://money.cnn.com/2013/08/01/technology/innovation/netflix-profiles/ [Accessed 2 Dec. 2014]. 13. Pomerantz, D. (2014). Netflix's Brilliant Marketing Tool: Ratings Silence. [online] Forbes. Available at: http://www.forbes.com/sites/dorothypomerantz/2014/02/19/netflixs- brilliant-marketing-tool-ratings-silence/ [Accessed 2 Dec. 2014]. 14. Recorded Future, (2013). Viewership Analysis of Hit Show 'Orange Is the New Black'. [online] Available at: https://www.recordedfuture.com/orange-is-the-new-black- viewership/ [Accessed 2 Dec. 2014]. 15. Seward, Z. (2014). The track-changes version of Netflix’s vision for the future of TV. [online] Quartz. Available at: http://qz.com/203192/the-track-changes-version-of-netflixs- vision-for-the-future-of-tv/ [Accessed 2 Dec. 2014]. 16. Solsman, J. and googleplus, (2014). Netflix invades Europe: Why expansion beyond the US is so critical - CNET. [online] CNET. Available at: http://www.cnet.com/news/netflix-invades-europe-why-international-expansion-is-so-critical/ [Accessed 2 Dec. 2014]. 17. Steel, E. (2014). How to Build an Empire, the Netflix Way. [online] Nytimes.com. Available at: http://www.nytimes.com/2014/11/30/business/media/how-to-build-an-empire- the-netflix-way-.html?_r=1 [Accessed 2 Dec. 2014]. 18. Steel, E. (2014). Netflix, Growing, Envisions Expansion Abroad. [online] Nytimes.com. Available at: http://www.nytimes.com/2014/07/22/business/media/netflix-says-it- topped-50-million-subscribers.html [Accessed 2 Dec. 2014]. 19. Team, T. (2013). Sizing Up Netflix's International Subscriber Growth Potential. [online] Forbes. Available at: http://www.forbes.com/sites/greatspeculations/2013/03/05/sizing-up-netflixs-international-subscriber-growth-potential/ [Accessed 2 Dec. 2014]. 20. Variety, (2014). Variety. [online] Available at: http://variety.com/2014/digital/news/netflix-originals-house-of-cards-orange-is-the-new-black-watched-by-fewer-than-half-of- subs-study-finds-1201277702/ [Accessed 2 Dec. 2014]. 21.
  26. 26. Thank You

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