Running head: SWOT ANALYSIS OF PUBLICLY HELD COMPANY: NETFLIX 1 SWOT ANALYSIS OF PUBLICLY HELD COMPANY: NETFLIX 2 SWOT Analysis of Publicly Held Company: Netflix Abstract Netflix is a company that is credited with disrupting the market for video rentals, cable television and now television and film production with it streaming services. Customers were tired of the high prices of cable television and video rental late fees. They found the streamlined and efficient approach, which allows for unlimited viewing of movies and shows in its inventory for one low price, extremely attractive. The company was founded in 1997, and it became a publicly traded company in 2002. In that time it ha become a global presence and market leader. The strategic focus of Netflix was to break down a business model for entertainment that was bloated, expensive and did not result in unlimited options. The company today is no longer the disruptor, but the one that needs to be concerned with innovators, copycat competitions and the next new business model. This paper provides an analysis of the strengths, weaknesses, opportunities and threats facing the company. SWOT Analysis of Publicly Held Company: Netflix Netflix is a company that is credited with disrupting the market for video rentals, cable television and now television and film production with it streaming services. Customers were tired of the high prices of cable television and video rental late fees. They found the streamlined and efficient approach, which allows for unlimited viewing of movies and shows in its inventory for one low price, extremely attractive. The company was founded in 1997, and it became a publicly traded company in 2002 (Burroughs, 2018). In that time it ha become a global presence and market leader. Strengths Netflix has so many strengths, and these were displayed when the company took down the entire video rental industry, including the enormous Blockbuster Video chain, with its simple use of technology to make watching content more convenient. Specifically the strengths of Netflix have been horizontal growth, vertical growth, innovation and cultural relevance. The strength of Netflix is its horizontal expansion, resulting in wide distribution which includes nearly 200 countries, almost 100 million subscribers and revenues of $7 billion per year (Dias & Navarro, 2018). Vertical growth, by getting deeper into content production, is a defining feature of the brand, and it was initially wildly successful. Netflix is also considered a leader in a cutting edge and innovative area of data science, which is used in its recommender systems (Walker, Jeffery, So, Sriram, Nathanson, Ferreira, & Merkley, 2017). Netflix use became iconic in Western culture, particularly because it facilities binge watching of an entire season or series at once, and this has become a cultural reference point (Jenner, 2018). Weaknesses The weaknes.

1. Running head: SWOT ANALYSIS OF PUBLICLY HELD
COMPANY: NETFLIX 1
SWOT ANALYSIS OF PUBLICLY HELD COMPANY:
NETFLIX 2
SWOT Analysis of Publicly Held Company: Netflix
Abstract
Netflix is a company that is credited with disrupting the market
for video rentals, cable television and now television and film
production with it streaming services. Customers were tired of
the high prices of cable television and video rental late fees.
They found the streamlined and efficient approach, which
allows for unlimited viewing of movies and shows in its
inventory for one low price, extremely attractive. The company
was founded in 1997, and it became a publicly traded company
in 2002. In that time it ha become a global presence and market
leader. The strategic focus of Netflix was to break down a
business model for entertainment that was bloated, expensive
and did not result in unlimited options. The company today is
no longer the disruptor, but the one that needs to be concerned
with innovators, copycat competitions and the next new
business model. This paper provides an analysis of the
strengths, weaknesses, opportunities and threats facing the
company.
SWOT Analysis of Publicly Held Company: Netflix
Netflix is a company that is credited with disrupting the market

2. for video rentals, cable television and now television and film
production with it streaming services. Customers were tired of
the high prices of cable television and video rental late fees.
They found the streamlined and efficient approach, which
allows for unlimited viewing of movies and shows in its
inventory for one low price, extremely attractive. The company
was founded in 1997, and it became a publicly traded company
in 2002 (Burroughs, 2018). In that time it ha become a global
presence and market leader.
Strengths
Netflix has so many strengths, and these were displayed when
the company took down the entire video rental industry,
including the enormous Blockbuster Video chain, with its
simple use of technology to make watching content more
convenient. Specifically the strengths of Netflix have been
horizontal growth, vertical growth, innovation and cultural
relevance. The strength of Netflix is its horizontal expansion,
resulting in wide distribution which includes nearly 200
countries, almost 100 million subscribers and revenues of $7
billion per year (Dias & Navarro, 2018). Vertical growth, by
getting deeper into content production, is a defining feature of
the brand, and it was initially wildly successful. Netflix is also
considered a leader in a cutting edge and innovative area of data
science, which is used in its recommender systems (Walker,
Jeffery, So, Sriram, Nathanson, Ferreira, & Merkley, 2017).
Netflix use became iconic in Western culture, particularly
because it facilities binge watching of an entire season or series
at once, and this has become a cultural reference point (Jenner,
2018).
Weaknesses
The weaknesses internal to Netflix include the outcomes
from its success in expansion both horizontally and vertically.
There are allegations that the global presence and production
leaves the company spread too thin (Singer, 2018). Recently
there have been criticisms of new Netflix productions, including
consensus that Netflix is failing to achieve the same level of

3. quality (Singer, 2018). This is an internal and controllable
factor. While Netflix has been very focused on the efficiency of
the technical aspects of operations, it has not always managed
to recognize how to achieve the same level of performance in
producing content.
Another weakness is the transparency of the model and its
innovations. The success of Netflix has often been attributed to
its advanced approach to data and algorithms, but with each
hard won innovation had come the ability for other companies
to simply mimic the advantage. (Walker et al., 2017). Netflix
has to worry about established companies with the resources
needed to invest in strategically overtaking the market position,
as well as young and emerging startups that might do to Netflix
what Netflix did to Blockbuster. Netflix will have to be agile
enough to reinvent themselves in light of new trends and
technologies, are be relegated to the same history as the
companies that were overtaken with its operations.
Opportunities
Opportunities are defined as external realities that are outside
of corporate control. There are at least ten opportunities that
Netflix can pursue:
· Continued expansion into new markets through expansion of
subscriber base;
· Continued customization of interface, content and promotion
to different regions, especially in emerging economies such as
India;
· Reduction of costs through continual improvement of
efficiency in process;
· Promoting productions and partnered opportunities related to
merchandizing, as well as subscriptions to the service;
· Build on strengths in data science and algorithmic models to
form a new company which serves other internet based
companies (Walker et al., 2017);
· Leverage more local resourcing in the outsourcing of content
production, but with a greater focus on quality, including cross
cultural aspects such as the quality of dubbed versions or those

4. with subtitles;
· Acquiring startups that might compete with Netflix when they
appear to get market traction as a means of reducing
competition and supporting horizontal expansion;
· Expansion into user created content, and the ability to compete
with the internet giant YouTube;
· Investment in quality of content with the same focus that has
been given to technical aspects; and
· Making an even greater investment in the implementing and
promoting services in emerging economies, particularly Africa,
Southeast Asia, China and South America.
Threats
There are ten threats to Netflix, which include:
· The ease with which the business model could be copied
creates a great threat;
· There is increased new entrants because of this problem;
· This results in increased competitive forces as the market
becomes more crowded;
· There is more pressure on efficiency if price becomes a
competitive point;
· Many new markets where Netflix does not have a strong
presence will already be penetrated by competitors, such as
markets in Southeast Asia and China;
· Netflix faces serious substitution competition from YouTube,
Vevo and similar sites which distribute user produced content;
· The reputation of Netflix could rapidly impair the value of the
company if quality of original content keeps dropping;
· Established entertainment companies with vast resources to
invest, such as Disney, intend to compete directly for Netflix’s
market position;
· Much of the value of Netflix has been in the form of continued
investments in expansion of production, distribution and
promotion, and a failure to capitalize on these investments risks
everything; and
· Netflix operates out of one of the most expensive places in
Silicon Valley, and this is not efficient or cost-effective.

5. Conclusion
The strategic focus of Netflix was to break down a business
model for entertainment that was bloated, expensive and did not
result in unlimited options. The company today is no longer the
disruptor, but the one that needs to be concerned with
innovators, copycat competitions and the next new business
model.
References
Burroughs, B. (2018). House of Netflix: Streaming media and
digital lore. Popular Communication, 1-17.
Dias, M., & Navarro, R. (2018). Is Netflix Dominating
Brazil. International Journal of Business and Management
Review, 6(1), 19-32.
Jenner, M. (2018). ‘Quality’, ‘Popular ‘and the Netflix Brand:
Negotiating Taste. In Netflix and the Re-invention of
Television(pp. 139-160). Palgrave Macmillan, Cham.
Singer, M. (2018) Netflix is creating a future of film that looks
a lot like its past. Screen Crush. Retrieved from:
http://screencrush.com/netflix-movies-are-like-1950s-television/
Walker, R., Jeffery, M., So, L., Sriram, S., Nathanson, J.,
Ferreira, J., ... & Merkley, G. (2017). Netflix leading with data:
The emergence of data-driven video. Kellogg School of
Management Cases, 1-19.
External Factors
Weight
Rating
Weighted Score
Comments
Opportunities
0.00-0.1
5.0-1.0

6. Threats

7. Total
1.0

8. It is important to remember that whenever working with
weighted averages, the weight column should always total 1.0,
or 100%, regardless of how many factors are included in the
EFAS analysis. It is up to the analyst to decide how much
weight each individual external factor is assigned. An important
factor may have a weight of 0.5 (50%) while a less important
factor may have a weight of .05 (5%). When all is finished,
however, all factor weights should total 1.0 or 100%. Please
also note that the total weighted score for an average firm in an
industry is always 3.0. When the EFAS analysis is complete, the
subject company weighted score is evaluated against the
industry average score of 3.0 to determine how well it is doing.
A weighted total score greater than 3.0 indicates the subject
company is doing better than the average industry firm. A
weighted average score less than 3.0 indicates that the subject
company is doing worse than the average industry firm.
In this section, add your commentary about if the company is
doing better or worse than others in the same industry. At the
end of this section, add any references you may have used for
the assignment.