2. Agenda
History
Company Overview
Mission and Vision
Netflix: Mind Map
Technology Tools
How does it work
Current State of Technology
IT Business Alignment
Technology Strategy
Analysis- Lock in, SWOT, Porters
Recommendation and Conclusion
3. History
1997: NetFlix.com, Inc. California by Reed Hasting and
Marc Randolph.
1998: Begins offering DVD rentals and sales
1999: Group Arnault invests $30 million in the firm
2000: Revenue sharing deals Warner Brothers and
Columbia film studios
2001: Partnership with Best Buy
2002: Publically listed: Netflix, Inc.
2003: Subscribers top 1,000,000
2007: Billionth DVD Delivery
2009: Customer Satisfaction Index score -86
Current:55 million discs, ships 1.9 million DVDs to
customers each day
4. Company Overview
Headquarters: Los Gatos
Founded: 1997
CEO: Reed Hastings ,founder
Employees: 2670 FTE
Films: 100,000 titles
Distribution centers: 55
Subscribers: 10 million
Revenue: US$ 1.365 billion (2008)
5. Mission and Vision
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.
Vision:
Keeping the LEADING position in the
industry
6. Netflix: Mind Map
Faster internet?
Competitive
Customers want the best
New Tec’s
service & at a low cost?
Something that would
How can we use the new
fit With our
Tech to achieve that?
strategy..!!
7. Technology Tools
Game Console
Vizio/ Roku
X Box
Streaming
360
Blue
Tivo Ray
DVR Samsung/ LG
disc
9. Technology Strategy
Why has Netflix survived when so many other
Internet startups have failed?
Timing of entry - DVD adopters on Usenet groups
First Mover – Brand Loyalty and Technological
Leadership
Dominant Design- Roku Digital Video Player
Strategic Partners – Netflix partner’s with the
movie industry, the consumer-electronics
industry, and retailers. Roku set-top
10. Current State Technology
• Measuring customer response
• Delivery and presentation of personalized
Customer
information
Analysis
• Matchmaking
• Building Customer Profiles
Data Mining
• Collecting Customer Data
• Securing the Customer Data
Info
mediation
11. IT/Business Alignment
Technology
• Keeping the Alignment IT
needs and
• Great website, fair
/Business
resources
pricing and easy LEADING
Goals
access to position in the
information
industry
• Using the latest
• Providing the
technology to
Business BEST online
enhance the
Market
needs and
website features rental movie
Needs and resources experience
resources
12. Lock In cycle
Brand Selection
No.1 Brand, Online
streaming, rental by
mail
Lock in
consistent and high- Sampling
quality user Free Trial, Gift Card
experience at no
additional Charges
Entrenchment:
Streaming
movies, Strategic
partners, internet
community
13. Growth-Share Matrix
Relative Market Share
High Low
High
Star Question
Mark
Netflix
Market
Growth
Rate
Cash cows Dogs
Low
14. Competitive Analysis
#1 #2 #3 #4 #5
Excellent
Very Good
Good
Fair
Netflix Blockbuster DVD Avenue Cafedvd EHit
Poor
Ratings
Inventory
Membership Features
Movie Arrival Time
Movie Information
Overall Rating
*Source -http://dvd-rental-review.toptenreviews.com/
15. Porter's Five Forces
Threat of
Strong ->
Potential
Medium
Entrants
Major Players
Strong ->
M&A
Stronger
Demand <
Supply
No switching
cost
Industry Suppliers
Buyers Power
Competition Power
Strong -> Stronger Weak -> Weak
Rapidly growth Internet Channel
market Transform to
Medium -
Online service
>Stronger
Download
Threat of
Service, IPTV
Substitutes
16. SWOT Analysis
Strong Brand identity
Experience
Lead market share of online
Strong suppliers
rentals
W
Volatility in performance
S
Low fixed costs
Studios define release
Free DVD Shipping and
Postage
Worlds largest selection of
DVDs
Over 90% of DVD's are
received by customers within
one day of ordering Strong
website
17. SWOT Analysis
Studios may form
Pricing segmentation
alliances
(i.e., different plans)
with bigger players
Digital delivery
Loss of reputation
T
Other types of rentals
O Competition from VHS
(Video games,Books) Risk of Malware
Global Markets Growth rate changes
Rapid advancement in
technology
18. Recommendation
Innovate and enrich customer
experience.
Increase the prominence of new
releases and work with music
labels.
Marketing Initiatives
Capture New Customers and New
Markets