A strategic approach on Netflix and the impact of their adopted strategies from time to time.

1. Group D10
Gabriela D’cunha –
14052
Genevieve Nora Dias –
14053
Jovita Francy Dcosta –
14056
Manisha Kumari – 14058
Mario Allen Clement –
MODULE 2
NETFLIX
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2. CONTENT
Netflix – An Intro
Mission, Vision and Value
Presence
Netflix Business model and Pricing
Subscription based business model
Strategy Adopted & Market Trends
Technology Channels & Subscribers
Qwickster and Netflix
PEST analysis, Five forces analysis & SWOT Analysis
Financial Summary
Is Netflix Attractive???
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3. NETFLIX – AN INTRO
An American provider of on-demand Internet
streaming media
North America
Australia
New Zealand
South America
Parts of Europe
Flat rate DVD-by-mail in the United States
DVDs and Blu-ray are sent via Permit Reply Mail.
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4. MISSION, VISION AND
VALUE
Netflix referred to its brand promise as a
Values - Judgment, Productivity,
Creativity, Intelligence, Honesty,
Communication, Selflessness, Reliability,
Passion.
At Netflix, we seek to be the highest quality subscription business
that offers Internet streaming and DVD by mail content (2). We
believe in offering the best customer service possible by teaching
our employees to be honest, respectful and ethical (6) while also
valuing every customer’s individual needs. Our employees (9) are
provided with the latest technologies, excellent benefits, and the
safest working conditions in the industry. We provide outstanding
customer service and in return, our customers (1) in our North
American and Mexican markets (3) recommend their friends to
Netflix (5). Our vast library of DVD’s and streaming service (4)
provides a competitive advantage (7) as compared to offering only
streaming. At Netflix, we strive to be a good corporate citizen (8).
1.Customers
2.Products or services
3.Markets
4.Technology
5.Concern for survival
6.Philosophy
7.Self-concept
8.Concern for public
image
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5. PRESENCE
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6. NETFLIX BUSINESS
MODEL AND PRICINGDVD and Video Game Model Online Streaming Model
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7. SUBSCRIPTION BASED
BUSINESS MODELThe DVD-by-Mail option:
Netflix website
Select one or more movies
Received DVDs by first class mail
2004-10 added more distribution channel
The streaming option
Instant watching capability
Licensing increasing amount of digital content
Netflix took a “metered” approach to streaming
Switched to an unlimited streaming option
2011- No single subscription plan
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8. STRATEGY ADOPTED
 A comprehensive library of movies & TV
episodes.
 New content acquisition.
 Convenient & easy-to-use movie selection
software.
 A choice of mail delivery vs. streaming.
 Marketing & advertising.
 Transitioning to internet delivery of content.
 Expanding internationally.
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9. MARKET TRENDS
Renting movies & TV content - streaming movies
& TV shows
Strategic initiatives:
The owners of Hulu offered a free online video service
TV everywhere concept & program offerings
Google TV
Apple TV
Reasons
Introduction of new technologies & electronic products
Increasing number of devices
Wide variety of distribution channels & providers
Experimenting Movie Studios with shortened release
periods
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10. 10

11. TECHNOLOGY
CHANNELS
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12. SUBSCRIBERS
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13. QWICKSTER AND
NETFLIX
In September 2011, split off the DVD rental
business.
Into a new company called Qwickster.
NetFlix loses 800,000 customers.
Stock prices falls from $295 to $108/share.
In October 2011, decides to NOT split off the DVD
business.
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14. PEST ANALYSIS
Political
Piracy.
Content licenses and
copyright.
Economical
Unlimited market size.
Social
Wish to watch on tv
screen.
 Applicable everywhere.
Technological
VOD increased
popularity.
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15. 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 substitutes)
Bargaining power of suppliers – high (content is key)
Intensity of rivalry – high (HBO, low entry barriers)
Complementors – high (Microsoft, Wall-Mart, Roku, Vizio,
LG)
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16. SWOT ANALYSIS
Strengths
User Experience
Streaming Capability
Very competitive prices
Weakness
Pricing power
Content Distribution
Competitors
Opportunity
Branding
Distribution
Expansion
Threats
Internet pipe providers
Competition
Streaming Offerings
NETFL
IX
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17. FINANCIAL SUMMARY
Fit for Purpose Balance Sheet
40% of assets are content related
High cash balances / Bank revolver
capacity
Investment in Technology
Other Considerations
Cost pressure (competition, streaming video and international
expansion)
Investors have significant expectations
Ability to monetize subscriber growth
Average subscriber growth 40%
Manage churn rate below market average
Focus on internal cost management
Maintain healthy gross margins
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18. IS NETFLIX
ATTRACTIVE???
Global Expansion.
Australia to be more attractive.
Expected to make profits from 2017.
 Flexibility in Business
 Marketing
Opportunity if Apple acquires Netflix.
 Innovation.
 Strong Alliances.
 Quality, Brand and Size.
 Cost Management.
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19. THANK YOU
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