Case Study Netflix
1.) Explain Netflix’s marketing strategy. Can it sustain its competitive advantage? Why or why not?
Netflix’s idea was excellent. They had the idea to offer consumers a reasonably low flat fee to rent unlimited amount of DVDs. As fast as a customer could watch a movie and mail it back, the customer would receive another from their rental queue. The customer pays their money and they end up saving a lot on rental fees because they are promised new movies within a day of the delivery of the movie that they returned in a pre-paid envelope. One of the reasons that Netflix has been able to maintain their competitive advantage is the due to many people have already chosen Netflix as their online movie rental choice and it would be very hard for a new comer to take Netflix's business. It would also be very hard to offer the same choices at the same price, and a lower price. Another reason that Netflix can sustain its competitive advantage is due to the theory of first-mover advantage.
2.) Perform a SWOT analysis for Netflix. What are its biggest threats? Which opportunities should it pursue?
Weaknesses
* Reduced demand for high price subscriptions * Reliance upon business partnerships may increase acquisitions and licensing costs * Loss of key partnerships limited streaming content * Lack of updating movie content * Reliance on studio agreement to secure content
Weaknesses
* Reduced demand for high price subscriptions * Reliance upon business partnerships may increase acquisitions and licensing costs * Loss of key partnerships limited streaming content * Lack of updating movie content * Reliance on studio agreement to secure content
Strengths
* Effectiveness of marketing programs * Flexibility in content delivery * Inflexibility in case competitions * Selection attracts customers * The internet allows large-selection inventory that other companies can’t * Customers get movies that match
Netflix’s idea was excellent. They had the idea to offer consumers a reasonably low flat fee to rent unlimited amount of DVDs. As fast as a customer could watch a movie and mail it back, the customer would receive another from their rental queue. The customer pays their money and they end up saving a lot on rental fees because they are promised new movies within a day of the delivery of the movie that they returned in a pre-paid envelope. One of the reasons that Netflix has been able to maintain their competitive advantage is the due to many people have already chosen Netflix as their online movie rental choice and it would be very hard for a new comer to take Netflix's business. It would also be very hard to offer the same choices at the same price, and a lower price. Another reason that Netflix can sustain its competitive advantage is due to the theory of first-mover advantage.
2.) Perform a SWOT analysis for Netflix. What are its biggest threats? Which opportunities should it pursue?
Weaknesses
* Reduced demand for high price subscriptions * Reliance upon business partnerships may increase acquisitions and licensing costs * Loss of key partnerships limited streaming content * Lack of updating movie content * Reliance on studio agreement to secure content
Weaknesses
* Reduced demand for high price subscriptions * Reliance upon business partnerships may increase acquisitions and licensing costs * Loss of key partnerships limited streaming content * Lack of updating movie content * Reliance on studio agreement to secure content
Strengths
* Effectiveness of marketing programs * Flexibility in content delivery * Inflexibility in case competitions * Selection attracts customers * The internet allows large-selection inventory that other companies can’t * Customers get movies that match