Case Study Paper
Netflix Case Study Analysis
Hesham Elakbawy, Ashley Guzman, Sa-ad Iddrisu, Emmanuel Kingsley, and Edna Semblay
EXECUTIVE SUMMARY Netflix was founded in Scotts Valley, California, in August of 1997 by CEO Reed Hastings and Marc Randolph. In the late-nineties, internet retailing was in its infancy and the climate was just right for Netflix to embark on the DVD business. Few competitors were also in the business, encouraging the company to establish their brand name. Since they were the primary company in the industry, this allowed them to offer a great variety of DVDs to consumers in comparison to the competition. From the onset of Netflix 's inception, they began to advertise extensively utilizing many different mediums such as newspapers, magazines, TV commercials as well as online advertising. Today, Netflix has approximately 58 distribution centers, which gives the company the capability to serve over 97 percent of its subscribers in approximately one business day. Netflix differentiates themselves by charging customers on a base subscription fee of $7.99 a month rather than the traditional per title fee charged by many of their competitors. They also do not charge any late fees unlike their competitor, Blockbuster Inc. These features of Netflix and the evolution of streaming video have helped increase revenues in the year 2011 to $3,204,577,000, which is a 48% increase in comparison to revenues from 2010. Currently, Netflix Inc is faced with an onslaught of competitors such as Hulu, Blockbuster, Comcast and many other online movie sites.
SUMMARY/OUTLINE This case study has centered on several thematic areas. The history of Netflix touches upon when it was formed, the idea behind it, the founders, management, the rise and fall of Netflix as well as the company’s resurgence as a profitable company once again. The business strategy of Netflix in this report centers on the strategies that Netflix has adopted to be
Hesham Elakbawy, Ashley Guzman, Sa-ad Iddrisu, Emmanuel Kingsley, and Edna Semblay
EXECUTIVE SUMMARY Netflix was founded in Scotts Valley, California, in August of 1997 by CEO Reed Hastings and Marc Randolph. In the late-nineties, internet retailing was in its infancy and the climate was just right for Netflix to embark on the DVD business. Few competitors were also in the business, encouraging the company to establish their brand name. Since they were the primary company in the industry, this allowed them to offer a great variety of DVDs to consumers in comparison to the competition. From the onset of Netflix 's inception, they began to advertise extensively utilizing many different mediums such as newspapers, magazines, TV commercials as well as online advertising. Today, Netflix has approximately 58 distribution centers, which gives the company the capability to serve over 97 percent of its subscribers in approximately one business day. Netflix differentiates themselves by charging customers on a base subscription fee of $7.99 a month rather than the traditional per title fee charged by many of their competitors. They also do not charge any late fees unlike their competitor, Blockbuster Inc. These features of Netflix and the evolution of streaming video have helped increase revenues in the year 2011 to $3,204,577,000, which is a 48% increase in comparison to revenues from 2010. Currently, Netflix Inc is faced with an onslaught of competitors such as Hulu, Blockbuster, Comcast and many other online movie sites.
SUMMARY/OUTLINE This case study has centered on several thematic areas. The history of Netflix touches upon when it was formed, the idea behind it, the founders, management, the rise and fall of Netflix as well as the company’s resurgence as a profitable company once again. The business strategy of Netflix in this report centers on the strategies that Netflix has adopted to be
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