Netflix Case Analysis

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Netflix, Inc.

“Netflix, Inc. is the world's largest online movie rental service, with more than 10 million subscribers (Netflix Media Center, 2009).”

Netflix exhibits dominant economic characteristics in the online movie rental business. They enjoy strong market size and growth rate when compared to rivalry competition. The number of rivalries are increasing, and the market remains dominated by only a few sizeable rivalries like Blockbuster Video, Wal-Mart, Walt Disney Movies and Movielink’s Downloadable Movies. Netflix is determined to offer new and innovative technology to sustain their competitive advantage.

“Netflix growth strategy entails making the best product and the best consumer experience even better. Lead the expansion of internet delivery content by offering subscribers both mail delivery and a continuously improving internet delivery option (Netflix Overview, 2009).”

Netflix’s vision is “to change the way people access and view the movies they love. To accomplish that, on a large scale, we have to set a long term goal to acquire 5 million subscribers in the U.S., or 5 percent of the U.S. TV households over the next four to seven years (Thompson C-41).”

This vision is well devised and crafted setting short term and long term performance targets. Current analysis shows less than 4 million subscribers in 2004, and in less than six years their subscriber base has more than doubled to more than 10 million subscribers.

Their intent is to leverage their online DVD rental leadership to grow both subscribers and net income, thereby using a balanced scorecard approach relating to financial performance and those related to strategic performance.

My analysis of Netflix’s strategy and vision is focused and on target. Netflix is achieving its competitive advantage by crafting a well-conceived strategy and the necessary vision to compete, survive and gain a competitive advantage over competing rivals. My case analysis is based upon the...
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