Streaming Media and Netflix

Topics: Strategic management, Streaming media, Renting Pages: 30 (10297 words) Published: March 23, 2012
| 2012|
| Netflix Inc.
Case Study

[Neflix case]|
This study will assess strengths and weaknesses of Netflix Inc., and illustrate their position in the current marketplace for their given industry. Issues will be addressed, and recommendations will be made for the company to continue to succeed and grow in this industry.|

Table of Contents

Table of Contents
Strategic Type
Generic Strategy
Value Chain
Financial Analysis
Goals- Strategic/Financial
Hierarchy of Strategy
Porters Forces
Strategic Grouping
Social Media

Netflix was created in 1997, by three friends, Marc Randolph, Reed Hastings, and Mitch Lowe in Los Gatos, California. The inspiration for the company came after an incident with Blockbuster who had charged Reed Hastings $40 in late fees from his movie rental. They first launched a pay-per-rental format business through a website in April of 1998, charging $4 plus $2 shipping for renting DVDs. This was a risky business venture because DVDs were a fairly new technology and DVD players were not currently in many homes in the USA. Netflix then developed a monthly subscription service in September 1999, which allowed customers to rent unlimited movies on DVD without due dates, late fees, shipping and handling, or any sort of per movie fees. After the success of the monthly subscriptions, they decided to stop the per-movie rentals prices that they had originally had, and dealt completely with monthly subscriptions starting in early 2000.

Netflix went public on May 29, 2002 selling five million shares of common stock. Netflix reported their first profit in 2003 of $6.5 million. Netflix incorporated an internet streaming of selected movies and TV shows that can be watched through streaming them off of the Netflix website in October 1, 2008 by creating a partnership with Starz Entertainment. This partnership allowed Netflix to provide 2,500 more movies and TV shows to their library. This streaming can be done through many technological devices including, cell-phones, computers, X-Boxes, Playstations, and Wiis.

Unfortunately, we could not find a published, official mission statement for Netflix, so we created one that we think would work for them. A mission statement defines what a company is, or why they exist. A mission statement conveys where a company is now, not where they would like to go in the future. * Netflix is the world’s leading online provider of DVD rentals, and providing the ability to instantly stream movies and television shows to electronic devices in customers’ homes within the United States, Canada, Latin America, the Caribbean, United Kingdom, and Ireland (1, 2, 3, 4). We are customer focused and strive to provide them with the largest selection of movies to select from, and to provide the most convenient services to customers though many options of watching these movies including, mail-order deliveries and instant steaming of the movies and television shows to your electronic devices at home (2, 4, 5, 7). Netflix was developed and continues to operate with seven key company values, productivity, creativity, honestly, communication, selflessness, reliability and passion (6). We are becoming a global organization that is socially and environmentally responsible, creative and financially rewarding for our employees and shareholders (5, 8, 9).  

Unfortunately we could not find a current vision statement for Netflix, so we developed one. A vision statement basically states a goal, or where you would like to see your company in 10 years’ time. For Netflix we believed this would make a good vision statement: * “Netflix’s vision is to be the number one provider of DVD rentals and the...
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