Case Study Analysis Netflix
Case Study Analysis
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The CEO of Netflix, Reed Hastings had a vision to provide home movie service which would be more enjoyable and satisfying to the customers, as opposed to the traditional rental of home movies. As this idea came in the late nineties, it was something innovative and had great potential.
The operational strategy and business model they used had affected the retail video rentals market.
In the beginning DVD’s were offered on a fee per use, then in 1999 they implemented monthly subscription services. Their subscribers account for over 44 million up to today.1
Maintaining and ensuring customer loyalty is the key strategy. Netflix was selected as number one online retailer by the FGI research. They achieve this by their vast collection of retables, fast delivery services and the fact they make it incredibly easy to use.
Strategic and Financial Performance
1. Strategic Analysis
Age of consumers- there exist certain governmental limitations for the age appropriateness.
Videotape protection act- protects video rental consumers and ensures that no confidential personal information is going to be released. This is a strictly confidential policy among video rental businesses.
Recession- due to economic crisis companies needed to find a way to cut costs. Having movie rentals online can help reduce costs greatly.
Costs- movie rentals are done maily online, it reduces the economic cost.
Changes in lifestyle- technology made people lazy. Statistics show that technology demotivates people to leave their houses since they can watch movies, socialize, play games online more then ever.
Online streaming trends- people are in constant search of free goods. Looking for cheaper and easy ways to watch the movies they want.
References: Shih, Willy C., Stephen P. Kaufman, and David Spinola. "Netflix." Harvard Business School Case 607-138, May 2007. (Revised April 2009.) https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?contentGroupId=10476&contentGroup=Company+Facts