Netflix Case Notes - INTRODUCTION: NETFLIX, INC. Netflix,...

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Netflix CASE ASSIGNMENT Reed Hastings has asked your consulting firm to participate in a meeting of his key strategic leaders to discuss the salient strategic challenges facing Netflix domestically. The meeting agenda includes the following items: I. Competitive Rivalry and Dynamics A. Key Competition B. Likelihood of Competitive Response II. Strategic Management and Competitive Issues A. Statement of Key Strategic Issues B. Strategic Goals C. Stakeholders D. Measuring Success III. Discussion and Recommendations for Action To familiarize yourself with Netflix's situation and prepare for the discussion, you need to review the background information that Netflix has provided and put it into a strategic management framework. This assessment should include a look at the company's External Environment (Opportunities, Threats, and Industry Analysis) Internal Organization (Strengths, Weaknesses, Value Chain, and Sustainability) Strategic Management Team Business Strategy Strategic Relationships and Alliance Although you are not an industry specialist, you will need to be prepared to recommend an integrated and coordinated set of commitments and actions which will exploit the company's core competencies, strengthen its competitive advantage, and maximize value. 41
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Netflix STRATEGIC MANAGEMENT INPUTS External Environmental Analysis Trends Due to short product life cycles in the technological sector, continual improvements in products, and lower costs in technology, it has become more common for consumers around the globe to own their own movie viewing devices and access the Internet from home. Thus, continued growth in the online movie rental market base is expected. However, storefront video rental sales are dropping in response to mail-order rental operations and video on demand services. Convenience, immediacy, and value are the order of the day. Opportunities Video on demand (VOD) is gaining more attention and popularity. Early adopters are experimenting with downloadable movie services for real-time viewing. Most of the key online rental industry players are seeking relationships with Video on Demand providers to maintain a competitive advantage. Threats P rogress in technology is changing competitive dynamics, inviting new entrants to compete against Netflix. Emerging competitors include: Developers of technology devices specifically designed to support new technologies, such as Apple and Smartphones, offering movies and television shows on their portable viewing devices. Large online and storefront retailers, like Amazon and Wal-Mart, offering downloadable DVD-quality movies for rent or purchase. VOD service providers, especially among cable/satellite companies, television networks, and dot-com companies. Content providers (movie studios) looking for new distribution opportunities and
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Netflix Case Notes - INTRODUCTION: NETFLIX, INC. Netflix,...

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