b Strategic Alternatives Netflix has plenty of competitive pressure as several

B strategic alternatives netflix has plenty of

This preview shows page 12 - 15 out of 15 pages.

b) Strategic Alternatives Netflix has plenty of competitive pressure, as several new players have entered the arena of subscription-based streaming video services. With very little competition in the past, Netflix might afford to be each a considerable license fee user for content, and at constant time differentiate itself with original content (Grandos,2015). This twin strategy worked whereas Netflix swam during a blue ocean, with no competitors offering a similar low-price, subscription- based streaming service. However, the tides have turned, and Netflix is now swimming in a red ocean. The market suddenly became competitive once HBO launched HBO Go currently, breaking the ice for incumbent content owners and distributors to enter the battle for video 12 | P a g e
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3/6/19 Netflix Case Analysis Lorene Walker streaming. Other new services providers, like Dish’s Sling TV and Hulu’s recently introduced ad- free streaming service. The business, it seems, has woken up to realize that streaming is the future of video content distribution. According to Grandos (2015) Netflix has its 69 million subscriber bases, has a sustainable advantage. But the market freaked out weekday once the corporate declared 880,000 additions to its U.S. with its subscriber base, which was 26% below forecast. The stock sank temporarily 14% in after-hours trading. (It recovered once Netflix executives soothed investors, but in early trading Thursday it was down again.) This drastic response to a missed subscriber target shows that investors recognize the market continues to be fluid, despite Netflix’s worldwide subscriber advantage. c) Recommendations My recommendation for Netflix would be to begin to repair the PR damage from the rebranding and price increase and focus on regaining customer trust. Netflix underestimated that by the addition of Qwikster, its new website and rules, the competitive advantage they sought to offer “affordability, instant access, and usability” would be affected (Wheelen, Hunger, Hoffman & Bamford). Marketing would help Netflix reestablish its brand and begin to repair customer trust. Customer trust and loyalty are detrimental to Netflix’s success as an industry leader. My other recommendation would be for Netflix to focus on growing its consumer base both at home and abroad. Expanding abroad also means that Netflix would need to also invest in technological infrastructures to support the international market. However, by expanding overseas, Netflix stands to regain some of the customers they lost. Conclusion 13 | P a g e
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3/6/19 Netflix Case Analysis Lorene Walker Netflix has established itself as an industry leader for online movie streaming and has set a standard for the home video streaming market. They offer customers hours of entertainment; that content consistently updated and easy to access. Netflix was determined to fulfill their goal of becoming the best entertainment distribution service in the industry and attain their goal of providing the best subscription-paid, least expensive, commercial-free streaming of movies and TV shows (Wheelen, Hunger, Hoffman & Bamford, 2015).
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