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b) Strategic AlternativesNetflix has plenty of competitive pressure, as several new players have entered the arenaof subscription-based streaming video services. With very little competition in the past, Netflixmight afford to be each a considerable license fee user for content, and at constant timedifferentiate itself with original content (Grandos,2015). This twin strategy worked whereasNetflix 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 redocean.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 video12 | P a g e
3/6/19Netflix Case AnalysisLorene 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 thefuture of video content distribution.According to Grandos (2015) Netflix has its 69 million subscriber bases, has asustainable advantage. But the market freaked out weekday once the corporate declared 880,000additions to its U.S. with its subscriber base, which was 26% below forecast. The stock sanktemporarily 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 subscribertarget shows that investors recognize the market continues to be fluid, despite Netflix’sworldwide subscriber advantage. c) RecommendationsMy recommendation for Netflix would be to begin to repair the PR damage from therebranding and price increase and focus on regaining customer trust. Netflix underestimated thatby the addition of Qwikster, its new website and rules, the competitive advantage they sought tooffer “affordability, instant access, and usability” would be affected (Wheelen, Hunger, Hoffman& Bamford). Marketing would help Netflix reestablish its brand and begin to repair customertrust. Customer trust and loyalty are detrimental to Netflix’s success as an industry leader. Myother recommendation would be for Netflix to focus on growing its consumer base both at homeand abroad. Expanding abroad also means that Netflix would need to also invest intechnological infrastructures to support the international market. However, by expandingoverseas, Netflix stands to regain some of the customers they lost. Conclusion13 | P a g e
3/6/19Netflix Case AnalysisLorene Walker Netflix has established itself as an industry leader for online movie streaming and hasset a standard for the home video streaming market. They offer customers hours ofentertainment; that content consistently updated and easy to access. Netflix was determined tofulfill their goal of becoming the best entertainment distribution service in the industry and attaintheir goal of providing the best subscription-paid, least expensive, commercial-free streaming ofmovies and TV shows (Wheelen, Hunger, Hoffman & Bamford, 2015).