96%(69)66 out of 69 people found this document helpful
This preview shows page 9 - 12 out of 16 pages.
competition between the firms for licensing and exclusivity contracts. With the loss and gain of these contracts, each of the competitors experience varying degrees of fluctuation with regards totheir respective levels of competitive advantage.CPM AnalysisThe competitive profile matrix (CPM) for Netflix indicates that the firm continues to possess a competitive advantage over competitors such as Amazon and services such as Redbox. It is clear that Netflix has a loyal base of customers, strong levels of product quality, sound advertising strategies, competent management, price competitiveness, large market share, and is attempting to expand globally. However, in the area of global expansion, Amazon begins with the advantage of already being an established firm with an international presence. Furthermore,
Netflix’s struggles with entering the European market further emphasize the fact that Amazon and its Amazon Prime service maintains an advantage in this critical area. Coinstar’s Redbox kiosks are a relatively new development in the industry and appear to have lower market share than that of Netflix or Amazon. In fact, Redbox was required to raise its prices as it began to lose market share in 2014 (Henne, 2014).Analysis of Competitors’ RatiosIt is rather difficult for one to analyze the financial ratios of Netflix’s direct competitors. This is due to the fact that its closest competitor is the Amazon Primeinstant video streaming service which is merely one segment of the Amazon.com structure. The data offered in Appendix F for Amazon.com represents the entire company. The same is true for Redbox, whichis a segment of Outerwall. Despite these realities, the information presented is intended to provide a comparison of important ratios for the two firms.Appendix A: Internal Factor Evaluation (IFE) MatrixInternal Factor Evaluation Matrix (IFE)StrengthsWeightRatingWeightedScore1.Convenience0.0440.162.Swift domestic growth0.0840.323.High-quality selection of independent films0.0430.124.Strong value0.0640.245.Original content quality0.0840.326.Emphasis placed on film ratings by customers0.0830.247.Customer retention strategy0.0440.168.Ease-of-use0.0440.169.Utilization of emerging technologies0.0230.0610.Strategic partnerships0.0230.06WeaknessesWeightRatingWeightedScore1.Slow international growth0.0810.082.Impediments to international market participation0.0810.083.Loss of exclusivity contract with Epix to Amazon.com0.0420.084.Decline in DVD-by-mail subscriptions0.0610.065.Expired contracts with Sony and Starz0.0420.086.Difficulty with raising subscription prices0.0420.08
7.Significant cost of acquiring content0.0610.068.Slowing domestic subscriber growth0.0610.069.Internet connectivity issues0.0220.0410.Questionable response to new net neutrality rules0.0220.04TOTALS1.002.50Appendix B: External Factor Evaluation (EFE) MatrixExternal Factor Evaluation Matrix (EFE)OpportunitiesWeightRatingWeightedScore1.Decline in cable television subscriptions0.1040.402.