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The CPM analysis has been rating based on some success critical factors according to Yahoo finance competitors comparison of Netflix.It is obvious Redbox has the highest total of critical success factors.Redbox manage to place kiosks all over popular retail market while also promoting their instant live movie rental.Redbox popularity took over Netflix and Amazon because they have affordable prices for their games and movies.Second place will be Netflix with also competitive service prices while streaming old to new movies.The only thing Netflix is missing to stay in competition its games rental.Somehow, Netflix managed to have a net income of 266.80 million while Amazon has -240 million net incomes (Yahoo Finance, 2015).c. Competitor’s ratios and analysis30
Running Head: CASE STUDY: NETFLIX According to Yahoo Finance (2015), Amazon ratios as of December 31, 2014 were in thisway:Debt to equity ratio:149.79Current ratio:1.12Quick ratio:0.82Return on equity ratio:2.35Net profit margin:-0.27Amazon has a high debt to equity ratio, it shows that this firm has more money finance through bank than shareholders financing.Their current ratio and quick shows that they are not doing that well, they are losing some of their capital and their quick ratio is lower than 1.The return onequity ratio is lower than 10%, this show that Amazon has a declining ROE.Customers have stopped buying their products and services.As of right now, Amazon charges more to rent a movie live stream compare to Netflix and Redbox.Lastly, the net profit margin is in the negative.There is no profit and the operation needs new structure to bring the firm back to be profitable.Overall, it seems like Amazon is not doing well, their ratios are lower than normal, and if they do not recover they will be in serious trouble.Current and historical Financial Statements (Income Statement (I/S), Balance Sheet (B/S) and Statement of Cash Flows) from the three most current years for the firmYahoo Finance (2015) presented the financial statements for 2012, 2013 and 2014 as follow:31
Running Head: CASE STUDY: NETFLIX Alternative StrategiesThree classes of alternative strategies from which Netflix chan choose: 1) Stability Strategy, 2) Expansion Strategy and 3) Retrenchment Strategy. Stability Strategymeans a stoppage in expansion or no significant changes in strategy.The ideal use of Stability Strategy iswhen a company competes in the same market for several years selling the same product or service. This strategy focuses on slight improvements or functional performance to stay ahead in the marketplace. Stability strategy is a process where the organization tracks development and ensures market value and profit shares. The benefits of this strategy are to safeguard existing market interest and strength and returns on investment and resources. Advantages of Stability Strategy are to use top management as the decision makers and provide clear directions to employees. It also allows a large organization to use economics of scale. However, as a