Netflix Life Cycle

When Hastings created the Netflix organization there were already many companies competing in the movie rental market. With companies like Blockbuster and Hollywood Entertainment which already had strong brand awareness within the video rental industry, Netflix had to appeal to the consumer differently in order to capture their attention. They targeted the online video streaming industry to allow customers the ability to rent movies from the comfort of their homes and have them directly mailed to them so there was no need to venture out to the brick and mortar businesses. This was a technology not currently offered by the existing companies that consumers were use to and proved to be very successful. But with many businesses, Netflix analyzed

Although the online streaming industry is continuously evolving, growth continues but slows down as the market demand approaches saturation, with less first-time buyers and mostly purchases for upgrades or replacements (Parnell, 2014). The market has been penetrated with current competitors offering the same type of service. Netflix can find ways to pull over customers from rivals with new technology and pricing which will grow their subscriptions but with their current offerings they have almost reached their peak. Netflix is in the middle of the product life cycle and can probably only expect to add another 36.5 million U.S. subscriptions until it reaches market saturation (Kim, 2014). The growth stage can be beneficial to successful companies which have the ability to invest more money into their business. These businesses are able to enhance their technology, build new facilities or expand into other markets that others are unable to due to lack of investing, causing them to fall out of the market completely (Parnell, 2014). Companies like Netflix and their stronger competitors can use this stage to corner the market driving out some of the smaller players. This is the time for these companies to look at what they can do to strengthen their business. Analyzing their external markets, customer buy habits, and competitors, they can move past the growth stage and into the shakeout forcing out the smaller