The organizational environment is a set of forces and conditions outside the organizations boundaries that have the potential to affect the way the organization operates. These forces change overtime and thus present managers with opportunities and threats. Changes in the environment, such as introduction of new technology or the opening of global markets, create opportunities for managers to obtain resources or enter new markets and thereby strengthen their organizations. (George and Jones, 2006)
Similarly, Reed Hastings and Marc Randolph founded Netflix Inc. in 1997 and today they have ventured into an online streaming media company offering their subscribers unlimited access to Movies, Documentaries, and TV Shows. With Online Streaming
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Technological
2.1 – Political Factors
The political environment in countries for Netflix is very critical. Governmental regulation, laws and policies impose threats and can even provide opportunities for economies globally. Netflix operate on a global platform and coming up with new strategies every year shall allow them to align their suit the need of every economy’s changing policies, laws and regulations.
One of the major political issues faced by Netflix Inc. is the restriction by the U.S. Government on countries such as Crimea, North Korea and Syria leaving a potential market untapped for Netflix. Unfortunately, Netflix isn’t even available in a largely populated country of China due to the permission issues from the Chinese Government (CNET, 2017).
Changing tax laws or tax rates are impacting political challenges faced by Netflix Inc. These are likely to change overtime affecting the revenues and the expenses of Netflix Inc. On the 1st of July 2017, the Federal Government in Australia applied Goods and Service Tax (GST) at 10% to all intangible digital products and services supplied into Australia making software downloads and streaming services more expensive. It is named the ‘Netflix Tax’ and it is exempted in B2B markets and is imposed solely on consumers. (CBC News,
CP | By LuAnn LaSalle, The Canadian Press Posted: 09/12/2013 9:05 am EDT | Updated: 09/12/2013 5:03 pm EDT
"Sympatico CBC News Ottawa." Sympatico.ca Local News. 8 Mar. 2011. Web. 8 Mar. 2011. .
In the field of low-cost and globally-ambitious Internet subscription services, there are mainly four big competitors, Netflix, Hulu, Amazon, and HBO. In order to win as much of consumers’ time and spending as possible, each of them have different strategies to compete with each other. HBO is an original content firm getting into the Internet subscription business with HBO Go (Moskowitz, 2015). Netflix, Hulu, and Amazon are internet firms with mostly licensed content, all planning their strategy of producing original content.
A critical SWOT analysis of Netflix’s social media techniques clearly shows they are ahead of the game and not backing down from rising competitors like YouTube which is gaining viewers by increasing the amount of online content.
The idea inspired Reed Hastings and Marc Randolph, and then they founded Netflix in Scotts Valley, California in 1997 (Netflix, 2014). The company comes into play by developing a subscription-based streaming platform for movies and television shows. Unlike the traditional movie rental businesses such as Blockbuster and Redbox, Netflix’s innovation offers service via Internet, and it does not have any physical stores but instead delivers DVDs through postal mail in the U.S. Since then, Netflix has become the world’s leading internet television network with constant growth of customers to over 48 millions members in more than 40 countries in the North America, Europe, and the Latin America (Netflix, 2014). In this analysis, the main focus is examining the current market environment for Netflix. It identifies the type of market structure that Netflix is currently competing. The analysis also expands on the competitions, product differentiation, pricing strategy, and measuring the level of easy entry-and-exit.
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in strategic focus has allowed Netflix to grow into the largest online entertainment subscriptions service in the United States with over 6.3 million subscribers (Netflix).
From its inception, Netflix has become a business based on superior customer service and has subscribed its business to the market marketing management philosophy. The main purpose behind Hasting’s idea of a better way to rent and enjoy movies was how to provide that service to their clients and not have any late fees. In other words, their customers could enjoy their rentals from Netflix for as long as they wanted, and they would never have to worry about late fees again, so long big movie rental chains! This aspect alone of Netflix’s marketing plan indicates that Netflix has based their marketing plan on market orientation, “a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer’s decision to purchase a product,” (Lamb, 2009, p.7). Many companies that take on this philosophy are said to implementing the market concept. The marketing concept states: “The idea that social and economic justification for an organization’s existence is the satisfaction of customer wants and needs while meeting orga...
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
As the firm moves forward, top managers must pay attention to staying unique to sustain a competitive advantage. Netflix does not own their content, nor do they have any tangible assets. Netflix is a part of a broad range of network users. As technology continues to grow exponentially, Netflix will have to be readily adaptive to change and innovation. Technology never stops growing and evolving, therefore, Netflix’s business platform should never stop growing and evolving. At the same time, they must be careful to remain user friendly and customer centric by keeping the technology at a level where users will not have to obtain a certain set of technological skill sets.
In this paper, I would like to analyze Netflix’s distinctive strategies based on their competitive advantage and how it covers from its strategy mistakes in the high threat industry as well as give some viable suggestion for the future development of the company.
The list provided in this article demonstrates a number of VPNs that have managed to continue providing access to Netflix in a variety of countries. These Netflix VPNs service providers are top of the line and have managed to stay one step ahead of Netflix thus
Reed Hastings (co-founded) founded Netflix in 1997. During this time, Netflix offered DVD rentals by mail. As Netflix went public in 2002, shortly a year later their subscription reached the one million mark (Netflix Management, 2011). Recently, Netflix is recognized as one of the 50 most innovative companies, ranking number eight for “streaming itself into a $9 billion powerhouse (and crushing Blockbuster)” with 20 million subscribers (fastcompany.com, 2011). This success shows how Netflix embraced a business approach where their mission was to take the troublesome experience of everyday consumers and transform them into a business opportunity. Below illustrates how Netflix rank in other categories.
There is strong competition with other companies that offer video streaming at no extra charge. Additionally, Netflix and its competitors are attempting to enter the digital world. Digitally offering television shows is an area of competition that has previously been controlled by
Netflix in a Nutshell Netflix is considered as a pioneer in cultural innovation. Ranking 11th on LinkedIn’s Top Attractors list in the U.S., it is one of the most coveted employers (Fairchild, 2016). Netflix demands self-sufficient employees and rewards them with unrestricted vacation, a liberal expense policy, and the power to choose what percentage of their salary be given in company stock or cash. This “freedom and responsibility” culture in the 2800-employee strong company, is famous for attracting only “fully formed adults” (Giang, 2016). When Employers Promote Adulting
Netflix the Organization Netflix is known for having a unique company culture. In 2009, Netflix CEO Reed Hastings published a PowerPoint slide deck summarizing the culture. This has begun a new type of culture in today’s business world. Netflix focuses on hiring people that will flourish in their highly competitive, high performing atmosphere. Values at Netflix