Netflix Case Study

Executive Summary

The technology industry is constantly expanding and it has an effect on everything we do in our lives today. This is clearly visible in the entertainment industry as you have seen dominance throughout our lives and now leading into a very simple online streaming business. Even games no longer need a physical disk or cartridge but can be simply downloaded over a wireless network or even directly to your phone on a phone network. I will be discussing in this analysis in depth look at the changing movie industry and how Netflix can push to succeed in the future. This will cover from competitive forces, future changes in the industry, strengths and weaknesses, and what I believe needs to be done for success. With the emergence of new competitors, such as Hulu Plus and Amazon Instant Video, Netflix should continue to push into new markets and open itself up to new opportunities such as seeking out bundling deals with cable companies an attempt to reduce their churn rate. It is clear that Netflix is still breathing and fighting their way back, but whether or not they will ever be as valued as they were is uncertain. I recommend they continue to push forward with their high marketing expenses as it has worked well for them but to hope for a huge decline in the DVD industry.

Analysis

With the high development rate of high speed entertainment Netflix was able to push their original DVD rental business towards an online streaming, in turn this caused an increase in revenue due to the low price of streaming online versus the price of postage and shipping within the DVD distributing side. Netflix introduced us to this simplicity in the late 2000’s and had established itself as an internet streaming leader. But in recent years Netflix has had a bit of a hiccup because of some poor business strategy changes. They are climbing back up from these poor management decisions to market dominance. It started in mid-2011 when Netflix took an aggressive approach to...