Assignment:
Review the book: Netflix in 2011 by Willy Shih and stephen Kaufman
Identification / Development of Alternatives - at least 3. Your alternatives should be derived from your opportunities outlined in your SWOT. In many of the cases, various scenarios may even be given to you. Strategic alternatives should identify basic directions the firm might choose to go with.
• What actions are available to the decision maker to solve the problem?
• What are the costs and benefits of each solution both in real and perceived terms?
• Is there a disparity between what the decision makers want to do, should do, can do, and must do? If so, what is causing the disparity and can it be overcome?
Evaluation of Alternatives & Recommendations - Evaluate each alternative in terms of the pros and cons of the alternative and pick what the team feels is the best choice based on the company's strengths and opportunities. This is meant to be a THOROUGH evaluation of section IV. Utilize the materials and facts given in the case as support for each off your alternatives for solving the problem identified. Discuss in terms of the possible costs and benefits of the alternatives to the decision maker.
Recommended Solution & Implementation ow would you implement your recommendation. Implementation includes actions to be taken, as well as responsible parties, sequencing of marketing activities, and a time frame for their completion. A time line can be a very useful tool in directing the implementation discussion.
Situational Analysis
2. SWOT Analysis
The SWOT analysis of Netflix, Inc. involves identifying both external and internal factors that prevail within the business. Factors that depict the company's weaknesses and strengths represent its internal environment. On the other hand, the external environment is defined by Netflix's existing or possible opportunities and threats. Both the external and internal analyses of the firm as highlighted below.
Strengths
a)Netflix's Brand
As a company that entered the market when there were hardly any competitors, Netflix has come out to be the biggest service provider in streaming of TV episodes and movies by use of internet and this has made other companies like Apple, Inc. to use it in streaming movies to its iPad, Apple TV, and iPhone.
b)Productive strategies.
Aggressive efforts by the CEO and chairman of Netflix, Reed Hastings in 2010 in acquiring rights to air original series program and the partnership with appropriate companies like Epix, a TV channel supplier, blew up Netflix's subscribers' base, earnings and stock price which raised stock price from $55 at the start of 2010 to $175 in the last part of 2010.
c)Maintained competitive advantage
Netflix's patented technology improved the searching process by its customers through its website that enhanced improved customer service.
d)Superior service
The custom-made ordering based on preferences to movie genres offered convenient and fast access to movie headings for multiple watching alternatives including distribution to more than 200 Netflix organized devices.
e)Market segmentations
Netflix has numerous outlets in the US and other countries across the world that enhance faster delivery of DVDs to households of customers who have made orders.
Weaknesses
a.Netflix experience financial constraints in its expansion
Netflix's uncertain economic status placed straining on its management, financial resources, and operations while on its process of expanding its market in the US and the outside world because it has at no time rewarded a cash share and had no strategies to maintain future earnings to fund its growth and expansion.
b.Netflix offers low-quality videos
Netflix's videos produced seem not to be matching what most people across the globe want, such as video quality in HD form because this is the trending quality of video due to advanced technology. Internal costs. Since Netflix Company began as a firm that distributed content to its customers, it had to purchase large licensing suites to dispense TV shows and movies to its customers, and this led to high costs of service that could discourage and reduce the number of clients.
Opportunities
a.Ability to extend its business model
Netflix Company's dedication to developing entertainment business model is an opportunity to expand its business and help maintain its competitive advantage in the market.
b.Increased video number options
This is a way to increase customer preferences due to different alternatives to enable Netflix to compete effectively with its challengers such Comcast, Amazon, Walmart, among additional rivals in the industry.
c.Ability to improve the video quality
With its dominating brand in the industry, Netflix is in a good position to adopt HD that is currently the preferred video streaming quality for most customers worldwide through the appropriate partnership with other companies.
d.CEO's reputation.
Naming CEO and chairman of Netflix as the best manager of the year in 2010 shows that the company can use its organized leaders or rather management to sustain the business through expansion and development.
Threats
a.Competition
Netflix's stiff competitors in the cable, television and web industry including Walmart, Amazon, among other firms have adopted new and compelling services such as pay-per-view movie rentals no use of computer or access to the internet and the services are provided at lower costs than those offered by Netflix.
b.Nonstrategic supply chain
Since Netflix relies on channel providers to distribute TV episodes and movies to its clients, it has a likelihood of suffering from renegotiation or nonrenewal of contracts made between it and the channel providers, and this can inhibit Netflix from operating its business.
c.Legal concerns
Since online business is rising, more rule is likely to be imposed to control such businesses, and thus, Netflix may suffer from the same since it may force it to alter its business model upon which many operations depend.
3. Problem Statement
Netflix lost many customers and market shares due to Hastings made the wrong decisions in 2011.
4. Identify/Develop Alternatives
5. Evaluation of Alternatives
6. Recommended Solution/Implementation