Netflix Financial Analysis
Netflix: Planning
Netflix Current Strategy
Netflix Inc. is the largest video subscription service in the United States. Currently having over 25 million global subscribers (Netflix.com, Q2 11 Letter to shareholders), the company’s clientele is up by 70% from 15 million just last year. By examining Netflix’s management, three important questions can be raised in the effectiveness of company’s business strategy. First, what is their mission and vision and how do they affect the company’s planning (strategic and tactical)? Second, what are the company’s objectives and how is the current strategy accomplishing their objective? Third, what is the company’s strategic advantage and how productive is it?
Netflix Strategy
Netflix overall strategy is to provide their customers with a convenient alternative to renting and watching movies. Reed Hastings, CEO of Netflix states the company’s mission statement as, “our appeal and success are built on the most expansive selection of DVDs; an easy way to choose movies; and fast, free delivery “(Brill, 2003), this statement is truly the foundation for what this company has become today. With an ever-growing gradient of subscribers, Netflix has definitely made an impressive mark by not only selling online movie rentals, but also by strategically providing streaming content (watching movies or shows online) on their website. Additionally, Hastings asserts, “our vision is to change the way people access and view the movies they love” (Thompson, A.A., Strickland, A.J. & Gamble, J.E., 2005, pg.C-41), this statement especially applies to the relatively new plan that the company offer to their customers who choose to view movies by online streaming. Essentially, Netflix customer base who view movies by online streaming alone shows consistent growth “with nearly 75% of our new subscribers signing up for it” (Netflix, Q2 11 Letter to shareholders). However, Netflix has not only increased their customer base, but it has also
Netflix Current Strategy
Netflix Inc. is the largest video subscription service in the United States. Currently having over 25 million global subscribers (Netflix.com, Q2 11 Letter to shareholders), the company’s clientele is up by 70% from 15 million just last year. By examining Netflix’s management, three important questions can be raised in the effectiveness of company’s business strategy. First, what is their mission and vision and how do they affect the company’s planning (strategic and tactical)? Second, what are the company’s objectives and how is the current strategy accomplishing their objective? Third, what is the company’s strategic advantage and how productive is it?
Netflix Strategy
Netflix overall strategy is to provide their customers with a convenient alternative to renting and watching movies. Reed Hastings, CEO of Netflix states the company’s mission statement as, “our appeal and success are built on the most expansive selection of DVDs; an easy way to choose movies; and fast, free delivery “(Brill, 2003), this statement is truly the foundation for what this company has become today. With an ever-growing gradient of subscribers, Netflix has definitely made an impressive mark by not only selling online movie rentals, but also by strategically providing streaming content (watching movies or shows online) on their website. Additionally, Hastings asserts, “our vision is to change the way people access and view the movies they love” (Thompson, A.A., Strickland, A.J. & Gamble, J.E., 2005, pg.C-41), this statement especially applies to the relatively new plan that the company offer to their customers who choose to view movies by online streaming. Essentially, Netflix customer base who view movies by online streaming alone shows consistent growth “with nearly 75% of our new subscribers signing up for it” (Netflix, Q2 11 Letter to shareholders). However, Netflix has not only increased their customer base, but it has also
Cited: Brill, R. (2003). The Brill report: Netflix. Web. 6 Nov. 2010. Lasar, Matthew. "Study Shows Why over 30 Percent of USA Never Uses 'Net." Ars Technica. Condé Nast Digital, 17 Feb. 2010. Web. 25 Sept. 2011. Liedtke, Michael. "Redbox 's Golden Opportunity: Higher Netflix Prices."Finance.yahoo.com. The Associated Press, 31 Aug. 2011. Web. 25 Sept. 2011. "Netflix: Quarterly Earnings." Q2 Letter to Shareholders. Netflix Inc., 25 July 2011. Web. 25 Sept. 2011. Sachoff, Mike. "Amazon And Netflix Tops In Customer Satisfaction | WebProNews."Google, Facebook & More Search – Social News | WebProNews. IEntry Network, 15 Feb. 2011. Web. 25 Sept. 2011. Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2005). Crafting and Executing Strategy: The Quest for Competitive Advantage w/OLC/Premium Content Card (14th ed.). New York: McGraw Hill/Irwin.