Netflix Strategy
NETFLIX: A COMPANY ANALYSIS
Table of Contents
I. Wall Street Journal Article and Executive Summary ..4 I A. Wall Street Journal Article 4 I B. Executive Summary ..5 II. External Analysis ..7 II A. Industry Definition ..7 II B. Six Industry Force Analysis ..8 II C. Macro Environmental Forces Analysis, Economic Trends, and Ethical Concerns ..15 II D. Competitor Analysis ..17 II D. 1 Netflix’s Competitors ..17 II D. 2 Netflix’s Primary Competitors ..17 II D. 3 Primary Competitors’ Business Level and Corporate Level Strategy ..18 II D. 4 How Competitors Achieve Their Strategic Position ..18 II D. 5 Willingness to Pay ..21 II D. 6 Comparative Financial Analysis ..22 II D. 7 Implications of Competitor Analysis ..23 II E. Intra-Industry Analysis ..24 III. Internal Analysis ..24 III A. Business Definition/Mission ..24 III B. Management Style ..24 III C. Organizational Structure, Controls and Values ..25 III C. 1 Organizational Structure ..25 III C. 2 Organizational Controls ..25 III C. 3 Organizational Values ..25 III D. Strategic Position Definition ..26 III D. 1 Corporate Level ..26 III D. 2 Business Level ..27 III D. 3 Resource & Capability Level ..28 Value Minus Cost Profile ..28 Value Chain ..28 VRIO Analysis ..28 Consumer Retention Analysis ..29 4Ps Analysis ..29 Product Life Cycle ..30 III E. Financial Analysis ..31 III E. 1 Netflix Financial Performance Analysis ..31 III E. 2 Valuation of Netflix ..32 III E. 3 Scenario Analysis ..33 IV. Analysis of the Effectiveness of the Strategy ..34 V. Recommendations ..35 V A. Short-Term and Long-Term Recommendations ..35 V A. 1 Short-Term Recommendations ..35 V A. 2 Long-Term Recommendations ..36 V B. Strategy Implementation ..38 V B. 1 Short-Term Strategy Implementation: Video Game Industry ..38 V B. 2 Long-Term Strategy Implementation: Streaming ..38 V C. Corporate Social Responsibility and Ethical Decision-Making Practices ..39 VI. Conclusions ..39 VII. Bibliography ..40
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VIII. Main Appendix ..43 Exhibit
Table of Contents
I. Wall Street Journal Article and Executive Summary ..4 I A. Wall Street Journal Article 4 I B. Executive Summary ..5 II. External Analysis ..7 II A. Industry Definition ..7 II B. Six Industry Force Analysis ..8 II C. Macro Environmental Forces Analysis, Economic Trends, and Ethical Concerns ..15 II D. Competitor Analysis ..17 II D. 1 Netflix’s Competitors ..17 II D. 2 Netflix’s Primary Competitors ..17 II D. 3 Primary Competitors’ Business Level and Corporate Level Strategy ..18 II D. 4 How Competitors Achieve Their Strategic Position ..18 II D. 5 Willingness to Pay ..21 II D. 6 Comparative Financial Analysis ..22 II D. 7 Implications of Competitor Analysis ..23 II E. Intra-Industry Analysis ..24 III. Internal Analysis ..24 III A. Business Definition/Mission ..24 III B. Management Style ..24 III C. Organizational Structure, Controls and Values ..25 III C. 1 Organizational Structure ..25 III C. 2 Organizational Controls ..25 III C. 3 Organizational Values ..25 III D. Strategic Position Definition ..26 III D. 1 Corporate Level ..26 III D. 2 Business Level ..27 III D. 3 Resource & Capability Level ..28 Value Minus Cost Profile ..28 Value Chain ..28 VRIO Analysis ..28 Consumer Retention Analysis ..29 4Ps Analysis ..29 Product Life Cycle ..30 III E. Financial Analysis ..31 III E. 1 Netflix Financial Performance Analysis ..31 III E. 2 Valuation of Netflix ..32 III E. 3 Scenario Analysis ..33 IV. Analysis of the Effectiveness of the Strategy ..34 V. Recommendations ..35 V A. Short-Term and Long-Term Recommendations ..35 V A. 1 Short-Term Recommendations ..35 V A. 2 Long-Term Recommendations ..36 V B. Strategy Implementation ..38 V B. 1 Short-Term Strategy Implementation: Video Game Industry ..38 V B. 2 Long-Term Strategy Implementation: Streaming ..38 V C. Corporate Social Responsibility and Ethical Decision-Making Practices ..39 VI. Conclusions ..39 VII. Bibliography ..40
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VIII. Main Appendix ..43 Exhibit
Bibliography: Walker, Gordon. Modern Competitive Strategy. 2005 ed. New York: McGraw Hill-Irwin, 2005. Print. Wells, Jane. “Reed Hastings Pushes the Envelope With Netflix”. CNBC.com. 30 Jan. 2009. 17 Feb. 2010. 42 | P a g e Exhibit 5: Hours Available For Leisure Per Week, 1973-2008 Year Median number of leisure hours 16 20 19 19 20 20 20 20 19 20 19 20 19 19 17 18 19 24 26