Stock Pitch of Netflix
|
2012 | Netflix Stockpitch |
2012 | Netflix Stockpitch |
Strategy Analysis
1. Rivalry among existing firms
The market for entertainment video is intensely competitive and subject to rapid change. New competitors may be able to launch new businesses at relatively low cost. Many consumers maintain simultaneous relationships with multiple entertainment video providers and can easily shift spending from one provider to another. Netflix’s principal competitors include: HBO GO, Apple’s iTunes, Amazon’s Prime Video, Hulu.com, Redbox and Blockbuster.
2. Bargaining Power of Buyers
When considering customers as a whole and viewing from the company’s perspective, we could conclude that the buyers’ bargaining power is relatively high because Netflix revenue is majority customer sales based, customers are not as loyal as before due to better and cheaper ways to watch movies and TV as technology is advancing, and customers have low switching costs.
3. Bargaining Power of Suppliers
Bargaining power of suppliers is relatively high but not significantly high. The number of suppliers who provide high quality contents is limited, making the firms such as Netflix operate at the mercy of their licensing deals. Under this situation, bargaining power of suppliers would be inevitably strengthened. Meanwhile, bargaining power of suppliers would not become too high since suppliers in the video rental market could exert limited power to control prices, but not significantly high to influence the evolution of the market as a whole because they must sell their product to survive.
4. Threats from New Entrants
The threats from new entrants are not high in video rental market. Entrance in the market requires significant level of capitals, including content costs. The existing companies’ economy scale and distribution systems have set a high barrier for new entrants to the video rental market. The existing companies’ economy scale and distribution systems have set a high
2012 | Netflix Stockpitch |
2012 | Netflix Stockpitch |
Strategy Analysis
1. Rivalry among existing firms
The market for entertainment video is intensely competitive and subject to rapid change. New competitors may be able to launch new businesses at relatively low cost. Many consumers maintain simultaneous relationships with multiple entertainment video providers and can easily shift spending from one provider to another. Netflix’s principal competitors include: HBO GO, Apple’s iTunes, Amazon’s Prime Video, Hulu.com, Redbox and Blockbuster.
2. Bargaining Power of Buyers
When considering customers as a whole and viewing from the company’s perspective, we could conclude that the buyers’ bargaining power is relatively high because Netflix revenue is majority customer sales based, customers are not as loyal as before due to better and cheaper ways to watch movies and TV as technology is advancing, and customers have low switching costs.
3. Bargaining Power of Suppliers
Bargaining power of suppliers is relatively high but not significantly high. The number of suppliers who provide high quality contents is limited, making the firms such as Netflix operate at the mercy of their licensing deals. Under this situation, bargaining power of suppliers would be inevitably strengthened. Meanwhile, bargaining power of suppliers would not become too high since suppliers in the video rental market could exert limited power to control prices, but not significantly high to influence the evolution of the market as a whole because they must sell their product to survive.
4. Threats from New Entrants
The threats from new entrants are not high in video rental market. Entrance in the market requires significant level of capitals, including content costs. The existing companies’ economy scale and distribution systems have set a high barrier for new entrants to the video rental market. The existing companies’ economy scale and distribution systems have set a high