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Netflix

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Emily Thomas

on 28 April 2015

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Transcript of Netflix

Revised Mission & Vision Statement
Vision
Netflix’s vision is to be a worldwide leader in on-demand video entertainment available for multiple devices.
At Netflix we are dedicated to expanding content and making it available for family viewing worldwide.

We at Netflix are committed to the recruitment and training. Retention of high performing, self motivated, and dedicated employees who are committed to the expansion and function of the website.
Netflix provides as ethical way for people to have access to the latest DVD’s and online streaming content of their favorite shows on their own schedules, across a wide range of mediums in a family friendly way.
Mission
By: Emily Thomas, Richard Marchetti, Michael Plaskota, Daniel Rodrigues, Dan Baker, Ken Waszynski, Shawn Fortin

Questions
Opportunities
1.) Customer referrals
2.) Shared Family account
3.) International Expansion (Canada, Europe, China, India)
4.) Smart Tvs
5.) Studios paying Netflix to feature their films in advertising
6.) Pursuing streaming rights for up to date content. (current season)
7.) US: ~80% of households internet access in 2013 (75% in 2010)
"8.) 2/3 (147.5M) of internet users watch online
videos, expected to increase to 193.1M by 2014"
9.) Reduced online release following DVD release (28 -> 0)
10.) Increased Sales of Home electronics
11.) Increasing popularity of VOD
12.) Production of original Content

Threats
1.) US copyright laws (DMCA)
2.) Cable providers low cost pay-per-view
3.) Competitor's content deals
4.) Competitors duplicating Netflix's business model
5.) Growth of online commerce may lead to more regulation
6.) Amazon forcasted to grow 30% annually in next 3-5 years
7.) RedBox joining online streaming business
8.) Barriers to new market expansion
"9.) Amazon has strong brand, online history,
large customer base, greater financial marketing. Amazon Revenue - 34B
..... Netflix - 2.4B"
10.) Movie tickets/Music Video sales expected to increase by .7B in 2014
"11.) Patent, Copyright, Asset infgringment by
competitors may decrease Netflix's brand value"
12.) Vulnerable to Hackers, DDOS
13.) Increased patent right costs, based on customer preference
14.) Cost to acquire sufficient inventory

Strengths Weaknesses
1.) Increase in content "1.) Stock price is dependant on
market/economy"
"2.) High customer satisfaction ( 90% of customers
would recommend to a friend)" "2.) Subscription growth increases are
seasonal (Oct-Mar)"
3.) High customer growth - 41% "3.) Market penetration is only 14.5%,
not in top 10 for videos viewed in 2010"
4.) Revenues/Net Income Increasing Annually "4.) Canadian expansion not yet profitable
(1 year)"
5.) Playable with over 200 different devices. "5.) Rely on Amazon for cloud provider,
minimal substitutes."
6.) 1B deal with EPIX for content "6.) Content owners control contract
negotiations "
7.) Physical disks and online content available "7.) Delayed access to current season
content"
"8.) Solid Website / Recommended
For Your selection." 8.) Inventory issues (physical DVDs)
"9.) Individual subscriber acquisition cost has
decreased" 9.) Dependence on physical DVD's
10.) Inhouse Software Engineers 10.) Lost or damaged DVD's
11.) proprietary software for the user interface "11.) Customer base sensitive to price
increases"
12.) Short term investment cost is down
15.) Property/Equipment cost is down
"16.) No due dates, late fees, shipping cost
for customers"
17.) HD/BluRay copies of content available
18.) Exclusivity deals with content owners

SO Strategies WO Strategies
"1.) Expand market share in VOD
(S1,8&9,O3&8) Market Development
" "1.) Create original content. (W6&7, O6&12) Product Development
"
"2.) Create a multi-user interface
(S10-12, O1&2) Product Development " "2.)Move away from physical DVD's
(W8-10 & O4,7,8,10,&11) Divestiture "
"3.) International Expansion will increase
customer growth, expand profitablility (S3&5,O3) Market Developement " "3.) Increase Marketing during
seasonal growth period (W3, O1, 7 &8) Market Penetration"

ST Strategies WT Strategies
"1.) Increase the content discouraging other firms from competing directly
( T11, S1, S8) Backward Intigration

" "1.) Find a new cloud to store content.
(T9&12, W6) Forward Intergration "
"2.) Contract more exclusive content (T3,T10, S8)
Backward Intergration " "2.) Keep price stable (T3&4 W11)
Retrenchment"
"3.) Develop proprietary software
further to create brand differentiation
(S12&13, T2&4) Product Development"

History
Netflix was founded by Reed Hasting and Marc Randolph
Hasting came across Netflix when he was charged a $40 late fee
Originally offered a seven-day DVD rental costing $4 and $2 for shipping
Now offer subscribers streaming videos on demand
Timeline
1997 founded in Scotts Valley, California
1998 officially opened with 925 DVDs
2000 new product called "CineMatch"
2001 customers started renting DVDs that were referred to them
2002 opened new distribution centers in
2003 the company hit the mark for one million subscribers
2005 more than 35,000 titles
2007 offering subscribers streaming videos on demand
2009 expanded internationally into Canada
2010 CEO“Business Person of the Year”and 30 most respected CEO’s
2011 "Family Plan"
2012 Keeping up with new technology
Netflix started as a DVD rental service in 1997
Now one of the World’s largest Internet subscription services
Streaming on many “Netflix ready devices”
Over 20 million members in Canada and United States
Pursuing Epix and streaming rights of certain TV shows
Background
Mission Statement
Components of the Mission Statement:
1. Customers
2. Products or Services
3. Markets
4. Technology
5. Concern for Survival, Growth, and Profitability
6. Philosophy
7. Self-Concept
8. Concern for Public Image
9. Concern for Employees

Vision Statement
Netflix’s vision is to be a worldwide leader in on-demand video entertainment available for multiple devices.
The External Factor Evaluation (EFE) Matrix
Financial Ratio Analysis
The Internal Factor Evaluation (IFE) Matrix
The SWOT Matrix
TOWS
The Strategic Position and Action Evaluation (SPACE) Matrix
The Boston Consulting Group (BCG)
The Internal External (I/E) Matrix
Section I: Grow and Build
Alternative Strategies:
Backward, forward, and horizontal integration
Market penetration
Market development

The Grand Strategy Matrix
Quadrant I
Strong Competitive Position
Alternative Strategies:
Backward, forward, horizontal integration
Market development and Market penetration
Product development and Related diversification

The Quantitative Strategic Planning Matrix (QSPM)
Conclusions/Recommendations
To work with the networks with which we already have content deals: Showtime, Starz, ABC, ect. to gain access to their up-to date content.
Short Term Strategy
Long Term Strategy
To acquire rights to as much content as possible
Implementing the multi-user account
Minimize attrition rates
Reducing the cost per subscriber further
We recommend that Netflix invest additional resources into the production of original content
To be aired exclusively through Netflix.com
This will reduce the large cost of leasing the rights to a specific show
Provide Netflix with a sustainable competitive advantage as well as a new revenue source
At Netflix we are dedicated to expanding content and making it available for family viewing worldwide (1)(3). Netflix provides as ethical way (6) for people to have access to the latest DVD’s and online streaming content (2) of their favorite shows on their own schedules, across a wide range of mediums in a family friendly way (4)(7).
We at Netflix are committed to the recruitment and training. Retention of high performing self motivated and dedicated employees who are committed to the expansion and function of the website and the company as a whole (5)(8)(9).

The Competitive Profile Matrix (CPM)
Full transcript