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Netflix: Case Analysis

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Havanah Chen

on 30 November 2012

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Transcript of Netflix: Case Analysis

Overview Key Issues Case Analysis I. Online video streaming and DVD-by-mail II. Founded in 1997 by Reed Hastings and Marc Randolph in Los Gatos, California III. Offers a flat-rate subscription fee II. Separate services iPad
iPod Touch Nintendo Wii
Sony PS3 III. Separate subscription fees IV. Up to 60% subscription fee increase V. Loss: The Crisis Industry Analysis Amazon.com iTunes Kiosks: Best Buy Redbox Unlimited video streaming I. One of the largest online streaming and rental services II. Low subscription fees III. Competitive market I. Return to the original Netflix Alternatives II. Get rid of
Qwikster Organizational
Analysis Key Stakeholders S.W.O.T. I. Abrupt changes Brand image Customer loyalty Profits 1997: US$20 2007: US$9.99 2011: US$15.98 III. Lower prices Strengths: One of the first to enter the industry Excellent management style Willing to push the boundaries Services offer variety of platforms 20 million subscribers (2010) Convenient Easy-to-operate Affordable Weaknesses: No late fees Device friendly International Unhappy customers Subscription loss Qwikster confusion High video quality Lack of professionalism Opportunities: Video-streaming websites: Letmewatchthis.com Hulu.com Tainted reputation Loss of customer loyalty Loss in profits New Sectors (expanding services) International Offers more than just DVDs Increasing market Less competition (Blockbuster in bankruptcy) Offers a flat-rate fee (competitive) Threats: Competitors Content removal Decrease in DVD market Increased prices, decreased customers II. Customers III. Employees IV. Shareholders VI. Distributors V. Suppliers I. Owner(s) Objectives: Piracy Recommendations Alternative III Action Plan I. An apology to all affected customers II. Keep previous cost for both subscriptions and offer free month for returning customers III. New communication strategy (client focused) The #1 online video streaming and DVD-by-mail distribution service company Competitive prices to create affordability Convenient IV. Offer package deals for a lower rate V. Offer a free trial period for new users Conclusion Keep both Netflix & Qwikster Lower the prices Acknowledge the public Customer service Package deals Long-term Long-term United States
Latin America
Caribbean Cons: No expansion Less profit No new ideas Acknowledgment that the company was wrong More confusion Pros: No more dispute Online streaming and DVD-by-mail services back together Single payment Single website Returning customers Pros: Exclusive name Single website Less confusion Single payment Single service, more attentive Cons: No DVD-by-mail services Less profit DVD surplus Single service (online streaming only) Pros: Lower prices Dual services Dual websites Company efficiency More subscribers Cons: Separate websites Separate payments Financial contraction Customer setbacks Less profit Create communication procedures in order to prevent future loss of brand image & customers Keep both separate entities (Netflix & Qwikster) Lower prices Rapid growth after the introduction of the unlimited rental service - from 300,000 subscribers in 2000 to 900,000 just two years later.
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