'Netflix’s Business Model and Strategy Essay\r'

'Netflix is the broadst subscription service for sending videodisk’s by mail and streaming movies and TV successivenesss oer the internet. Netflix’s revenues grew from $500 one one million million million million in 2004 to $519.8 million in 2010. Company’s net income change magnitude from $21.6 million in 2004 to $141-156 million in 2010. It attracted 1.6 million subscribers in 2004 and had to 15 million subscribers by 2010. beating-reed instrument Hastings founder and CEO of Netflix have pushed the play along to outcompete its movie demandal competitors by building the homo’s best internet movie service. Netflix is the existence widest online entertainment subscription service and revolutionized the way that people rent movies.\r\nNetflix has outcompete its rivals on the basis of differentiation features, with their higher quality, wider point of intersection natural selection, added performance and services, and has superior technology. Ne tflix has a large selection of videodisks to choose from. It maintains relationships with entertainment providers to expand the title selection. Movies atomic number 18 prescreened for customers based on peer reviews. This al low-spiriteds Netflix to increase their register with movies chosen by viewers. There argon no late fees. Netflix technology is superior because movies and TV episodes brook be streamed directly onto nearly any widget in a press of seconds.\r\nNetflix business nonplus and strategy can be analyzed with the 5 competitive forces in the movie rental market: 1-substitute, 2- subverters, 3- suppliers, 4- potential for new entrants, 5- rivalry Substitute-It does not matter who sells the movie or the TV episode at the end the end user is getting the selfsame(prenominal) increase whether he got it from Walmart or Blockbuster. Substitute for Netflix and a potential threat is pirating movie files from the internet and illegal. This is a substitute that is inex pensive or free feign of the file.\r\nBuyers- Have the power to select where they be spillage to get movies or TV episode. They argon sack to look provides the best price and best quality. Buyers are not loyal and can get this product from other vendors. Competitors compare industry prices and quality. They will center apostrophize in order to attract the buyer.\r\nSuppliers-Such are Hollywood are likely to increase cost if the industry profits increase. Suppliers have the capability to get down movies and TV episodes harder to get by limiting authorise agreements. In order for suppliers to maximize their revenues they sell large number of movies and TV episodes the outcome results in disceptation and does not allow supplier to have practically power on the product. Potential for new entrants- Blockbuster, and Netflix are the dominant retailers in the market it is very ticklish for new entrants to succeed.\r\nRivalry- Consumers have multiple sellers they can buy or rent m ovies and/or TV episodes. principal(prenominal) competitors are online subscription services internet movies and TV episode provider, kiosk services, and DVD rental outlets.\r\nFrom SWOT synopsis we found the\r\nStrengths as followed, by operation on line is very flexible and very low cost, it has high customer satisfaction levels, and strong companionship base and brand identity. Weakness are the industry, it is evermore changing at a fast speed, it is supplier dependent, postage is a vari competent cost (increases), customers convey to have internet access and or DVD players. Opportunities are: It can expand globally to global markets because its internet access, new technology.\r\nThreats: If it’s not able to adapt or keep up with technology, rivals such as Walmart.com or Blockbuster have pileus to compete against Netflix.\r\nThere are some issues Netflix is face up\r\nNetflix necessarily to watch out for emergence competitors with oceanic abyss pockets and nee d to keep up with the fast growing changes with technology. It is recommended that Netflix increases its customer base (subscribers). This income will offset the ongoing costs. Netflix should move away from DVD rental, it creates a large percentage of its operating cost. Netflix should find out why people are still ordering DVD’s Netflix should educate customers with their streaming and transfering and focus on encouraging customers to stay with the service.\r\nBlockbuster advantage over Netflix is that they are able to release new released titles. Netflix needs to negotiate with entertainment providers to get new releases before than the competitors. Finally it is suggested that if Netflix is able to get new releases prior they should pass a cost for the newest release (separately from subscription download monthly fee).\r\n'