netflix presentation
TRANSCRIPT
Kristie Genoway, Tyler Massie, Carson Toy, Eden Watson, Alyssa Watt
Strategies:
Then, Now, and Beyond
MGMT 5333-001
CONTENTS
• History • Strategic decision
online content streaming
• Environment and Industry• Internal resource analysis• Recommendations
for sustained competitive advantage
HISTORY
• Began operations through mail distribution of DVD’s
• Goal: provide entertainment content to consumers cheaply and effectively
HISTORY
HISTORY
• Implemented online streaming of content in 2007
• Multiple non-equity alliances • Similar corporate culture to Google• Difficulties managing business and
corporate level strategies
STRATEGY
Business Level• Switch from mail distribution to online
streaming• Incorporated streaming costs into pre-
existing subscription packages• Many restrictions for customers
STRATEGY
Business Level• Implemented unlimited online streaming• Created sustained competitive advantage
STRATEGY
Corporate Level• Licensing and distribution agreements• 2008 contract with Starz Entertainment• 2011 partner became competitor• 2011 vendor contracts with Dreamworks,
Paramount, Lionsgate, MGM
ENVIRONMENT
LegalEconomic
Technological
Political
External Environment
INDUSTRY
• Entertainment content provider• Business lifecycle: Growth stage• Trends
Streaming Mobile devices Personalized
5 FORCES
• Threat of entry: low-moderate Large capital costs Extensive network development
• Threat of rivalry: high Slow industry growth Lack of product differentiation
5 FORCES
Competitors:Comparison of ‘200 Top Titles’
Amazon offers 73/200Hulu Plus offers 27/200Netflix offers 200/200
5 FORCES
• Threat of substitutes: high Wide array of entertainment options Low switching costs to substitutes
• Threat of suppliers: high Limited access to content Bottom-line challenges
5 FORCES
• Threat of buyers: low-moderate Low subscription fees Large number of individual buyers Buyers unlikely to conglomerate
• Overall: Expect profits to be slightly above average Will be difficult to develop sustained
competitive advantage
VRIO ANALYSIS
BRAND
• Valuable Yes
• Rarity Yes
• Imitability Yes
• Organization Yes
Result: Sustained advantage
CEO
• Valuable Yes
• Rarity Yes
• Imitability Yes
• Organization Yes
Result: Sustained advantage
PRODUCT DIFFERENTIATION
• Valuable Yes
• Rarity Partial
• Imitability Yes
• Organization Yes
Result: Parity / Temporary Advantage?
CONSIDERATIONS
• Strategic alliance with movie theatres• Acquisition by larger players• Discounted rates for data providers• Distribution regulations
RECOMMENDATIONS
Business Level Strategy:Improved product differentiation
• Movie trailers• Further integration of movie-match
algorithms• Managed in tandem with corporate level
strategies (risk)
RECOMMENDATIONS
Corporate Level Strategy:Backwards integration with media
production companies
• Binge viewing• Achieves product diversification• Go beyond cash financing
(House of Cards, Arrested Development)
RECOMMENDATIONS
Corporate Level Strategy:Develop partnership with data plan providers
• Discounted rates for data usage• Lobby against data caps• Provide higher quality streaming
IN CLOSING
• https://www.youtube.com/watch?v=YgaeNJDnS0w