Netflicks Strategies Analysis - Case Study Example

To remain in the market as the most online subscriber of movies in the United States, Netflix had to employ unique strategies since the competition was high. One of the strategies that the firm had emulated to remain an ever-growing subscriber of online movies was the provision of a large scope selection of DVD titles to its customers (Emerson, 79). This meant that a lot of DVDs were available to the subscribers. Secondly, the firm aimed at acquiring new content by building and maintaining mutually beneficial relationships with entertainment video providers. Thirdly, Netflix provides enjoyable movies to its subscribers and makes sure the subscribers are the ones to choose from a list of movies. The fourth strategy that they use to remain in the market is giving the subscribers time to watch streaming content or receive quickly delivered DVDs via the mail. Additionally, the company spends a lot of funds on marketing to attract more customers while still making sure that its brands and services are available in all major markets.

One of the ethical issues of Netflix is to provide online streaming of videos to individuals that are not pirated (Peter, 23). Netflix aims to revolutionize the way many people rented movies and introduce streaming of movies online. One of the social responsibilities that the firm had to provide to the subscribers was to make sure that movies were readily available to them (Vitorovich, 36). Through the maintenance of strong relationships among the employees and ensuring their safety in the workplace, the firm has afforded to outdo their rivals like Blockbuster who were engaging them in stiff competition (Den and Koopman, 35). In addition, Netflix focuses on shipping about 2 million DVDs on average to daily subscribers and this goal is almost to be achieved since they had been able to get 61% of the company’s subscribers who were watching movies on TV episodes.

Netflix uses different marketing strategies to attract subscribers including banners, and text on popular sites that a lot of people were associated with like yahoo, radio stations, and regional and national television. These marketing strategies can get 194 million visitors annually; this was five times the number of blockbuster customers (Janko, 56). Discounts to subscribers who were active in online purchases were given, and this motivated the subscribers. Netflix Company was able to advertise programs to studios and in return, they got cash considerations from the studios (Chavez, 70). Free movies were offered during advertisement to make sure that the brands were accepted in the market. Advertisement expenses were $205.9 million in 2009, $181.4 million in 2008, and $207.9 million in 2007. Due to the company's culture of marketing and promotions, it has emerged as a top performer in online marketing (Kolb, 45).

Netflix revenues grew from $500 million in 2004 to 1.2 billion. Later in 2010, the figure rose to $2.1 billion compared with their rivals who showed a sharp decline of$569 million loss in revenue (Stelter, 61). In 2010, Netflix's boards of directors authorized the expenditure of up to $300 million to purchase shares of common stock. Netflix recorded a profit of US $6.5 million and revenue of $272 million

Netflix is run by a group of directors who initiates what is done. The company was launched on august 29 1997 with only 30 employees and 925 available casual vacant positions. Employees are paid in dollars (Lohr, 20). Online pay per rental was $4 and an extra fee of $2 as a rate fee but the company 2000 built its reputation since it was known for late fees and poor management.