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programming distributors, direct broadcast satellite providers and telecommunication providers; (3) entertainment video retailers; and (4) DVD rental outlets and kiosk services (“Netflix, Inc. Form 10-K,” 2012). According to Aaker (2007) market analysis can be viewed at through seven dimensions: market size, market growth rate, market profitability, industry cost structure, distribution channels, market trends and key success factors.
According to Datamonitor (2012) the global movies and entertainment market generated total revenues of $109.4 billion in 2009 which represented a 0.2% growth rate from 2005-2009. This industry spans multiple sectors and is highly dynamic. The major growth driver for this industry is the rapid evolution of platforms and delivery methods epitomized by smartphones, tablets and the social Web.
Analyzing an organization’s value chain makes it easier to identify where value is added and/or where the organization could develop a cost advantage. Online businesses such as Netflix benefit from the Internet’s ability to lower the costs in much of their value chain especially in inbound and outbound logistics, operations and distribution channel. However, in order to develop competitive advantage online companies must invest, innovate and grow competencies in technology, infrastructure and service. Also, these companies have to operate on low-cost models given the market’s expectation for lower products prices.
Plunkett Research (2012) identified increased consumer demand for more control over what they read, listen to or watch as the premier factor that will drive changes in this market in the near future. According to them, issues of control will be manifested through portability, pricing and delayed viewing or listening. Portability refers to the ability to view and share content across multiple platforms such as iPads, Android smartphones, digital TV and desktop operating systems. Pricing for content is important given
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The service is provided over internet for watching movies and TV episodes on PCs, TVs and Macs. The company is operated with over 2000 employee at its corporate headquarters and at the shipping centre (Rappa, “About Netflix”). The company offers various subscription plans for the customers stating at just $7.99 for the unlimited service for watching movies and TV episodes.
It was founded in 1998 and is based Los Gatos, California. The company offers on-demand internet streaming media in the U.S., Canada, and Latin America and has announced that it will expand it operations into the European market starting with Spain by 2012 (Whitehouse, 2011).
Technology advances regularly, thus, by engaging customers in the latest technology, it allows them to keep in pace with the advancing technology. In addition, despite the company being in the industry where profitability is the priority, it promotes ethics by ensuring that customers are well informed of the movies so that they may make their own choices.
In addition, Netflix has continued to enjoy an increase in the number of subscribers, which has contributed to its success. Despite being in a competitive market, Netflix has managed to stand out among the rest, by achieving a competitive advantage. According to Porter (1998, p.22), a company has to adopt a generic strategy that fits it well, hence enabling it to achieve a competitive advantage.
Netflix, an online company that rents DVD movies to its customers has various strategies that ensure that its other customers do not take their customers. Some of the strategies include, avoiding overhead costs like utilities and rent to run physical stores instead they use the capital to ensure they have all the DVDS their clients and subscribers need.
If the model is applied to Netflix, one of the largest online movie rental companies, it can be concluded that the company competes with its competitors on cost leadership cum differentiation strategy. The reason behind
The questions that will be asked will be clear and carefully designed to avoid infringing the rights of the respondents. The research will make sure his/her personal bias and opinions do not interfere with the research outcome (Kimmel, 1989).
The research will
with your friends may not be deemed desirable, since the time can also be used to concentrate on work, finish the homework, complete some house chores or other similar activities. Now, in this context the question arises regarding whether or not these distractions lead towards
Economic: Economic situation of the nation is somewhat uncertain. Financially the country has been badly affected by the recession. It is still in the phase of recovery. Due to some stimulus packages, the economy is improving but