Netflix - Admission/Application Essay Example

Download file to see previous pages The subscriber can upgrade their account to receive more than one DVD per shipment, but this has become a far secondary point on the website that is accessible only if one goes searching to see if this is a possibility. It is the convenience of streaming that is the strongest competitive advantage presented by the company. The competitive advantage that Netflix is trying to achieve is in providing content instantly rather than having to leave the house to get a DVD or use another form that may have a waiting time involved. The low price of the base subscription is also used to provide a competition with other services, such as iTunes, which costs a great deal more per purchase than would the Netflix subscription price at 7.99. per month. The potential to stream through the Wii system, PS3 and Xbox instead of only through the computer is also an advantage. What Netflix is trying to connect with through their subscription system is the consumer need to have convenience and low cost so that they compete against other services that require more action by the consumer in getting the product that they want, more money per product usage, and the higher state of risk when renting DVDs at either store or through vending boxes such as Redbox which is eliminated when the consumer uses a low cost monthly services such as Netflix to get the video content that they are interested in seeing. 2. How strong are the competitive forces in the movie rental marketplace? Do a five-forces analysis to support your answer. There is strong competition that Netflix must deal with through their business strategy. The following is an analysis through Porter’s five forces of the industry, revealing the many ways that consumers can get content and where Netflix stands within the competition. Threat of New Competition: Innovation in the digital content market is appearing all the time. Hulu is one of the new products that have entered and gained popularity in the market. This entrant has forced Netflix into a new configuration. As well, On Demand through cable companies is a new innovation in the last few years which threatens the Netflix business model and forced it into changes. Threat of Substitute Products: Netflix is at threat through services like Hulu and iTunes which present similar content through different approaches. iTunes costs more per rental of digital content, but availability of content is sooner than Netflix can release it. In addition, ownership of digital content is possible through iTunes. Hulu is a similar product with only digital download available. Hulu’s focus is on television content, but their price is the same per month for Hulu Plus Bargaining Power of Customers: With all the options, consumers have already pushed Netflix to change their business strategy in order to compete. Bargaining Power of Suppliers: Netflix is restricted by not being able to provide instant access to newer content, restrictions placed by suppliers. Intensity of Competitive Rivalry: Because of the high interest in seeing new content as quickly as possible, the risk of a competitor coming up with an innovation that threatens the current business strategy is high. Where Netflix was once the innovator, now others are the threat. 3. What does a SWOT analysis of Netflix reveal about the overall attractiveness of its situation? A SWOT ...Download file to see next pagesRead More