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Case study- Netflix 2012 - Essay Example

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This paper aims to discuss the strategies of Netflix while analyzing the impact of five forces model of competition, driving forces of change, future of movie rental industry, keys to successful competition and the strategic changes made by Netflix.
Buyer bargaining power is…
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Case study- Netflix 2012
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Download file to see previous pages Substitute products have a very strong influence over the organization because firms in other industries are producing substitutes to what Netflix is offering. These products are also comparatively priced to attract more customers.
Bargaining power of suppliers is strong because there are very few content and studio providers available in the industry. Furthermore, the suppliers are significantly differentiated and the overall procedure of contracts is long-term and expensive.
It is now easier for few firms to enter in to the market primarily because demand is constantly increasing and there are very low barriers for entrance, for instance, unrestricted regulatory policies, less capital requirements, low degrees of customer loyalty and brand preferences etc. (Peteraf).
Based on the above analysis it can be summarized that movie rental industry is significantly attractive to make huge profits. This is firstly because customers are increasing rapidly and the new technological developments are encouraging them towards live streaming and DVDs. Although this is highly competitive market but if the organization applies right strategies then profits can be increased.
The overall concept of movie rentals has drastically changed with the development of internet technology. Previously we used to get our movies from physical stores but today millions of people subscribe to websites such as Netflix in order to rent DVDs and watch movies. Netflix has also given significant customer facilities. In the near future customers are expected to switch completely to live streaming and online video libraries while paying a small amount as rent.
The long term growth rate of Movie Rental Industry: In the last two decades customers using online movie rental services have significantly increased which has actually influenced the long term growth rate of the entire industry. It is evident that young people specifically from 14-34 years of age are now ...Download file to see next pagesRead More
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