Netflix Corporate Level Strategy Paper

Netflix does not allow customers to watch all released movie on demand. There are some movie that customer cannot instantly watch. If Netflix developed streaming service and figure out a problem of coexisting between rentals and streaming service, Netflix can create competitive advantage.

The third issue affecting Netflix is the age of movies that they offer to their customers. Netflix cannot deliver the newest movie titles online because they are not offered through VOD for at least a month after they come out on DVD. This is a huge disadvantage to their customers that exclusively use Netflix’s online service. This is the only advantage that Blockbuster still has over Netflix, because if someone wants to see a movie the day that it comes out on video then

Netflix has been in the video rental industry since 1997. Beginning with the fourth quarter of 2011, Netflix has three operating segments: Domestic video streaming, International video streaming and Domestic DVD rentals.

Corporate-level strategies are liable for market definition; they address the entire scope of the business. This strategy helps a business to diversify its service. It gives them direction in which geographic region they should operate and which service markets to strive in. “Thus, an effective corporate-level strategy creates, across all of a firm’s businesses, aggregate returns that exceed what those

Netflix can insulate itself from this threat to existence by staying competitive within the market by making an impact with nearly 23 million U.S. users it is now the largest video service within the country. Most observers expect the company to have more than 30 million subscribers by the end of the physical year. But the animating force of perceived Netflix Paradox is disbelief that when a company does what Netflix does can thrive within the media industry. As long as Netflix primarily focus in the business of aggregating entertainment, the company with prosper Knee (2011).

They have done some ads on certain movie sites as well as some direct mail. That is about all they have done these days. The main thing that got most people is the unlimited amount of DVD rentals you can get. So depending on how fast you can watch it and mail it all depends on when you get the next one.. Like everything else advertising can be misleading. When a customer signs up for the DVD plan, and picks how many they want for a certain price. What they have been doing is limiting the customers the movies while charging the same price. Netflix was sued in 2005 because customers were not getting movies the next day as what was written and promised. Netflix has denied any false advertising or wrongdoing t and they settled the lawsuit out of court. They offered all the subscribers one free month. Netflix then sent each customer telling them with specific instructions. If they did not respond to the instructions that were sent to them, they would be automatically enrolled in a higher plan. The customers that they lost due to this they gained back by offering a month free of service. Netflix just looks at it as another way of advertising rather than an apology to all there customers. Netflix knows how to target the ones who will pay more. They know that the busy parents will pay more. Why? So they are not making several trips to the movie store for there children to have something to watch or worrying about the late fee's. The cost of unlimited streaming is $7.99 a month, and the unlimited dvd rentals is also that amount. If you want them both you you will be paying $15. They will also have to have two different memberships for

Netflix could pursue movie studios if it can build up a higher number of customers who are watching their exclusive shows. The con to a movie studio is the fact that there will be various expenses which could result in removing part of their customers who enjoy the low 7.99 rate. Therefore Netflix would become something that it is trying to compete against which is the bigger cable providers. An avenue that Netflix is best suited for is creating original shows, and movies such as House of Cards. For Netflix to take the next step it has to create at least one more show that has a national audience such as the type of numbers that Breaking Bad, or Walking Dead has. This would pave the way for them to create more of a fan-base, and allow them

The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in

Netflix provides a subscription-style e-commerce service. Over 95% of customers pay at least $17.99 a month which includes unlimited rentals with up to three titles at a time. A comparably low monthly fee, allows Netflix to lead market share of online DVD rentals while competing with traditional brick and mortar rental stores. Meanwhile, Netflix might keep the customers who try the service and happy with it continue paying the monthly fee. Therefore, Netflix has fewer problems in predicting revenue 's.

Netflix holds a contract with movie studios and film producers (such as MGM studios, Warner Bros., Dream Works, etc.) to gain direct distribution and access to first run movie content without the traditional 9 to 12 month delay. This strategy of developing key alliances (Best Buy) with content providers in film and the television sector, and merchandise of DVD hardware has moved Netflix straight to the top of the market, making their brand name recognized and trusted. * Very competitive prices.

The popularity of another video on demand companies are making it challenging for Netflix to continue to license content from television networks and movie studios. Television networks are creating their own video on demand series which eliminates the availability for Netflix to purchase content. Since Netflix debuted in 2007 it has had its annual revenue from 1.2 billion to $6.8 billion (Nocera, 2016).

Netflix has an extremely high growth rate for their revenues as they are doubling every six months. While revenues are doubling in the last year sales and marketing expenses have gone up more than three times. The main objective now is to make sure that after an initial public offering Netflix will continue to create positive cash flows.

This report has been designed to understand where the video market is today, what consumer trends are, and how to stay ahead of competitors. This report will research these three points:

Business and corporate strategies can be very important in a firm if used effectively. With many different strategies on offer, a business will most definitely find one that suits them best, enabling them to utilise it to their best ability. According to Lynch (2006) “a corporate strategy can be described as the identification of the purpose of the organisation and the plans and actions to achieve that purpose”. Essentially, strategy is all about where an organisation would like to be long-term, in addition to the markets and activities they would like to compete in and how they can perform more effectively than their competition. According to Porter, (1985) ”Sometimes companies such as Microsoft get so far ahead that they seem to avoid the need for strategic choices, but this becomes their ultimate vulnerability”. Therefore, it is clear that having a strategy is important for a business long-term. There are three main types of strategies depending on what level an organisation is at; these include, corporate level strategy, business level strategy, and operational strategy. According to Lynch (2006) corporate level strategy encompasses major objectives, goals or purposes with essential policies and plans in order for a company to achieve those goals. They would state this in a way that would define what the business is in and what the business is, followed by what the business aims to be in and where they intend to be. A business level strategy tends to focus more on

Strategies in any business are instrumental in the proper growth and expansion of a company. A strategy is a set of analytic techniques for understanding and influencing the firm 's position in the marketplace (Raimundo, 2001). Moreover, the business strategy enables a company to match its internal capabilities and its external environment. Also, the plan assists the company to realize its objectives and mission set at its inception or along the course of its operation in a particular period. The business-level strategy involves organizational decisions on how to compete for customers in the market and industry. It includes choices about the service mix, products, new technologies, facility locations and the like.