Netflix case free essay sample

I believe the competitive forces in the movie rental market place are very competitive and tough to stay in business. There are so many competitors that have and continue to take market share of the industry without any sign of it to be regained. This happens because of pricing and the medium in which that can be rented, sold or watched. These alternatives to rental are purchasing movie through retailers, renting through vending machine kiosks, Netflix ( movie delivered or streamed), cable subscription movie channels, pay-per-view and video on demand (VOD), internet movie and TV content providers (ITunes, Hulu.  com, etc), and pirated files or films. These forces have all played a strong role in phasing out the classic traditional going into a video rental store and renting movies. I also think as time goes on those that will not assimilate to the new technology will not be a small market share, which will be obsolete. In addition to excellent financial growth, Netflix has also experienced rapid subscriber growth with total number of subscribers increasing each year since 1999. Industry trends and Netflix’s excellent strategy to keep customers returning to use their site and also bringing new customers to the site has allowed Netflix to remain the industry leader they are today. However, rival companies such as Amazon have begun to enter the industry with large video rental libraries of their own. Netflix’s Strategy: Since the introduction of Netflix’s online movie rental service in 1999, the company’s CEO and founder, Reed Hastings, mission has been to create the world’s best online movie provider and increase subscribers and earnings per share each year. He plans to do this by imposing a subscription-based business model and the use of a multi-pronged strategy to build a growing subscriber base. This business model allows for customers to choose from eight different subscription plans that ranged from $8. 99 per month to $47. 99 per month. Movie rentals are sent to subscribers from one of Netflix’s 50 distribution centers in the United State. Approximately 98 percent of subscribers live within one day delivery of the distribution centers which provided customers with close to instant access to all of Netflix’s movies. Also, Netflix provides no shipping or late fees which allows customer to have more flexibility when renting movies. As the industry has evolved, Netflix has been able to remain the industry leader because of their large streaming library that is provided to all subscribers. The industry has seen a change from physical movie rentals to a greater increase in online streaming of movies with creation of new technology that allows many different devices to stream movies online. Netflix has done an excellent job of keeping up with this growing trend by allowing customers to install Netflix on many of these devices such as iPads, Blue-ray players, and gaming consoles. Also Netflix has kept up with this new industry trend by doing an excellent job of new content acquisitions which allows them to expand their video library and gain the rights to new releases faster. Netflix’s easy to use website and video library has also allowed the company to remain the industry leader and continue its strategy to increase subscriber base. Its website and video library contains approximately 100,000 movie titles. The video library is organized in a way that makes it very easy for subscribers to navigate through and even does a number of things to help customers find the best movie for them such as movie recommendations based on past movies watched, subscriber ratings, and most viewed movies on the site by other subscribers. Netflix has done an outstanding job of communicating its strategy to customers and employees. The company uses multiple marketing and advertising channels to reach its subscriber base. Marketing strategies such as one-month free trials has done an excellent job of allowing the company to continue to increase its customer base. In addition to communicating effectively with customers, the company has done a great job of communicating with its employees by having a set business strategy and business model with a concrete mission and set of goals and a concrete model on how to reach those goals. The company’s great understanding on how to communicate to external and internal stakeholders has led them to remain as the industry leader.