Comprehensive Analysis of Netflix (Case Study Sample)
The TASK IS A report providING a comprehensive analysis on Netflix. NETFLIX is a Streaming Video on Demand Company that is among the many competitors who have flooded the market. The report seeks to answer four questions which will have formed the different sections of then paper. The report begins with making a macro-environment with the context of the global region by conducting a PESTEL analysis. It is closely followed by the Porters five forces model to identify the current competition force of the company in the market. Subsequently, an internal analysis of Netflix is provided by using VRIO framework together with SWOT analysis. Considering both the external and internal forces affecting the company, recommendations will be given.source..
Netflix Strategic Analysis
The following report provides a comprehensive analysis on Netflix. This is a Streaming Video on Demand Company that is among the many competitors who have flooded the market. The report seeks to answer four questions which will have formed the different sections of then paper. The report begins with making a macro-environment with the context of the global region by conducting a PESTEL analysis. It is closely followed by the Porters five forces model to identify the current competition force of the company in the market. Subsequently, an internal analysis of Netflix is provided by using VRIO framework together with SWOT analysis. Considering both the external and internal forces affecting the company, recommendations will be given.
Table of Contents
Executive Summary 1.0
PESTEL Analysis 2.1
Political Factors 2.2
Economic Factors 2.3
Social Factors 2.4
Technological Factors 2.5
Environmental Factors 2.6
Legal Factors 3.0
Porters Five Forces Analysis 4.0
Internal Analysis- VRIO Analysis 5.0
SWOT Analysis 6.0
Strategic Recommendations 7.0
Netflix is a paid streaming service based in the United States that lets its premium subscribers watch a variety of shows from different countries. The company, which was founded in 1997 and is based in Los Gatos, California, had 2045 full-time employees as of 2012. Its annual sales for 2012 was $3.61 billion. In September 1999, Netflix announced the monthly subscription option, launching its business strategy based on flat-fee unrestricted rentals sans due dates, late penalties, shipping, or per-title rental fees. Since then, the company has had tremendous success. Since 2012, Netflix has played a more prominent position in producing and distributing movies and television shows, and as a result, it now has a wide selection of "Netflix Original" material available in its online library. According to a report from 2020, Netflix's operational income is currently $1.2 billion. Netflix has retained its top spot as the most popular streaming service for movies and television, despite the fact that the film and television industry has become extremely competitive as a result of the creation of multiple movie and television distribution organizations in recent decades (Flint & Maidenberg, 2020).
Netflix vision statement is “To continue being one of the leading firms of the internet entertainment era.” This means, the company is focused on rising to be the highest competitor in the entertainment industry.
Netflix mission statement is “To entertain the world.” The mission is mainly majored on the nature of the company to always offer viewers and subscribers on-demand movie streaming services. They also major on providing preferences for customers as well as well as addressing their expectations.
2.0 PESTEL Analysis
2.1 Political Factors
Audiences are shifting from regular television in favor of on-demand streaming services like Netflix in the United States. However, the US telecom company AT&T has asked the Federal Communications Commission to enact stricter usage guidelines due to an increase in internet usage. If approved by Congress, internet prices might increase, endangering the viability of Netflix's online streaming service (NFLX, n.d). Globally, governments have strengthened their control over technology corporations' data collecting and other operations. The government has adopted a very tough stance against technology companies engaging in monopolistic practices or targeting customers through their data collection tactics, especially in the European Union. Challenging EU regulations will try to place streaming companies like Netflix in the same class as traditional television distributors, enforcing the need that 30% of Netflix's material be produced in Europe. Additionally, Netflix will pay the same 26% tax as traditional media, necessitating the company to pass the expenses along to users (Gregory, 2021).
2.2 Economic Factors
In the context of commerce, economic variables also directly influence outcomes. Expenditure on entertainment and leisure increases as economic activity and employment levels rise. People in the United States have been paying significantly on services like Netflix as a consequence of the excellent growth of the national economy over the past few years. Nevertheless, since the coronavirus outbreak, trends have subtly modified, and while global economic activity has decreased, Netflix membership has increased significantly. Once stay-at-home policies are loosened in the United States and other parts of the world, economic activity is anticipated to begin increasing once more. And this has been experienced as some have been loosened and businesses reopened. People will try to save more if the economic standards continue rising, which could have a negative impact on Netflix's business if there is a lengthy period of low economic activity (Gregory, 2021). Additionally, unemployment has increased significantly, and if the condition endures shortly, people will begin reducing all superfluous
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