NETFLIX

STRATEGIC ANALYSIS
Prepared By
Team 5
Bingxiao Mei
Cory Lueth
Florence Epa
Jeffery Pike
Taylor Owens
Xin Qi

In Partial Fulfillment
Of the Requirements for
MANGT 595: Business Strategy

December 7, 2015

Table of Contents

Executive Summary

Introduction

External Analysis

Internal Analysis

Strategic Challenges

Strategic Recommendations

Implementation Plan

10

Bibliography

12

Appendices

14

Executive Summary
Netflix is a subscription-based video content service founded in 1997 and has evolved over the
years. They have experienced much success in the United States market, however, in recent years
growth in the U.S. market has slowed significantly. In order for Netflix to continue growing they
must expand internationally. Netflix is presented with several challenges while expanding
internationally and they must use their resources to overcome these and remain successful.
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Netflix has 3 options in gaining global success. They can choose to keep the same methods they
have been using in the U.S. but apply it globally. They can venture into new areas such as live
broadcasting and news shows. Or lastly they can choose to create partnerships with international
film producers to create regionally specific original series.

Introduction
Company Overview
Netflix Inc. is an international provider of on-demand Internet streaming media available to
viewers in all of North and South America, Australia, New Zealand, Japan, and parts of Europe
and of flat rate DVD-by-mail in the United States, where mailed DVDs and Blu-ray are sent via
Permit Reply Mail. The company was established in 1997 and is headquartered in Los Gatos,
California. It started its subscription-based service in 1999. By 2009, Netflix was offering a
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collection of 100,000 titles on DVD and had surpassed 10 million subscribers (TechCrunch).
Netflix has been rated the most satisfied customer site five consecutive times. Netflix is an online
movie rental provider and a subscription-based film and television program rental service that
offers media to subscribers via Internet streaming and US mail. Netflix is able to provide a large
number of DVDs, and allows customers to quickly and easily pick the movie, while offering free
delivery. It can be streamed through PCs, TVs, iPads and iPhones to watch movies and TV
shows. And, it also can also be streamed through an Xbox360 or PS3 that is connected to a TV.
Issue Statement
Netflix has had great success in the national market and is working on expanding into emerging
markets and become a multinational corporation (MNC). As we have learned in this course the
strategic planning process is just as difficult if not more so when looking at the international
scope in comparison to the national arena. There are some countries that are familiar with the
Netflix Brand and have an existing industry with competitive companies, countries such as
Europe and other developed markets and then there are those that have not. Such countries like
most of Africa and some Middle Eastern, Southeast Asia countries with developing economies
are not at all familiar with not only Netflix but most technological and internet products. Netflix
must decide on what would be the best international business strategy by doing through research
and development.
The Issue of what Global Strategy that Netflix decides to adopt is a crucial one especially if they
are seriously considering becoming the number one MNC in their industry. They must take into
consideration the pressures of cost reduction and local responsiveness for each country and
formulate their strategy accordingly. The cultural differences will matter greatly and not only in
the strategic formulation but also in the implementation of said strategy/s in these international
markets.
External Analysis
Industry Overview
Cable television was born in 1948 through the creation of the first CATV (Community Antenna
Television) system by Ed Parson of Astoria, Oregon. The CATV system, consisting of twin-lead
transmission wire strung from housetop to housetop, was made to serve the original purpose of
cable television. This was to deliver broadcast signals in areas where they were not received in
an acceptable manner with an antenna (Ciciora). The CATV Systems Industry has come a long
way to become the industry that we know of today. Since 1948, the cable industry has been a
force for American innovation. It has grown from a mere 28 cable programming networks
existing in the 1970s to 800 networks with 93% of American households having access to cable
broadband by the year 2012 (Association). The Cable TV sector presents investors with a
compelling opportunity to own stakes in well-established, consumer-driven franchises. Big
subscriber bases (and the strong recurring revenue and cash flows they generate) provide the
major cable companies, and their satellite-broadcast brethren, a good degree of stability in both
good times and bad (Liew). Over the past twenty years, Cables market share has dropped
significantly while Satellite and Telco Video Providers now serve nearly 50% of subscribers.
With this being said, the Cable Industry is the nations largest broadband provider of high-speed
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internet access, serving more than 51 million customers. This was possible after investing $200
billion to build two-way interactive networks with fiber optic technology. Cable companies also
provide state-of-the-art digital telephone service to more than 27 million American consumers
(Association).
Five Forces Analysis
Risk of entry of potential competitors: This force is considered to be high as the satellite industry
is one of the competitors that CATV systems takes great notice of. Generally, traditional cable
companies rule in the high-population metro areas while satellite broadcasters have a leg up on
the competition in rural areas (Liew). According to the Satellite Broadcasting and
Communications Association, satellite TV offers a distinct technological advantage over cable
TV systems: cable operations are essentially satellite operations in that cable networks receive
their programming via satellite but then re-transmit the signals through the cable signals to a
greater or lesser degree on the way to the customers home (SBCA). It is because of this blurred
perspective in the difference between the two industries that make this force one of the highest.
Cable industry data claim that its viewing value by the hour is worth $0.25 making the price for
enjoying cable value service great when compared to other forms of entertainment (Association).
On the other hand, cable rates differ widely from market to market. If you compare the number
of channels available on satellite television (even in the basic tiers) to the number of channels
offered by cable (even digital cable), satellite is clearly the better buy (SBCA). Other industries
such as the telecommunications industry where a firm such as AT&T has acquired DirecTV (a
satellite broadcasting service provider) where with the acquisition, AT&T becomes the latest
telecommunications giant seeking to establish an even greater reach (Merced and Gelles).
Threat of substitutes: This force is low to moderate. There are low to no switching costs for this
industry. Providing entertainment to the masses can be facilitated through other means such as
movie theaters, live orchestrated productions, concerts or sporting events. In measuring the cost
of entertainment, the estimated average cost for a family of four to enjoy three hours of
entertainment ranged from a high of $263 for a live sports event to Cable being the lowest at
$0.75 (Association). With technological development being as advanced as it is in the CATV
systems industry, most substitute material is also offered through television networks. The video
game industry, also known as the interactive entertainment industry, is a viable substitute
considering in 2010 67% of US households played video games and the average gamer spent 8
hours a week playing (Entertainment Software Rating Board).
Bargaining power of buyers: This force is moderate to high. The concept of subscribers now
having more and more flexibility in selecting television channels a la carte style and at their
leisure has made it challenging for CATV Systems Industry to keep traditional subscribers. Over
the past twenty years, cables market share has dropped significantly while satellite and telco
video providers now serve nearly 50% of subscribers (Association). As mentioned previously
there are low to no switching costs for this industrys subscribers and there is also low to no
brand loyalty. In terms of plain size and numbers of subscribers we see in the top five video
subscription companies 1) Netflix with 42.3 million, 2) DirecTV & AT&T U-verse with 26.0
million, 3) Comcast with 22.3 million, 4) Dish with 13.9 million, and 5) Time Warner Cable with
11.0 million (Association). The numbers speak for themselves and they also show the possibility
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that lies in buyers who can threaten to produce the product themselves. As of March 2015,
creators filming in YouTube Spaces have produced over 10,000 videos which have generated
over 1 billion views and 70 plus million hours of watch time (YouTube).
Bargaining power of suppliers: This force is low. Much of the infrastructure for this industry has
been purchased and placed. This industry is of great importance to its suppliers. In tracking
cables investment in infrastructure since 1996, cable has invested over $230 billion in capital
infrastructure (Association). In terms of the number and size of suppliers there are four
categories that are considered with regards to cable plant costs: cable 38%, electronics 24%,
hardware 20% and passive components 18% (Ciciora). This distribution appears shows that no
one supplier greatly impacts this industry. Direct satellite access is a substitute product that might
eliminate the need for cable. With this product there would be sunken costs rather than buyer
switching costs if the cable industry were to switch over to satellite entirely.
Intensity in rivalry among established firms: This force is high. Relevant to the information
previously given in the other forces there are advanced customer needs displayed as customers
freely move from one industry to another and among different firms in the industry. Fixed
programming fees and low variable costs mean that there is little incremental expense associated
with an increase in subscriber viewing (Liew). The business of firms in this industry is to provide
a commodity like product. Measuring cables economic contribution, cable & telecom is the
largest investor in the growth of the U.S. economy at $49 billion (Association). The industry is
consolidated and this makes for intense rivalry among the top firms who share the majority of the
market share. There are also high barriers to entry as traditional cable companies must secure
franchise rights from municipalities, which while not typically exclusive, provide a significant
hurdle to newcomers (Liew).

Internal Analysis
Resources
The resources usually refer to the inputs that firms use to create goods and services. These goods
and services can be divided into two different characteristics: tangible resources and intangible
resources. Tangible resources are physical, visible and quantifiable resources which reflect at the
physical, financial and technological resources. Intangible resources usually do not have a
physical form which means they are commonly invisible. The intangible resources reflect the
culture, knowledge, innovation, reputation and brand equity resources.
Tangible Resources
Physical: Netflixs physical resources include a moderately sustainable headquarter located in
Los Gatos, California. They own a good server and have an enormous number of customers and
suppliers and over 50 DVD distribution centers that are strategically positioned around the U.S.
in order to efficiently meet DVD-by-mail demand (Curtis, 2011).
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Financial: For now, Netflix has 50.05 million total members which include 36.24 million
domestically and 13.8 million internationally. Netflix stated that they estimate they can be 2 to 3
times larger than current linear-HBO, or 60-90 million domestic members. Their domestic
segment can generate $8.64 billion in revenue, assuming a $96 annual revenue per user figure
(Cho, 2014). In 2010, Netflix's stock price increased 219% to $175.70 and it added eight million
subscribers, bringing its total number of subscribers to 20 million. Revenue jumped 29% to
$2.16 billion and net income was up 39% to $161 million. In April 2011, Netflix was expected to
earn $1.07 a share in the first quarter of 2011 on revenue of $705.7 million, a huge increase
compared to the year-earlier profit of 59 on revenue of $493.7 million, according to a survey of
25 analysts polled by FactSet Research. In May 2014, Netflix increased the fee for UK
subscribers by 1. The price increase took effect immediately for new subscribers, but is delayed
for two years for existing members. Netflix applied similar increases in the United States (an
increase of $1) and the Eurozone (an increase of 1). According to Forbes, "Netflix can add
roughly $500 million in annual incremental revenues in the U.S. alone by 2017 with this move"
and "roughly $200$250 million in incremental revenues from price changes in international
markets" (Wikipedia). Based on the financial revenue and profit and substantial number of
customers, they have great resources compared to their competitors.
Technological: Since Netflix has an application for devices, those compatible devices for Netflix
are significantly important as the majority of these devices support Netflix streaming, a popular
service. Some big name brands that support the Netflix application are Apple, Amazon, and
Android. Meanwhile, software support also helps Netflix be successful on Windows or Linux.
Also, it can be played on video game consoles, Set-top boxes, Blu-ray Disc players, TV, and
handheld devices (Wikipedia).
Intangible Resources
Culture: Netflix has strayed from the traditional necessary production of a pilot episode in order
to establish the characters and create arbitrary cliffhangers to prove to the network that the
concept of the show will be successful. Though traditional networks are unwilling to risk
millions of dollars on shows without first seeing a pilot, Spacey points out that in 2012, 113
pilots were made, 35 of those were chosen to go to air, 13 of those were renewed, and most of
those are gone now. So they are free from needing to appease advertisers to fund their original
content, a model similar to traditional pay television services such as HBO and Showtime
(Wikipedia).
Customer Loyalty: From the Appendices, we can clearly see the subscribers of Netflix are
increasing with a constant and steady trend. This means streaming shows is accepted by common
people which will help as they expand internationally into 31 countries and regions.
Innovation: Innovation resources includes trade secrets, patents, and copyrights. As for the firms
technological resources, the tangible resources relied on in the past was DVDs. Given how easy
it was to copy the DVD business plan, Netflix has shifted its once tangible asset into an
intangible asset; DVD distribution has shifted to streaming movies and exclusive distribution
rights. Initially, Netflix was the first to market; however, Mr. Hastings did not believe that the
industry would remain constant. Mr. Hastings ability to manage risk and foresee and capitalize
on the shift in consumer preferences from DVD-by-mail to streaming movies added to the firms
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success. Mr. Hastings cannibalized his own shrinking of the market in order to develop a new
business plan the focused on possibly capturing the entire market, as long as Netflix can secure
distribution rights with Hollywood studios. In addition to this, Netflix relies on a $1 million
algorithm that helps the firm make useful movie recommendations to its customers (Curtis,
2011).
Capabilities
The capabilities are the companys skills at coordinating its resources and putting them to
productive use. These usually summarize the functional capabilities and value chain management
which help Netflix be successful in the industry and unbeatable with the competition.
Value Chain Management:
Human Resources Management: Netflix has an intense work atmosphere that keeps all
employees brainstorming new and innovative ideas. They clearly outline objectives and to help
keep their service driven company booming.
Research & Development: Streaming DL movie content directly onto PCs, Macs, and gaming
consoles and continuing to expand the streaming market.
Sales Marketing: It is a well-known and trusted national brand that has used a word-of-mouth
strategy to help build marketing. Even today their guarantee can be found on the main website
If you decide Netflix isn't for you - no problem. No commitment. Cancel online at anytime.
(Netflix).
Customer Services: Customer service is also a sale point for Netflix because they allow the
customer to rank the movies they have received in the mail, which can be updated by the
consumer at anytime. Another service they provide is free and easy shipping. Netflix has taken
all of the hassle out of shipping and made it as easy as dropping ones DVDs off in ones mailbox
and obtaining the new rentals about a day later.
VRINE
VRINE is a criteria for resources and capabilities to become sources of competitive advantage
and it includes those that are valuable, rare, imitable, non-substitutable, and exploitable. Because
Netflix is a new model to distribute the movies and shows for the audience and is constantly
changing, the value here is constantly increasing. Specifically, the internet technology spreading
to the world and financial resources can help them to expand into other markets to get more
opportunities. Although they have a couple of competitors, they are still are rare technology in
the industry. Many products they provide are unique for the industry, especially their original
series House of Cards as it has received numerous TV show awards. Because this industry just
has a couple of dominators, the technology is barely imitable at here. The low cost and high skill
help them to stand out in their industry. Research and development they have gained throughout
their history is non-substitutable. Because of the knowledge gained from and the cost of R&D, it
is hard work for new entrants to copy their business model. Lastly, the strategy and the business
model is exploitable, Netflix is always the first to search for new markets and they expect to
expand their value and products which is a dominant capability of the industry.
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Strategic Challenges
Industry Opportunities
There are many opportunities for online streaming companies to expand outside of the United
States. Online streaming subscriptions are a cheap and easy way to watch a vast array of movies
and shows. Big companies have the capital needed to buy popular movies and shows in other
countries for their streaming services. They also have enough capital to create original shows and
not have to deal with licensing problems, which will make it easier to grow internationally.
Industry Threats
There are many threats to the industry. Cable and satellite services can offer more money for
shows than online streaming services, allowing them to purchase more and better shows. In
numerous countries it can be easier to just watch television. Also, viewers often want to watch
current news or live television like award shows and sports. If a customer visits another country,
they cannot watch their favorite movies and shows on online streaming services. This is due to
the numerous licensing rights. Many outside of the United States stream content from these
websites illegally to be able to watch their favorite shows. Finally, some countries lack the
penetration and broadband speeds needed for these services to work (Steel). Although 78% of
those in developed countries have Internet access, only 31% in developing countries are
projected to have Internet access by the end of 2014 (Committed). This limits the markets that
online streaming providers can expand into, especially those where they could become the sole
online streaming provider.
Firm Strengths
Netflix has numerous strengths that will help them to expand internationally. The first is that
Netflix is made extremely accessible and convenient through an application that works on nearly
all electronic devices. Secondly, Netflix has created several original movies and TV series, which
are all in high demand. One of the reasons for this is the strong word of mouth advertising from
customers that has been a very strong asset to the company. In addition to this, brand recognition
is high as the word Netflix is now a verb. Lastly, it is one of the cheaper online streaming
services, even though there are no advertisements, it is significantly cheaper than cable and
satellite at only $7.99 a month.
Firm Weaknesses
Lack of content is Netflix's fatal flaw. Currently, the DVD portion of Netflixs business has had a
heavy loss of revenue in each quarter; this is the reason why Netflixs once vibrant DVD
business is no longer an integral part of its growth. Netflix provides DVD delivery and online
streaming services. For the two services, users paid $10 a month. Later on, Netflix decided to
raise the price of services, and now users pay $8 per month, and only enjoy one of the two
services; if both are selected, users pay $16. After the price increase, users and investors were
dissatisfied. The company's business volume decreased significantly. Netflix soon realized the
consequences of the increased price as they lost about 1 million more users than expected.
Investors were also dissatisfied as the company's stock price fell almost 50%. Another weakness
of Netflix is that their international business has been losing money due to the high start-up
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costs and most likely will for the next year (Steel). Building a library for each individual market
is expensive, and Netflix often has to negotiate individual rights agreements for each different
country where it operates (Luckerson). Many other companies, such as Hulu and Amazon
Prime, have introduced their own platforms as well. This creates greater competition and usually
shows and movies cost more due to competitive contract bidding. Also, these contracts for shows
and movies expire often, leaving customers dissatisfied.
Strategic Challenges
Netflix faces many challenges in furthering its global expansion. One of the more prominent
challenges for Netflix is overcoming the rivals who are already established in the countries
Netflix is expanding into. These rivals have an upper-hand over Netflix as they already have an
established client base and offer local-language programming. Many customers do not want to
pay for an additional streaming service, would experience switching costs, and have high brand
loyalty (Scott and Peltier). Netflix could change all of this if they offered shows in the local
languages of the countries they are expanding into.
Strategic Recommendations
Business-Level Strategy
As touched on in the previous section, one of Netflixs main strengths is the fact that their
technology has allowed them to create value innovation. Netflixs ability to offer instant access
to movies and television shows using the internet has revolutionized the industry. Additionally,
the Netflix original series have created even more demand for their services. One of the main
reasons Netflix has had so much success is because they are able to offer their services for only
$7.99 a month, which is a fraction of the cost of a monthly cable subscription. With all of these
factors in play, it would be best for Netflix to pursue a best-cost strategy. Focusing on a best-cost
strategy has the potential to increase Netflixs market share as Netflix is able to offer the best of
both worlds with superior value and low costs. If Netflix can convince international consumers
that their services are superior in value like they have here in the United States, then they will be
able to implement a best-cost strategy overseas as well and increase their competitive advantage
over competitors.
Corporate-Level Strategy
The nature of the industry Netflix is in combined with their business model allows for little
diversification to be done by the firm. However, recently they began to diversify internally by
creating Netflix original series which have become incredibly popular with viewers. These series
have created demand for Netflixs services as viewers do not want to miss out on these extremely
well received series. While Netflix has had success with this in the U.S. market, they now need
to expand their global business in order to maintain growth as growth in the U.S. is slowing. Up
to this point the Netflix original series have targeted the U.S. market. It would be a worthwhile
investment for Netflix to create original series that target large international markets where they
are struggling to gain viewership. This would help create demand for their services
internationally and help them compete with other streaming services in international markets
who currently have higher brand loyalty than Netflix. As far as competing with U.S. competitors,
it could be useful for Netflix to seek a strategic alliance with film companies. Many competitors
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have rose up in the streaming services market in recent years. If Netflix had exclusive rights to
be the only streaming service provider to stream popular films, then they would have a
significant competitive advantage over competitors in the industry.
Implementation Plan
Knowing that Netflix has reached a point that they don't see farther growth in the United States
they need to seek global markets in order to maintain competitive advantage. They must make
their services available to people in all countries. This has its obstacles but with careful
implementation has its opportunities. There are 3 simple options that Netflix must weigh to
decide which makes the most sense financially.
Option 1: Continue similar business practices on a global scale. Continue best-cost.
Option 2: Develop new avenues of live broadcasting and news services.
Option 3: Create original series for every region. Creating global partners.
The best option for Netflix is to choose Option 3. If Netflix does decide to use Option 3 and
work with global partners it would take a considerable amount of communication and planning
in order to maintain the same image and service that Netflix already provides. The Pro to
Option 3 is that it would allow localization of the shows as well being able to better place the
company. Option 3 also has the least amount of obstacles.
Potential Obstacles
Like mentioned above Netflix will face a few large obstacles when they seek to expand
internationally. They will have to overcome the challenge that cable and satellite present with
their larger licensing rights and greater selection of entertainment. Netflix might also consider
looking into being able to offer live programming. This could include news broadcasting, sports,
and talk shows. Lastly it might become difficult for Netflix to provide high quality original series
across the world. It would require each country or region to have a department in which they
produce series under Netflix authority. Netflix must also consider their corporate, business, and
functional levels when considering implementation.
Corporate Level
Implementation of this plan will require support from all areas of upper level management.
Motivation and energy is what will make Netflix competitive globally and will help to drive
innovation.
Business Level
At this level it will be crucial for Netflix to stand out above its competition. This means that
Netflix will have to show how their services are superior and why people should choose them
over another video streaming service.
Functional Level
One great way for Netflix to be successful in this area is to establish output goals. They must be
appropriate and measurable. This will allow the firm to see its progress and allow its developers
to create new goals.
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Conclusion
Netflix has had great success in the national market and is working on expanding into emerging
markets and becoming a MNC. The international strategy that they use will not only affect the
success of their international business, but also their business here at home. Netflix will need to
be aware of cultural differences and the strategies of existing companies in the industry.
Following our recommendations and implementation plan will help Netflix become the leader
within their industry internationally.
Success could be found in partnering with film producers across the world that would help
Netflix create original shows that are culturally relevant. This relevancy will give Netflix the
leading edge against global competitors and allow them to continue to make profits outside the
United States.

Bibliography
Introduction
TechCrunch. Netflix. Retrieved August 5, 2014.

External Analysis
Association, National Cable and Telecommunications. NCTA: Industry Data. 13 April 2015.
Study Report. 18 October 2015. <https://www.ncta.com/industry-data>.
Ciciora, Walter S. Ph.D. Technical Briefing Overview. Louisville: Cable Television Laboratories,
Inc., 1995. Document.
<http://people.seas.harvard.edu/~jones/cscie129/nu_lectures/lecture13/pdf/CATV.pdf>.
Enteratinment Software Rating Board. ESRB: Video Game Industry Statistics. 21 January 2010.
Study Report. 19 October 2015. <http://www.esrb.org/about/video-game-industrystatistics.aspx>.
Liew, Nils C. Van. Educational Articles: Value Line. 1 August 2014. Internet Article. 19 October
2015.<http://www.valueline.com/Stocks/Industries/Industry_Analysis__Cable_TV.aspx#.ViVLnf
mrShf>.
Mannino, Naomi. Mainstreet: How to watch TV without paying a cable or satellite tv bill. 22
August 2014. Article. 19 October 2015. <https://www.mainstreet.com/article/how-watch-tvwithout-paying-cable-or-satellite-tv-bill>.
Merced, Michael J. De La and David Gelles. Dealbook: AT&T to buy DirecTV for $48.5 Billion
in Move to Expand Clout. 18 May 2014. News Article. 19 October 2015.
<http://dealbook.nytimes.com/2014/05/18/att-to-buy-directv-for-48-5-billion/>.
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SBCA. Satellite vs Cable: Satellite Broadcasting & Commnications Association. 10 January

1999. Website/Webpage. 19 October 2015. <http://www.sbca.com/access-tv/cable-satellite.htm>.
YouTube. YouTube: Press Statistics. 1 March 2014. Statistics Report. 19 October 2015.
<https://www.youtube.com/yt/press/statistics.html>.

Internal Analysis
Erica Olsen, Internal & External Analysis, May 04, 2010, retrieved Oct 22, 2015 from
http://onstrategyhq.com/resources/internal-and-external-analysis/
Matthew Curtis, Reed Hastings: Leader of the Pack (Netflix), February 12, 2011, Page 10
Alex Cho, Netflix: International Expansion to Drive Long Term Growth, Sep 17, 2014, retrieved
Oct 22, 2015 from http://amigobulls.com/articles/netflix-international-expansion-to-drive-longterm-growth
Netflix, Wikipedia, n.d, retrieved Oct 22, 2015 from
https://en.wikipedia.org/wiki/Netflix#Device_support

Strategic Opportunities
"Committed to Connecting the World." ITU Releases 2014 ICT Figures. ITU, n.d. Web. 30 Nov.
2015.
Luckerson, Victor. "Netflix Has a Plan to Take over the World." Fortune. 17 Sept. 2014. Web. 23
Oct. 2015.
Scott, Mark, and Elian Peltier. "Netflix Faces Challengers in Its Push to Expand Globally." The
New York Times. The New York Times, 18 Oct. 2015. Web. 30 Nov. 2015.
Steel, Emily. "Netflix Accelerates Ambitious Global Expansion as U.S. Growth Slows." The
New York Times. The New York Times, 20 Jan. 2015. Web. 23 Oct. 2015.

Strategic Recommendations
Mui, Chunka. "How Netflix Innovates and Wins." Forbes.com. 17 Mar. 2011. Web. 7 Dec. 2015.

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Appendices
Appendix 1 for Internal

Appendix 2 for Internal

Appendix for Strategic Challenges

Internal

Helpful

Harmful

Strengths

Streaming is accessible and easy

Weaknesses

Necessary to negotiate individual rights

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External

through app

Strong word of mouth advertising

Cheaper online streaming service

Strong brand recognition

Original movies and tv series

agreements

No success in raising subscription

prices

Low switching costs

High start-up cost

Opportunities

Create original tv series and movies

Expand internationally

Threats

Cable and satellite services

Lack of broadband speeds

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