Netflix Powerpoint Slide
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Transcript Netflix Powerpoint Slide
Analysis of Netflix
presented by Vince Wang
1
Agenda
Introduction
What is Netflix?
How Netflix Works?
How Much Does Netflix Cost?
Comparing Netflix to its Competitors
Role of IT at Netflix
Porter’s Competitive Forces Model
2
Agenda (continue)
Advantage of Internet
CRM (Customer Relations Management) Strategy in
Netflix
SWOT Analysis
Netflix Strengths
Netflix Weakness
Netflix Opportunities
Netflix Threats
Conclusion
Financial Status
The Future of Netflix
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What is Netflix?
Founded in 1997 at Scotts Valley, CA
Founder of Netflix: CEO Reed Hastings pioneered the
subscription movies-by-mail model from his own
personal frustrations
Largest online DVD movie rental service
3 million members
40,000 movie titles
CEO predicts that Netflix will boast five million
subscribers and one billion in annual revenue by 2007
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How Netflix Works?
•Receive selection of DVD’s from customers
•Process DVD’s at one of 30 shipping centers
•Send DVD’s straight to customers within one-day
•Return DVD’s in one of Pre-Paid Mailer
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How Much Does Netflix Cost?
Plan
3 DVDs
at-a-time
Rental/
Month
Price /
Month
Free
Trial
Length
Unlimited
$17.99
2 Week
Free Trial
Per month
2 DVDs
at-a-time
$14.99
Unlimited
Per month
2 DVDs
at-a-time
Limit 4
per month
$11.99
Per month
2 Week
Free Trial
2 Week
Free Trial
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Comparing Netflix to its Competitors
Netflix
Wal-Mart
Blockbuster
Movie Selection
●●●●●
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Subscription
Plan Selection
●●●●○
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Movie Search
Interface
●●●●●
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Movie
Availability
●●●●●
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Speed Of
Delivery
●●●●●
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●●●○○
●●●●● best
Statistics from: http://www.online-dvd-rental-reviews.com
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Porter’s Competitive Forces Model
Low Cost
Differentiation
Innovation
Develop Alliances
Promote Growth
8
Speedy Delivery
9
Netflix CRM Strategies
Customers can access services through the
web site
Communication and feedbacks from
Netflix’s customers
Customer service center is open seven days
a week
Phone support
Netflix Affiliates Program
10
Netflix Strengths
Subscription style e-commerce service
Unlimited access to world’s largest DVD
library
No lineups and no late fees
Excellent customer service
Easy website navigation
Preview movie before renting
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Netflix Weakness
Customers slowly adapt to change from
movies-by-mail model
High quality in customer service is not
easily achievable
12
Netflix Opportunities
Cross promotion program
Promotional
relationship with Amazon.com
Allow customers to download movies
Extend into video games rental business
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Netflix Threats
Strong competitive market with other
movie rental stores such as Blockbuster,
Wal-Mart and Comcast Pay-per-view
Older or newer media formats are not
supported currently
Lower price and promotions of
competitors
Cost of postal service
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Financial Status
Revenue up 86% from $272.2 million in
2003 to $506.2 million in 2004
Subscribers rose from 1,487,000 in 2003
to 2,610,000 in 2004
After Blockbuster and Wal-Mart went into
the market in 2004, growth rate dropped
from 77% to 2%
Failure to expand to UK with a net-loss of
$3 million
15
Conclusion
Netflix
is at its maturity
Expanding and growing slower
than before
Loss in revenues from competition
The diminishing future of Netflix
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