Netflix Business Strategy

Integrated Marketing Communications

Term Paper 2015

NETFLIX Inc.

David Thiar 799069

Nathaniel Zanzouri 799550

Tivi Saada 800402

Rony Dahan

Netflix was founded in 1997 in Scott Valley California by Marc Randolph and Reed Hastings, who previously had worked together at Pure Software.

Netflix  is an American provider of on demand Internet streaming media available  in many countries and flat rate DVD-by-mail in the United States, where mailed DVDs are sent via permit reply mail. Online streaming service and DVD delivery service are the two main two main product lines for Netflix. Netflix core product is a service. This marketing will focus on online streaming service.

Their strategy and implementation is comprised of becoming the best global entertainment distribution service, licensing entertainment content around the world, creating markets that are accessible to filmmakers and helping content creators around the world to find a global audience. The firm has grown to acquire more than 30 million members that expand beyond the United States and into Canada, Latin America, the United Kingdom, Ireland and the Nordic countries. The online-only platform is accessed exclusively through subscription-based members.

Netflix management Founder and CEO Reed Hastings has created a unique management style that is most  similar to that of George Clooney’s Danny Ocean role; that is, a leader who hires the best, and gets out of the way. Netflix has a structure that allows employees to make their own decisions, but greatly encourages that smart decisions are made. Some of the perks include allowing employees to structure their own compensation packages, no clothing policies, and having a—hypothetical—unlimited amount of vacation days. Hastings understood that valuable employees are happy employees. And finally, regarding expensing, entertainment, gifts and travel, simply “act in Netflix’s best interest” (Siegler). By creating an ideal workspace to provide a highly productive environment, excellence in work quality is expected. In the case that employees do not live up to this high standard, Netflix provides large severance packages for quick termination.

Netflix customers are divided into two sections: traditional DVD delivery and online streaming customers. Traditional consumers are particular and selective. They have a specific title or genre they are looking for and they desire a rich viewing experience, which currently makes them more likely to consume hardcopy media. This customers opt for Netflix mail-delivery services as well as more differentiated online subscription plans. Online streaming consumers are not as selective as the latests. They watch videos when they can. They value easy and immediate access, portability and transferability of the product, and are more than willing to watch video on their computers or other devices like computer tablets and even smart phones. This consumer has a higher propensity to substitute than the DVD rental customer. They are also typically younger, and more Internet users. These customers often opt for affordable monthly online subscription plans.

Regarding Netflix strength Netflix has the First Mover Advantage into the movies and TV shows instant streaming which gives its brand higher recognition compare to other competitors. Netflix brand has Strong Brand Recognition and winning Emmy awards with its House of cards show, Emmys best the Personalized Recommendation Engines for Video Discovery award and many others making it the strongest brand in the industry.

With the personalized recommendation system and a large selection of content Netflix has managed to get high Customer Satisfaction

Netflix has the ability to adopt to various platforms like TVs, game consoles, smart phones, tables and computers as well as flexibility to different internet speeds which other competitors like Amazon do not have • Production of original content has increased Netflix brand equity, customer loyalty and revenues for example House of cards and orange is the new black.

A huge database of customer data and a good system for analyzing the data enabling them to have more accurate predictions and recommender system.

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In 1997 netflix created a service of DVD location, however Only a couple of the website organizations that have attempted to startup have made it past the starting stages. The film and excitement industry is continually developing which makes it considerably harder for a motion picture based website business to thrive. Effortlessly it takes to go to Wal-Mart or Blockbuster to lease or purchase a film, the online motion picture business has been compelled to create programming and innovation that makes it less demanding to lease films. Online motion picture rental organizations need to adjust to the way that individuals may have the capacity to download films onto their TVs or PCs as opposed to leasing.