Netflex the New Trend

Table of Contents

Company Overview 4

Issues 5

Analysis

External Analysis

Dominant Economic Feature 8

Competitive Forces – Five Forces Model 10

Driving Forces 12

Key Success Factors 14

Competitor Analysis 15

Industry Attractiveness 21

Internal (Company) Analysis

Company Strategies 21

SWOT Analysis 23

Value Chain Analysis 29

Competitive Strength Assessment 30

Strategic Issues and Obstacles 31

Alternative Courses of Action for Success 31

Recommendations 31

Implementation 32

Works Cited 36

Appendices

Corporate Officers A

Online Movie Industry Market Share B

Renting Process Flow Chart C

Growth Rate Chart D

Rental Price Comparison E

Ratio Comparisons F

S.W.O.T. Analysis G

Weighted Competitive Strength Assessment H

Unweighted Competitive Strength Assessment I

Financial Analysis J

Return on Assets / Return on Equity K

COMPANY OVERVIEW

Reed Hastings founded Netflix in 1997. He noticed that there was a demand for the ability to rent movies. With a large

customer base he figured there was no question that his company could fail. This began the online movie rental industry to a

large scale. With one company becoming successful, it wouldn’t be but a matter of time before others began to catch on and

begin to reap the benefits of someone else’s idea.

Reed Hastings has already been a success for beginning new companies. He first made a name for himself by going public

with Pure Software in 1995 (netflix.com/PressRoom). After the development of this company he began to acquire several

other companies and made Pure Software one of the 50 largest public software companies in the world by 1997; this until

they sold to Rational Software in 1997. From there Hastings moved on to other projects.

The other project in mind was Netflix. Hastings and a few colleagues formed Netflix in 1997, as formerly stated. Which by

1999, they had over one million subscribers in only three and a half years. Since the beginning of Netflix in 1997, they have

battled