Netflix, Inc. provides on-demand internet streaming media to United Kingdom, Denmark, Sweden, Norway Ireland, and both South and North America. The company offers flat-rate DVD by mail within the United States of America (Stahi and Yager 23). Netflix sends mailed DVDs through Permit Reply Mail. The company has developed strategies for growth and counteract threats and weaknesses while maximizing on its strengths.
- I recommend that Netflix should partner and network with other hardware and software providers.
- These include Windows or Mac OS X, Amazon Kindle Fire, Apple TV, LG Electronics and Philips manufacturers. This is because Netflix subscribers watch movies using various hardware and software (New Word City 12).
- This will help the company to overcome the weakness of incompatibility and maximize on the company’s rapidly increasing number of subscribers.
- Netflix should consider universalizing its IP address. The selection of the company’s titles is contingent upon the user’s IP address, which corresponds to the user’s physical location (Lusted 26). Universalising the IP address will enable users to see items available items to all parts of the world instead of limiting access to regional boundaries.
- The financial managers should collaborate with logistics personnel and avoid unnecessary growth. Reports from the company’s financial statements show that Netflix is growing at a high rate, primarily financed by debt (New Word City 19). This exposes the company to chances of running into a financial crisis and restricts growth, or even lead to closing down of the company.
- Netflix’s price adjustment is currently challenged by competitors. The company increases prices of its products, but due to entry of competitors such as Coinstar and Verizon, I recommend Netflix should offer its products at fairly lower prices in order to retain customers and maintain its competitive advantage (Lusted 11).
I believe that Netflix has high chances of maintaining its competitive advantage. The company has to:
- Create network effects with hardware and software providers,
- Universalize its IP address,
- Avoid effecting growth using huge debts,
- Fix prices while considering the effects of competitors.
Works Cited
Stahi, Lesley, and Josh Yager. Netflix. New York: CBS Broadcasting Inc, 2006. Internet Resource.
New Word City. How Netflix Produces Happy Endings. Upper Saddle River, N.J: FTPress, 2010. Internet resource.
Lusted, Marcia A. Netflix: The Company and Its Founders. Minneapolis, MN: ABDO Pub, 2013. Print.
