Netflix has several internal strengths that provide benefits to its customers and competitive advantages, such as its valuable services, growing subscription base, and user-friendly interface. However, it also faces threats such as intense competition in the market from companies like YouTube, and pressure to retain high customer expectations. Externally, opportunities exist in the growing digital media market and weakening dollar, but threats include competition from free ad-based services and restrictions on releasing new content.
Netflix has several internal strengths that provide benefits to its customers and competitive advantages, such as its valuable services, growing subscription base, and user-friendly interface. However, it also faces threats such as intense competition in the market from companies like YouTube, and pressure to retain high customer expectations. Externally, opportunities exist in the growing digital media market and weakening dollar, but threats include competition from free ad-based services and restrictions on releasing new content.
Netflix has several internal strengths that provide benefits to its customers and competitive advantages, such as its valuable services, growing subscription base, and user-friendly interface. However, it also faces threats such as intense competition in the market from companies like YouTube, and pressure to retain high customer expectations. Externally, opportunities exist in the growing digital media market and weakening dollar, but threats include competition from free ad-based services and restrictions on releasing new content.
Sl. No Opportunities Score Netflix provides value-added 1. 0.02 2 0.04 services to its loyal customers The subscription base of Netflix has 2. 0.15 3 0.45 been expanding tremendously. It provides customized video 3. 0.02 3 0.06 recommendation service. Netflix has been building its brand 4. 0.09 3 0.27 loyalty It provides user-friendly web 5. 0.01 3 0.03 interface to its customers It maintains low subscriber 6. 0.05 3 0.15 acquisition costs It creates incentives for its loyal 7. 0.02 2 0.04 customers The company has a potential for vast 8. 0.09 2 0.18 market penetration If possible, the company provides 9. 0.03 1 0.03 vertical integration with the studio Threats Netflix has to retain the expectations 10. 0.15 3 0.45 of its subscribers There is an immense competition in 11. 0.05 3 0.15 the market to attract new subscribers 12. Broadcasting subscribers 0.02 2 0.04 13. Cloud control 0.20 3 0.60 14. Licensing 0.03 2 0.06 15. Studio power over DVD releases 0.03 2 0.06 16. Distribution 0.02 2 0.04 17. Internet sites 0.02 2 0.04 Total 1.0 2.69 External Factor Evaluation (EFE) Matrix
Weight Rating Weighted
Sl. No Opportunities Score Over 150 million people in the 1. 0.08 3 0.24 United States watch online videos. Over 50% of the spending of the 2. international market is in the filmed 0.07 2 0.14 entertainment of the US. The digital distribution of the media 3. 0.06 3 0.18 has been growing tremendously The weak price of US dollar makes 4. Netflix attractive for international 0.03 2 0.06 market The rivals like Blockbusters have 5. been facing issues with their business 0.04 4 0.16 models The consumers are seen to spend 6. over $20 billion on home video 0.05 3 0.15 purchase It creates incentives for its loyal 7. 0.03 2 0.06 customers The service provided by Netflix is 8. considered superior as compared to 0.04 4 0.16 its rivals A strong mail delivery position which lays foundation for a well 9. 0.02 1 0.02 position for Video on demand business There is a potential growth estimated 10. 0.05 2 0.1 in the Netflix subscription Threats Intense competition in the market is 11. 0.10 2 0.20 the biggest threat YouTube own more than 75% of the 12. market share in the multimedia 0.10 2 0.20 market The movies by Time Warner cable 13. 0.08 3 0.24 are in huge demand. Ad-based streamer and Hulu provide 14. 0.04 2 0.08 free TV shows and movies Legally, Netflix is not allowed to 15. release new DVDs until 28 days of 0.03 3 0.09 their retail release 16. Netflix has various complaints 0.03 4 0.12 regarding collusion with Wal-Mart and Amazon Low barriers to entry will lead to increase in the number of start-ups 17. 0.05 3 0.15 (which provide the same services at low cost) High cost in attaining original 18. 0.04 4 0.16 content rights Infringements in the environmental 19. policies and has been ranked ‘D’ in 0.03 2 0.06 environmental awareness Content rights expires in a year and 20. the same content can be shown other 0.03 2 0.06 platforms Total 1.0 2.57
Example 1 Illustration of 5-Step Model (Telecom Contract) Example 2 Contract Modification Example 3 Explicit vs. Implicit Performance Obligations Example 5 Variable Consideration With Contingency