09 Task Performance 1 (Final)

Company Research

Netflix, Inc.

Submitted by:

Alejandro, Rachel B.

Bernardino, Ariel Ace C.

Submitted to:

Mr. Eduard Cruz

Netflix, Inc.

I. Company Background
a. Current Performance. It must include the present condition of the company in terms of its
operation and financial standing within the given industry.

In over 190 countries all over the world together with 208 million paid memberships in
all those 190 countries who are enjoying the services of the Netflix such as TV series,
documentaries and feature films that has a wide variety of genres and languages, Netflix is
considered as being one of the world’s leading entertainment services.

b. Strategic Posture. It must include current mission, vision, objectives, and policies of the
organization.
 “To entertain the world” is the Netflix’s corporate mission. This mission is related to
their company’s nature which is to provide in-demand movies, series, documentation on their
streaming services. While their corporate vision is “To continue being one of the leading firms of
the internet entertainment era.” And that vision leads to continuing the leadership they
established, provide in-demand movies on the internet, and continue providing entertainment.
Their goals are becoming the best global entertainment distribution service, licensing
entertainment contents, and creating markets that are accessible to the filmmakers. Their
policies include the membership fee, promotional offers, billing, and cancellation.

II. External Environment

a. Porter’s five forces. It must discuss the competitive strength and position of the business
organization.
 Competitive Rivalry: Strong Force
 Threat of new entrants: Moderate Force
 Threat of substitute products: Weak Force
 Bargaining power of buyers: Strong Force
 Bargaining power of suppliers: Strong Force
III. Internal Environment
a. It must discuss the firm’s resources, capabilities, and competencies on key business functions like
marketing, finance, and operations.

Within the internal organization, the Netflix are making their decisions effectively, and
through that, they create value for their customers. It is important for them to understand the
competitive advantages and strategic competencies of the organization. And they may
understand those with the help of Netflix resources, capabilities, core competencies and value
chain analysis.

IV. Corporate Level Strategies

a. It must discuss directional strategies such as growth, stability, and retrenchment employed by
the firm.

Netflix started on the year 1977 by just being a movie rental service who ships DVDs to
the customers through mail. By the year 2001, the Netflix gained fewer than half a million
subscribers. But in the present, it has 208 million paid subscribers all over the world. Their focus
is all about TV series, documentaries and feature films that has a wide variety of genres and
languages. With the help of providing in-demand TV series, movies, and documentaries, it helps
them to become stable and grow more and more each year.

V. Analysis of Strategic Factors

a. SWOT Analysis. It must present an evaluation of the company’s competitive position.

Their strength is the internet itself because the internet is the main platform of their
business. Being able to provide those in-demand TV series, movies, documentaries, and films
together with a high quality of service helps them to establish their company. While some of the
 weaknesses of the Netflix company is that they do not own most of its content. While the
opportunities they have is they can control the pricing for subscriptions, and they may put
advertisements. And lastly, the threats they may encounter are the competitive pressure and
government regulations.

VI. Strategic Alternatives and Recommended Strategy

a. It must present three (3) proposed directional strategies for the firm undergrowth, stability, and
retrenchment collectively. Each strategic alternative must be presented with its corresponding
advantages and disadvantages

Strategic Alternatives

Growth Strategies

1. Vertical Growth- They should make more of their own Netflix TV series, movies, and
documentations.

Advantages:
1. They can consider it as their own.
2. More and more people will look up and avail themselves of their subscription
services.
3. Owning rights and distributing direct to viewers.
Disadvantages:
1. Market is unpredictable, we will never know when will the market will still be
stable with Netflix.
2. Netflix could pursue multiple options to remain viable in the industry.
3. By collaborating with the partners this would decrease cost to Netflix and
increase revenues.

2. Horizontal Growth- The company was founded in 1997, and its main idea is a subscription-based
video streaming service.

Advantages:
1. Netflix can ensure that it becomes the primary source of online streaming
media.
2. Netflix can perhaps offer a free month’s trial for buyers of these systems as
a way of attracting new subscribers.
3. Ability to stream on up to two devices simultaneously under a single username
or password.
Disadvantages:
1. Netflix remains primarily a content aggregator and distributor.
2. Netflix’s catalog has come to be seen by some as outdated and inconsistent.
3. They need a lot of people to make that work.
 3. Forward Integration- The company started as a DVD rental business before moving to online
streaming of licensed movies and films from major studios. It also describes the potential risks of
vertical integration.

Advantages:
1. Having now successfully implemented its scaling-up strategy in the online
space.
2. Moving into online streaming of films and movies licensed from major studios.
3. It is a prime example of vertical integration.
Disadvantages:
1. Opening new revenue streams such as content licensing or even a branded
channel with traditional distributors.
2. It can be very costly.
3. There may be management difficulties.

Stability Strategies

1. Pause/Proceed with Caution Strategy- Is a deliberate action taken by the firm to

postpone the strategic action till the best opportunity knocks at the door.

Advantages:
1. You can download its app in mobile phones as well and all you need is a
subscription to get started.
2. Netflix allows users to cache content in standard and high quality.
3. Netflix allows user to share account to another device.
Disadvantages:
1. Netflix adding cost to your account how many devices your avail.
2. Netflix is very strictly in payment your Netflix can`t use.
3. Netflix will not allow recording their movies.

2. No Change Strategy-

Advantages:
1. People have been using Netflix for quite a while now and they do like the part
of it that it’s convenient to watch whenever u like and wherever you are. So
having a change is not necessary or it still depends on the people.
2. Netflix offers three different subscriptions plans to the audience who then pay
monthly membership fees to continue enjoying the service.
3. Netflix allows simultaneous viewership in its most popular standard plan as
well as the premium plan.
 Disadvantages:
1. People might subscribe to another type of streaming application/website.
2. People was shared bad news about of streaming application /website.
3. The worst is they company will fall.

3. Profit Strategy- They will do nothing and act that the problem they are experiencing is just
temporary.

Advantages:
1. They will not use any resources because they will just do nothing.
2. Nothing too busy and work.
3. Nothing too much to do and no cost to happen.
Disadvantages:
1. It may worsen the situation or the problem.
2. Many customers will be annoyed or disappointed.
3. People don’t pay much attention to what’s wrong and think the problem is
just normal.

Retrenchment Strategies

1. Turnaround strategy- It will just improve your operational efficiency because you know that the
situation is not that critical.

Advantages:
1. They can change their business model and make changes to their prices as
they can attract more subscribers to generate more revenue.
2. Netflix provides the best binge-watching experience.
3. It can quickly download it from your app store.
Disadvantages:
1. Don’t know when it will become critical.
2. This will affect the company as they need to lower their subscription prices
and make changes to it.
3. It requires an internet connection.

2. Captive Company Strategy- The company tries to encourage each individual viewer to establish
his or her own profile. Instead of defending an obsolete demand-and-supply business model,
Netflix prefers to feed into its recommendation engine the most usage statistics possible in a
deliberate effort to optimize enjoyment and customer retention.

Advantages:
1. the company’s strategic position as a leading competitor in the on-demand
digital content streaming industry.
 2. It focuses on movies and series, and the production of original content.
3. Business operates in providing streaming services.
Disadvantages:
1. There are clearly new risks as Netflix has gone against the grain with the
business model it has adopted for its original content.
2. Netflix has growing operational risks from the rising costs for content and
increased competition in the streaming content
3. Netflix is taking a huge risk by investing heavily in unspecified waters, a risk
they expect to lead to another quarter of significant subscriber growth and
higher stock prices.

3. Sell-out- In the short term, we think Netflix has an international distribution leader that will be
able to protect its market leadership for the next few years.

Advantages:
1. It can create a list of your favorite movies and shows, and you also get to
explore new content.
2. Its library is also pretty much outdated.
3. It offers a whole month of the free trial,
Disadvantages:
1. Need is a stable internet connection, and you can start binging your favorite
series.
2. Simply must wait for a while until the new content becomes available.
3. Monthly load required.

Recommended Strategy

Vertical Growth Strategy

Netflix already provides Domestic and International subscription streaming. Netflix is

available for streaming in over 190 countries which means they have expanded and there is no
need to use the Horizontal Strategy. All they must do is improve or add something unique to
their services.

No-Change Strategy

The company has become successful these days because of technology, and it has
become popular because streaming is now more convenient than going out to spend huge
amounts on a big screen (cinema). So, the no change method is most appropriate because of
their success these days.

Turnaround Strategy

This will be the strategy to use when the company is experiencing issues or problems.
The company’s business model has been incredibly successful in recent years, but it may have
 limitations. Once Netflix reaches market saturation - and it may be close to that point now - its
only growth lever will be subscription prices. That, too, will have limitations because consumers
tend to be price sensitive, especially when they have multiple options, as they already do with
streaming. If Netflix wants to continue to grow revenues and profits from it, it may need to
change its business model.

VII. Management Lessons Learned

a. It must discuss the takeaways from the research.

The lessons we have learned while doing this research is if you are just only starting your
business/company, don’t be greedy for a quick expansion, and don’t lose hope if you do not
success on the first try. If you failed on your first try, make, or innovate something that you
know the customers will patronage. Never ever lose hope. Just believe in yourself and your
capabilities. Trust everyone who you are working with.

VIII. Bibliography
a. This section must present all the references used in accomplishing the strategic management
paper. The entire paper must follow the official writing style of the American Psychological
Association (APA).

Company Profile. Netflix. (n.d.). https://ir.netflix.net/ir-overview/profile/default.aspx.

Rivera, A. (2019, November 10). Netflix's Mission Statement & Vision Statement: A
Strategic Analysis. Ran cord Society. https://www.rancord.org/netflix-corporate-vision-
statement-missionstatement-strategic-analysis.
Communicating Your Organization's Mission and Vision. Clear Company. (n.d.).
https://bestpractices.clearcompany.com/company-mission/index.html#:~:text=The%20vision
%20of%20Netflix%20is, that%20are%20accessible%20to%20filmmakers.
Wholley, M. (2020, November 2). 7 Workplace Collaboration Statistics and Advice. Talent
Management Blog by Clear Company. https://blog.clearcompany.com/7-workplace-
collaborationstatistics-that-will-have-you-knocking-down-cubicles.
"Netflix Resources and Capabilities" Essays and Research Papers. StudyMode. (n.d.).
https://www.studymode.com/subjects/netflix-resources-and-capabilities-page1.html.
Netflix Subscriber and Growth Statistics: How Many People Watch Netflix in 2021? Backlinko.
(2021, February 25). https://backlinko.com/netflix-users.