Netflix Case Study: Netflix

3518 Words 15 Pages
Register to read the introduction… As many are losing their jobs, they are cutting their costs. Things that are not found to be a necessity are the first to go – such as entertainment. The movie rental industry requires entrants to have large capitals due to movie and copyrights. As long as movies are being made, this industry will continue to strive. Netflix has the opportunity to expand its reach. They are able to cut many expenses out due to not having physical locations and a small staff to maintain efficiency. Netflix depends wholly on their suppliers and movie rights. The movie industry is small and expensive. If Netflix is in violation with their suppliers, it would weaken brand and cause many problems. The introduction of rentals via mail, they captured many of Blockbusters sales. Netflix also introduced the idea of “No Late Fees,” renters were allowed to keep the DVD for as long as they like. 6. What is your appraisal of Netflix’s operating and financial performance based on the data in case Exhibits 2, 3, and 4? What positives and negatives do you see in Netflix’s performance? Use the financial ratios in the Appendix of the text as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Netflix’s recent financial …show more content…
* Stocks large number of new releases. * Physical stores, employees can speak to customers and entice them, allow them to sell a product to the customers. * Offers several products from movies to games, TV shows, drinks to junk food, game consoles and movie memorabilia’s * Great online database for movies, if not available online, they can help locate the DVD at a local store. * Over 1,000 international stores open in 2007. * Strong distribution system. | * Large liabilities due to having physical stores and inventories. * Slow to innovate into online plans and services * Inconsistent with changes proposed some store revoke and did not follow the “No late fees” policy. * Took many years to convert to online DVD mailing program. Realized large losses before they took any action. …show more content…
– Blockbuster already has stores outside of the country * Expand their online media library. * Can enter into foreign markets. There are many other countries that do not have a movie rental industry. Combine the market and globalize it. The U.S. is a growing and diversified country. | * Netflix – Blockbusters biggest competitor. * Lack of innovation. * A slowing economy – if many people are losing their jobs, they will cut out unnecessary expenses, such as entertainment. * Entrants that can steal subscribers. * Cable’s Pay-Per-View. * Internet streaming website that offer free but illegal viewing of movies or pirating.

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