Essay about Netflix in 2012: Can It Recover from Its Strategy Missteps?

3258 Words Mar 8th, 2016 14 Pages
Netflix in 2012: Can It Recover from Its Strategy Missteps?

Company Overview:
Netflix Corporation was established in 1997 by the current CEO, Reed Hastings alongside software executive, Mark Randolph. They are the world’s leading internet television network with over 57 million members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series, documentaries and feature films. Members can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen. Additionally members can play, pause and resume watching, all without commercials or commitments.

The company was originally only a DVD--by--mail service in which the customer paid for a certain level
…show more content…
* Expand Internationally.
Netflix chose to outcompete rivals on the basis of differentiation by offering a wider product selection, value--added services and attractive styling. They also utilize technological superiority by continuing to enter each new technology market as they are made available.
Netflix offered unlimited viewing of movies and TV episodes streamed over the internet and also offered unlimited number of DVDs each month, delivered and returned by mail with one title out at a time for $9.99. In home movie viewers found the unlimited streaming for $7.99 by Netflix as an attractive option. The company reached a leadership position in 2012 with over 23 million streaming subscribers. Those who wanted DVD by mail had the option of selecting one or more movie titles from a library of more than 120,000 titles. The streaming option allowed instant watching service with instant watching capabilities for a large number of titles. By 2011, Netflix had a total of 21.7 million streaming subscribers. Netflix grew because its subscribers were drawn to try Netflix's online movie rental service.
Reed Hastings and his team got some important things wrong in changing the Netflix strategy, but they also got a great deal right. Here is scorecard:
The business split. They got this right. The natural boundaries between the physical (mail) and virtual (streaming) markets for pre-recorded movies are increasingly sharp, especially as the streaming market

Related Documents