Reed Hastings vision for Netflix was an ingenious idea and evidently was a much desired product and service. Who would have ever thought a $40 late fee would have turned into a company worth $28 billion (LaMonica, 2014). Initially, Netflix competed with video stores such as Hollywood Video and Blockbuster but that soon changed as customers craved stream on demand (Parnell, 2015).
There are three perspectives on strategy which are industrial organization, resource based theory, and contingency theory. Notably, the industrial organization perspective relies on external factors and places emphasis on the environment in the industry (Bethel, 2015). Clearly, the list of competitors in the television and video store industry is expansive, but Netflix has creatively engaged their target consumers. What does industry mean? Basically, industry is any business who targets consumers with similar or competing products or services (Parnell, 2015).
From an internal analysis perspective, Netflix has several strengths, which are: strong, knowledgeable, and dedicated leadership a corporate culture that nurtures creativity, innovation, accountability, and ownership key partnerships with companies like Roku, Microsoft, TIVO, Vizio, LG Electronics, Panasonic, Samsung, Google TV, and Apple add to depth accessibility brand recognition due to cooperation with …show more content…
In fact, Netflix has spent millions on episodes of popular shows, which could lead to bidding wars in the future. However, cash flow has been an issue at Netflix and continues to grow, so the question is can they increase revenues enough to surpass their expenses? When evaluating their financials, it is important to note the trade valuation of their stock, which is 145 times earnings (Moskowitz, 2015). Currently, the only saving grace is that direct competitors cannot compete with the quality and price that Netflix
There are three perspectives on strategy which are industrial organization, resource based theory, and contingency theory. Notably, the industrial organization perspective relies on external factors and places emphasis on the environment in the industry (Bethel, 2015). Clearly, the list of competitors in the television and video store industry is expansive, but Netflix has creatively engaged their target consumers. What does industry mean? Basically, industry is any business who targets consumers with similar or competing products or services (Parnell, 2015).
From an internal analysis perspective, Netflix has several strengths, which are: strong, knowledgeable, and dedicated leadership a corporate culture that nurtures creativity, innovation, accountability, and ownership key partnerships with companies like Roku, Microsoft, TIVO, Vizio, LG Electronics, Panasonic, Samsung, Google TV, and Apple add to depth accessibility brand recognition due to cooperation with …show more content…
In fact, Netflix has spent millions on episodes of popular shows, which could lead to bidding wars in the future. However, cash flow has been an issue at Netflix and continues to grow, so the question is can they increase revenues enough to surpass their expenses? When evaluating their financials, it is important to note the trade valuation of their stock, which is 145 times earnings (Moskowitz, 2015). Currently, the only saving grace is that direct competitors cannot compete with the quality and price that Netflix