Netflix SWOT
Strengths:
Convenience: I believe Netflix’s biggest strength is that it provides their consumers with easy access and can be viewed on multiple devices (TV’s, computers, mobile devices, game consoles, etc…), that has internet connections. When I say “easy access”, I mean that the costumers can turn on that device, scroll through all their options, watch it whenever they can, and then the best part is, they do not have to return the rental the next day or worry about late fees.
Wide geographic coverage and/or strong global distribution capability: In 2010, Netflix decided that they wanted to expand their business. Not only do they offer their service here in the United States, Canada, United Kingdom, and Ireland, but they also promoted their business in 43 countries in Latin America, Mexico, and the Caribbean. They also promote their business in different languages and they include; English, Spanish, and Portuguese. This made Netflix obtain more consumers.
Weaknesses:
No clear strategic vision: One of Netflix’s main weakness I believed was that they did not have a picture clear strategic vision considering with-in two years they kept trying to change their prices and their plans that they were offering that simply did not work. I believe that the main reason why it failed was because they offered these services at the wrong time. During the month of July in the year 2011, Netflix announced a new pricing plan for all their customers (existing and retaining). This new price was going to raise customer’s monthly fee approximately 60% ($7.99) for either mailing or streaming. If their customers wanted to enjoy both Netflix by mail and streaming, they would have to pay $15.98 per month. This was really bad timing for Netflix considering their existing customers were already happy with the low prices and of course they would be outrage if the prices rose considering they can easily cancel their Netflix membership without a hassle and switch to another company. They also wanted to change the many services that they once provided on one site and one account to multiple accounts and sites for different services. For example: if the customers wanted their rentals through the mail, they would have to use a different account and go on the qwikster website. This made existing customers furious since a one stop site turned into a confusion mess.
Too narrow a product line relative to rivals and resources that could be readily copied: With my prior experience to Netflix, I noticed that within my one month trial period, they did not have a lot of movies and TV series that I wanted to watch. I know that if I am going to pay $7.99 a month, I would want a large variety. With this being said, I can purchase Hulu premium for the same price and get a larger variety. This shows that Netflix can easily be copied by other companies which make for a weak business.
Opportunities:
Expand into new geographic markets: As mentioned as one of Netflix’s strength, one of their opportunities is to expand more in the international market. I say that the next international market they should pursue is Asia. Although Netflix would have to pay for licenses and advertising, they should expect their profit to be lower in the short run but, they would make a bigger profit in the long run.
Broader range of products: If Netflix wants to “out win” their competition, they should start with expanding their rentals they offer. Even though they have 55,000 options, consumers can only get 30,000 if they are streaming. Netflix should think about making all 55,000 rentals available for both streaming and mailing. They should also consider lowering their monthly fee and start providing their loyal customers with perks. For example; maybe they can give them a free month rental every year they stay members with them.
Threats:
Increasing intensity of competition among industry rivals: Netflix has two main competitors that they should watch out