Netflix Can it Recover From Strategy Mistakes Harvard Case Solution & Analysis

Competitive rivalry (High)

The competition has shifted the trend of watching movies from disc towards online streaming expertise gained through the use of internet connectivity. Inthis Netflix major competitors are Hulu Plus and that are considered to be the giant in this industry. Strategy established by Hulu to cater a big chunk of the market is the low pricing scheme offered on the online video program.

apple tv case study solution

apple tv case study solution

Hulu offers the viewer with a monthly package of unlimited video streaming which includes more than 14500 previous episodes of the TV shows and high quality of more than 400 online movie shows. On the other hand, Amazon is also providing breath-taking offering that provides its new customer with the gift hamper of kindle and two days free shipping of videos. Amazon has also increased its online video streaming up to 17000 shows and with the start of 2012 it has reduced its streaming prices more than that of Netflix. However, Netflix offers online streaming, DVD by mail and Video on demand service to its customer on low market compatible prices. The competitive rivalry among these players is so high that the move taken by the competitor became another competitor’s strategic move and followed by more or less all player present in the market with slight different. For example, Netflix is providing video on Demand service in the market, while Amazon has also satisfying its customers by providing the same service named Instant Video Offerings.

Threat of Substitutes (low)

The threat of the substitutes is the medium in this industry because the user possesses so many T. Channels, cinemas, and theatrical options entertain themselves. However, when it comes the comfort of  having a source of entertainment anywhere on demand, then the people would be more inclined toward the source that entertain them with their desired shows anywhere and everywhere they want. However, the show business and theatrical alternatives exist everywhere in the most fragmented form that the entertainment seeker cannot possibly categorized all the options and selected them by their own. An online video was streaming and DVD mailing system has made it easy for the user to save time for searching for their desired shows. Netflix’s current contributions towards the establishment of its business in different countries of the world where they have made themselves unique. However, the video piracy is also is also creating negative impact on the overall online video streaming business. In the past Netflix streaming, business has also been accused of providing pirated videos online.

Determinants of Supplier Power (Medium)

Supplier of a video entertainment company would be the content provider of the company. Here Netflix is in an extreme disadvantage because if the company would go for higher competition then they could find itself in a position where the supplier set its supply cost content supply. If the company would not be able to develop a complete infrastructure like its rival competitors then it is highly expected that the bargaining power of the supplier places the company on the point where it jeopardizes its business operations and reputation in the market. Netflix is also bearing licensing expenses that are also contributing negatively towards its net income.

Determinants of Buyer Power (medium)

In the current case there is a war like a situation between the service provider (Netflix) and the customer on the pricing scheme establish the company. Statistics shows that more than 35 million of the household has spent 1.3 billion on the video on demand technology introduced by Netflix. However, if one business is going towards its downfall than the customer would be least interested in investing money on its product or service. Similarly, on the arrival of new devices that made the availability of the entertainment easier and instant made the buyer flock towards the unique inventions. Competitor like Apple, Amazon, Hulu and PlayStation has changed the course of the market competition. Hence the bargaining power of the buyer medium in this industry.

PASTEL Framework


The licensing fees paid by the company in order to run the operations smoothly. Netflix has also enjoyed the first mover advantage because of its prompt reputable associations and licenses with the studios and the content suppliers who offer a large amount of a movie collection. The current deals that are in the pipeline plans of the external evaluation of the company. These contracts include DreamWorks Animation, Open Road Films, Epix, Relativity Media and Millennium Films Etc. The Company has also made a fine relation between the web-based DVD selection Cloud computing services in order to make improvements in their business swiftness and escalation movie streaming capacity...........................

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