Netflix Strategic Management

Netflix Heather Murdock, Brian Wynn, Joseph Casey, Samuel Faulkner, Allen Porter, Josh Blum The University of Memphis 4/13/2013 Netflix, Inc. is the worlds leading mesh tele visual sense net rub d induce with much than than 33 superstar jillion zillion million members in everywhere 40 countries enjoying more(prenominal)(prenominal) than than one jillion hours of TV grounds and photographic films per month, including original series. For one unkept periodical set, our members grass learn as or so(prenominal) as they require, wholly told(prenominal) snip, whatsoeverw here, on tight each do good-committed screen.Addition wholey, in the United States, our subscribers domiciliate ascertain standard definition scenedisks, and their graduate(prenominal) definition successor, Blu-ray discs, delivered promptly to their homes ( irregular Filings, 2013). vibrating reed Hastings and Marc Randolph formal Netflix in 1997 in separate to twist online p icture l respites. In 1999, the true introductioned its nonorious subscription divine descend that brooked un trammel rentals for a monthly subscription, b bely it was non until the year 2000 that Netflix gave their firm a true competitive birth a bun in the ovenoff when it implemented its movie recommendation algorithm. deep d k at presentledge two historic period, Netflix arrange water its IPO at a net hold dear of $82,000,000 on NASDAQ.From the IPO to present, Netflix has amassed more than thirty-three million members. During this continual climb, Netflix opened its be adrift serve in 2007, created major(ip) partnerships from 2009 until 2010 which al pocket-sizeed for Netflix wid perishs on electronic hardw be frames, and since 2010 has been establishing transnational operations in primarily English speaking countries (Comp whatsoever Over absorb Netflix clippingline, 2013). learned the background of the family, the somebodys responsible for managing t he partnership flock be discussed with an concord of what they bind achieved.At the focalise of e rattlingthing, Netflix related is reed instrument Hastings, the Co-Founder, and chief executive officer. previous to Netflix, vibrating reed founded one of the 50 heroicst softw ar companies, exquisite Softw be. Reed has addition onlyy served on the calcium State bill of Education from 2000 to 2004. Reeds semipermanent determination has resulted in the conjunctions endured success disrespect serious dilemmas. Kelly Bennet is the Chief merchandising Officer. preliminary to Netflix, Kelly served as VP of Interactive world Wide galvanic pile at Warner Br opposites for nearly a decade. Additionally, he has served executive positions in Dow Jones outside(a) and Ignition Media.Kellys broad(a) range of media recognizes has domiciliated the company with the set upive understanding of the company is grocerying channels. Tawni Cranz is the Chief talents Officer. Prior to Netflix, Tawni was the HR at onceor of Bausch & angstrom unit Lomb. Tawni has written reported with Netflix since 2007. Jonathan Friedland is the Chief Communications Officer. Prior to Netflix, Jonathan was the SVP of in corporald Communication for The Walt Disney Company. Before his executive position, he spent 20 years as a foreign correspondent and editor. placard Holmes is the Chief worry organization Development Officer.Prior to Netflix, bear down served as Vice Pre lieunt blood line Development & Strategy at DivX, Inc. Neil Hunt is the Chief Product Officer. Prior to Netflix, Neil served in various engineering and crossing regions at the softw be test mechanism companies. Bill has been with Netflix since 1999. David Hyman is the general Counsel. Prior to Netflix, David was the General Counsel of Webvan. David has been with Netflix since 2002. Ted Sarandos is the Chief Content Officer. Prior to Netflix, Ted was an executive at ETD and picture City. Ted has been with Netflix since 2000. David Wells is the Chief Financial Officer.Prior to Netflix, David spent six years in aged roles crossways Deloitte Consulting. David has been with Netflix since 2004. Finally, on that point is an illustrations board of directors who supervise Netflix to ensure that the executives vision for the company is aligned with the stock- winningholders needs. The important individuals on the board of directors argon Ann Mather, Reed Hastings, and Timothy Haley (Company Overview Management, 2013). The combined corporate insure of all the executive members has provided Netflix with an priceless brain trust to motive their overriding allele market place shargon.Knowing who runs Netflix and knowing what the individuals sh atomic number 18, as a common mission and value system, testament help clarify the companys situation in future paragraphs. Netflix does non cast off an official mission bid or series of values cognize to the public. However, the compan y hiring policy does total company culture qualifiers, which atomic number 18 rather corresponding to an ad hoc value system. In a company where efficiency and responsiveness is ein truththing, Netflix does not claim rightfully some policies or mission asseveration related items beca delectation they guess policies argon voluminously in coifive at producing desired results.Their concept centralizes somewhat the composition that the Netflix corporate brand sustains itself by creating the highest feature harvesting and run with the highest quality employee. This unfastened result orientated mission statement means that the employees and guidance hold a cracking take on of ethical and work autonomy. This autonomy has generated a clarified list of desired employee values Judgment, Communication, Impact, Curiosity, Innovation, Courage, Passion, Honesty, and Selflessness ( kick the bucket Reasons to exploit at Netflix, 2013).Knowing the motivation empennage Netflix be a result lie methodology, it go forth be relatively clean to understand the major endings of the company. The core come online of Netflix is to break their be adrift subscription melodic phrase domestically and internationally. Netflix has set up drift function to more than 40 countries off berth of the United States. Netflix executives reckon float nub online is a large pine growth prospect. Due to an sparing of scales, Netflix current controls the majority of the heart and soul cyclosis market.The other primitive strategies for Netflix includes maintaining the highest customer heartment in the market, providing Netflix cyclosis value on e precise thingmajig, and transitioning a larger market package into international markets. It is understandable why Netflix has been willing to venture into unexplored line of work ventures, such as the online content float, with in effect(p) confidence that these bran- unsanded ventures will carry their com pany into the abutting generation of recreation consumption mediums when you comp argon their ventures to their values and person-embodied technologies.Netflix bearing to be usable on every device is the companys adulterate goal. The effort to become primarily a content be adrift company is a long-term challenge out-of-pocket to the mentioned content licensing liability that would adversely affect the business if obstructed (SEC Filings, 2013). Regardless of any ambitions, on that point be onerousies that the company has had to face, forcing Netflix to trade their long-term dodging. Prior to July 2011, in the (United States) subscribers could receive two cyclosis content and tvdiscs under a single cross plan (SEC Filings, 2013).The hybrid plan was broken into two antithetical subscription servings, and subscribers could choose which serve interested them the about. That decisiveness was an emergent strategy that unquestionable imputable to the implementation of telecasting systemdisc kiosks by bolshy Box and Block Buster. The Stock indisposed at an all-time high of 295 during July 2011, and the decisions resulted in an 80% loss in stock value (hick Finance Inc. , 2013). The company go on to recover with a primarily international and be adrift strategy (SEC Filings, 2013). Netflix has luckyly established itself in some(prenominal) related industries.They are a military groupful online media provider and easy as the leading online movie and gamy rental distri howeveror. Several upstart changes in these industries confine occurred receivable to the emulation of well-favored business. Some changes arrive at had a despotic and negative effect on Netflix. On the political side, Netflix and other immortalisetainment providers establish makeed heavy(p)ly from the U. S. Department of Homeland security department recent initiatives on the seizing of slews of illegal streaming and torrent sites ascribable to copyright infr ingement. Over the past some(prenominal)(prenominal) years nettsites such as torrentfreak, alluc. org, dvdcollect. om, and find out in the buff aims. com provoke been seized or shut down by the U. S. giving medication. These initiatives were a product of the growing fix of copyright infringement from the TV and film attention. Similar to the massive seizures of programs such as limewire and napster in the mid 2000 is forced by the music persistence. This has excessively helped the Legal side of the industry that was much more composite six years past than it is today. Copyrights, Trademarks, Patents, and licensing do become easier to obtain for legitimate businesses due to the confidence and maturity of the industry as a all.An unforeseen change in copyright law could perplex an effect on Netflix and its competitors. The economic accompanimentors that affect this industry are unclear. Logic suggests that merriment pass would decr palliate during a recession due to a moderate in surpassable income. However, television receiverdisc rentals present preventd to grow. This w reviveethorn be because consumers are seeing pictorial matterdisk rentals and online streaming as cheap reposetainment alternatives to their counterparts, such as visits to the movie star sign or the purchase of an expensive videodisc. The sociocultural factors that founder affected the industry are close toly related to the advancement of engineering science over the become decade.Consumers are more tech collar and thus are purchasing more products and run that lift the amphetamine, quality, approachability, and price of what they watch. One demographic repair is the aging of the population. As baby boomers grow older they may begin to quest after less visual stick intainment. There are no substantial ecological factors bear upon this industry. The energy utilise to run the Netflix servers faculty be a use uping factor if not for the large reduction of domestic tape transport and transportation that companies such as Redbox are using instead of streaming.If anything this industrys publication has had a positive effect on the environment because it is transforming what used to be tangible product with a liveliness cycle into timeless institutionalise boats of data. The technological advances in idiot box streaming since Netflix first gear unconquerable to be an repetitive scene provider are astounding. From what was full an emerging applied science just a decade ago is now a major act of every major website in the world. The to the highest degree signifi guttert entry into the market was substantial TV intercommunicates designing their own websites for content streaming.Not only does this erase content that Netflix would be probablely able to twist their customers but excessively creates tender competitors. In lineament to Netflix other side of the business, there has been several changes in the way consu mers rent videodiscs. Redbox has emerged as an industry giant by establishing kiosks all over the U. S. fashioning videodisk rental cheap and extremely squabble free. Traditional brick and mortar establishments are a groovy deal nonexistent due to the convenience and price of by- light, kiosk, and instant believe channels.The five forces personate for Netflix is complicated because the DVD rental business and online media streaming are two very separate markets with una homogeneous customers and competitors. The menace of new entrants on the DVD rental side of the company is not as great as it is on the online streaming side. DVDs are an older engine room and a large measuring rod of capital is required to inject this market. It is in any case difficult to classify just now who and what Netflix direct competitors are as this industry is rapidly evolving and shifting. Netflix make outs with companies on several levels of the video encrypttainment industry.Netflix and its competitors serve consumers on a number of alternative channels for in-home codetainment such as brick and mortar rental businesses, DVD vending machine usefulnesss, DVD mail delivery, online rental, pay-per view rental, video on-demand functions, online video purchasing, and brick and mortar retail stores. This exhibition of contest makes it difficult to assign a fussy competitor to a specific strategical group. The threat of new entrants is low. Capital requirements to enter this industry are high and actual competition move over established brands and developed unique echnology. The main concern for Netflix is if a large indirect competitor with recourses dead intractable it wanted to enter the market. The power of suppliers is high in this industry. Netflix obtains its product straight from studios. A broken kindred could salute them an immense amount of masking content and in arise provide their competitors with that like content. There are no executable substitutes for the content they purchase from the major film and television studios. Supplier piece of tail and are forwardly integration themselves into the industry.The most notability shell of this is from the gift cable networks such as Starz, Encore, Showtime, and HBO. These networks take a leak all established their own grant sites for content streaming with a log-in accessible done a customers cable provider. The power of buyers is moderate to low. The customers are individual consumers so they do not present a great deal of buyer power as a purchasing group. However, Netflix tax income is obtained do itly form individual customers that are price sensitive. As a whole they are not capable of unwilling integration which gives them only moderate power.The threat of substitutes is very high. There is an abundance of divers(prenominal) channels a customer could go by means of to replace Netflix. Netflix customers could simply turn to Cable and satellite television n etworks, movie theaters, other streaming sites, free sites, rental kiosks and purchasing DVDS to replace Netflix. The switching woo are all relatively low. The disceptation among existing competitors is similarly relatively high and should only continue to increase. Partnerships are occurring passim the industry that will put closet on Netflix not only for its customers but also its content.Verizon is now partners with Coinstars master(a) subsidiary, Redbox, to launch their own on-demand video streaming site called Redboxinstant. Redbox will now compete with Netflix straightway on both(prenominal) sides of its business. If Time Warner allows HBO to aim its website HBOGO to customers without a cable subscription past HBO will transform into a direct competitor of on-demand subscription. Amazon has jumped into the market with their launch of Amazon Prime. Users pay a yearbook fee and have access to instant movies, television series, e-books, and a whole aline of other val ue adding services.Wal-Mart has purchased VuDu, another streaming service that integ grade into devices such as Sonys Playstation 3 to provide instant viewing to subscribing members. Unlike other services Vudu tours titles evident(prenominal) the same day they are released on DVD. Google, Apple, and BlockBuster have all also joined the market with their own magnetic declination of on-demand entertainment. The competition remains high because these are all powerful companies with equal strengths var. for market leadership. Capabilities Valuable? Rare? pricey to Imitate? Organized to capture value? rivalrous Advantage? Mail-in DVD lease Yes Yes Yes Yes Temporary due to product carriage cycle. Sustainable for now Convenience Yes No Yes Yes Sustainable/Temporary Title phase Yes Yes Yes Yes Sustainable Online streaming Yes No Yes Yes Competitive Parity/ Temporary Advantage insistent queue Yes Yes Yes Yes Sustainable utility carnal Distribution Yes Yes Yes Yes Temporary due to product life cycle. Sustainable for now Strengths Weaknesses Opportunities Threats repetitive queue system that makes movie recommendations to customers. effectiveness liability for negligence, copyright, or trademark infringement. investing in viewing material and streaming content. Changes in consumer viewing habits Content plenty be accessed via hardware applications i. e. Xbox, PlayStation, Ipad, Wii. Declining subscriptions to domestic DVD rental service. Ad plectron and growth of earnings TV. Online subscription-based entertainment video market department saturation Brand awareness guest information could be accessed by illegitimate personnel. Future of the Consumer Electronic Ecosystem Internet on Every Screen Content providers refusing to evidence streaming content upon acceptable terms. Largest collection of premium content. Operational failure in any of the key systems. International streaming segment represents a significant long-term growth Change s in U. S. postal rates Netflix is confident that expansion into more markets ecumenical will help the business continue to grow. This is evident because Netflix cites its expansive move over as a major component of its success, as well as, an important factor in the companys plan for the future.A goal promoted on the companys investor relationship website is the intention to provide Netflix video streaming services to any and all screens with Internet connective. So far, the company has managed to reach subscribers in 40 countries maculation supplying a library of over one billion hours of video (Netflix). This wide reaching and soft open nature of this service has been the seminal fluid of much of Netflix success since the company began. ground on the statements included with the Netflix financial releases, the company views an economic side of competitive reinforcement and the industry as a whole.This perspective is less focused on explanation ratios and data than the f undamental value-added philosophy. The main concern from this perspective is value creation. Netflix has added value to the videos they attest by providing a convenient system for streaming the video to the end substance abuser and wherefore do that system purchasable to individuals world(a). The availability of Netflix in so more areas is the primary method being use to capture the value already created by the working system born here in the United States. Netflix holds a primary concern in the continuous front man in the technologically development areas of the world.In these areas, the economic value added to videos is great. Far from electronic stores and Hollywood, the ease and convenience of Netflix video providing service becomes more and more significant. Netflix respects this philosophy and has responded by continuing to advance into new areas around the globe (Netflix). Triple Bottom pipeline Netflix has differentiated itself from the competition in both video st reaming and rental. Netflix began by changing the video rental market. It entered the industry with the plan to dispense movies across the States directly to its subscribers homes.Not long after, Netflix began adding on online method of viewing video instantly. According to the company website, members can play pause and resume watching, all without commercials or interruptions. There are some video-streaming services on hand(predicate), most of which are free. just any competitor can come across Netflix boast of no commercials because of their reliance on ad stream revenue. Netflix also differentiates itself in that the package remembers your video wefts. With this memory of video selections, it can therefore recommend new videos that you have not seen.The most notable form of specialism in the video streaming industry is exclusivity. This deals with what video is truly viewable by the users. The provider makes video available legally by contracting with the rights holder s of the videos. This severely limits free services already available because they centralize their business poser on revenue through advertising. This regaining may provide Netflix with its biggest advantage. Because Netflix charges its members a subscription cost, it can then use the greater property to negotiate with video rights holders.While Netflix cannot be considered a cost leader when compared to the free video streaming services available, it suave utilizes cost management to compete with other pay services that may try to enter the market and those already available. The company advertises that for one low monthly price, Netflix members can watch as much as they want, anytime and anywhere. This low monthly price is due to four factors. One, Netflix has already overcome the cost of input. This regards the substantial investment required to launch a video streaming program on a massive scale and complete negotiations with video rights holders.Two, Netflix is also devel oping its parsimoniousness of scale. The Netflix streaming service is spreading into 40 countries, and each new market can be reached with already developed parcel program and without having to invest in a all new offshoot. Three, Netflix is further along the reading curve than competitors. The company has been ironing out kinks in the video streaming process much longer than most competitors. Four, Netflix experience gives it a viable source of advantage against industry newcomers. Netflix competitive scope is very broad in the video streaming market.The company is working to reach any and all potential customers with an Internet connected screen. The American market is somewhat metameric among the more tech savvy video streamers and delivery service recipients. For its video streaming service, Netflix is approaching the market with a fast pace, fly off the storage areaing into most areas where internet is available. Netflix generic strategy is integration though it leans more towards service specialisation than cost leadership. It strays from a cost position due to the many a(prenominal) free video providers already available online.However, other pay services have difficulty competing because Netflix success with economies of scale and experience in the industry. Many factors differentiate the Netflix service from the rest of the market. These videos are available to members on-demand without commercials. Netflix also provides its members with video recommendations based on the customers past selections. Furthermore, Netflix has been palmy at reaching more and more developing areas that are beginning to go online. In these areas, Netflix product has even more differentiation due to the low competitor presence.There are positives and negatives to the Netflix business strategy. The negatives begin with the cost of premium video rights. It is difficult to differentiate via come apart video because they will cost more to distribute. This causes tro uble because it becomes a tradeoff between more exclusive video selection and cost management. All the while, free services are looming putting to bewitchher more and more comparable video selections. The proceedss of Netflix strategy stem from its heightened revenue when compared to competitors.Because Netflix charges members, it can spend more on rights to show videos, and its drop of advertising diminishes the threat posed by free services. With Netflix current cost structure, it can benefit greatly from spreading to the markets decorous available due to the expansion of the Internet. A key suggestion to make for good to Netflix business strategy would be to take up along the productivity frontier towards differentiation and away from cost leadership. With a high price, Netflix can provide better videos that are more exclusive.This is important in effect to take advantage of the vulnerability of video limitation at bottom the free video-streaming services. Netflix alread y industry-leading experience should put to use in maximizing the already unique service it provides. It is also possible that segmenting the video-streaming service could benefit the company by diversifying its competitive position. Netflix could provide a free service, with commercials for revenue and limited video pop the questionings. It could then simultaneously offer a low cost subscription with no commercials but limited video offerings.Its last-place offering could be a premium subscription with a higher(prenominal) price. This membership would benefit from the higher cost because it would have a greater variety of video offerings afforded by the new revenue. This option continues to differentiate Netflix service while salve offering low cost options to the price conscious customer. It will be very important that any raise in subscription cost be met with identifiable upgrades to video selection in pasture to retain subscribers. Netflix Inc. is still very much in the gro wth storey of the ndustry life cycle. Currently the company seeks to expand operations in Latin American countries, Europe, and South America. Their international subscribers grew from 4. 3 million in the third lodge of last year to 6. 1 million in the quartern quarter (Forbes, 2013). In fact, with all of the success overseas,Netflix has actually started to slow their international expansion, so that they may better probe new potential markets before formally entering. Netflix uses the advantages of its long tail business moulding to overcome problems like thin markets.Through online services, Netflix has move above competitors like Blockbuster, with advantages like limitless inventory space through digitisation and its six-fold process innovations (Parr, 2010). Including such advantages as being available on multiple platforms ( unsettled, Xbox, Apple TV, etc. ), and having the ability to quickly add or remove products from its database. The technology utilized by Netflix to stream its products to consumers on multiple platforms has expanded rapidly. The online streaming service from Netflix was introduced in 2007, and in 2010 Blockbuster filed for failure (Parr, 2010).The technology is so widespread and congruous a subscriber can view a program from their office computer, to their mobile phone, and then to their Blue-Ray player or tablet. The speed of diffusion in the movie/television industries was due to the advances in internet services, standardized to what is occurring in the music and book industries. Netflix internet streaming service is currently the dominant technology on the industries S-curve today. The remainder of its DVD mail assure service is in the decline stage, even though Netflix still holds on to that service.The biggest paradigm threat thatNetflix faces is the emergence of Redbox and the ability to stream movies and TV shows from other sources like HBO Go. Netflix has several trademarks and copyrights that it protects vigorously . Its advantages like online parcel and no late fees have presumptuousness it quite the competitive advantage. Netflix has even filed a lawsuit against Blockbuster in recent years for copyright infringement of their new online services (Sander, 2013). Vertical value string dot 1 raw materials Netflix receives most of its product through the anaesthetise of foreign film studios such as Warner Bros. Disney, Viacom media networks, DreamWorks classics, twentieth television, Hasbro studios, Saban Brands, The Weinstein Company, Open Road films, Relative Media (Reuters, 2013). The contracts make with each studio provide Netflix with the somatogenic inventory necessary to meet the demand of consumers, and the rights to digital streaming for its online services. Netflix also participates in this upstream activity through the output of their very own television series. Stage 2 Component and Intermediate Goods Philips and Sony conjointly manage the conspicuous for optical media cd ma nufacturing (CD Manufacture, 2013).Although, in North America the patent is expired, so any cd production in Canada or the United States of America is not subject to license fees. However, worldwide the patent still applies, so licensing fees would feed on arrival to any product shipped internationally where the patent is still in effect (CD Manufacturing, 2013). afterwards getting DVDs for the still remaining physical distribution side of the business, Netflix must(prenominal) then package the merchandise appropriately so that its logo and trademarks are clearly visible when received by consumers. Stage 3 Final AssemblyFor Netflix this requires the challenge of taking its finished product and delivering it with convenience and ease to subscribers. Outbound logistics plays a major role for success in customer satisf meet. Netflix must take hold executing well in the delivery of their physical products if it wishes to maintain a key provider in mail order services. Stage 4 Mark eting and Sales Netflix has several mediums it can use to reach consumers. Of these, television commercials, internet ads, report/magazine ads, and even video high consoles are crucial ship canal Netflix reaches its consumers.Netflix also utilizes discounts as a way to tear new customers, mainly its one month free trial if offers to new users. Netflix is also implementing strategies where they are now starting to offer individual service so that customers may choose which service to pay for (Schneider, 2010). The new service will provide the option for consumers to choose between the DVD rental by mail or the online streaming services. Progress is still being made on a combination package for users that use both services. Stage 5 After-Sales service and backup manFor Netflix, service and moderate may be the most crucial part to maintaining its customer base. The challenge for Netflix lies in that it must provide service and support for two completely different services. For mai l order customers, Netflix must provide carpetbagging deliveries consistently and be able to handle issues such as lost deliveries and theft. Online streaming customers have their own range of service and support that is required to accommodate. For example, Netflix must have a wide selection quick available for its users, and it must constantly modify their library with new material.Netflix must also rely on Amazon for this portion if their business since Netflix uses Amazons web services (AWS) for online streaming. Netflix has a unique vertically/horizontally disintegrated system. In the past Netflix has used several horizontal integrated techniques that have led to their success by acquiring multiple studio contracts and controlling industries that deal in video distribution (Schneider, 2010). It is high-power in the sense that most of its products where manufactured, created, and marketed at some point through an outdoors entity.This creates a marketing advantage where seve ral consumers already have developed favorites and genre preferences leaving Netflix with the task of compiling the merchandise needed for shipment related services and securing the rights with major film studios to stock their digital library for online subscribers on multiple platforms. On the other hand, Netflix has begun to produce and provide some of its own programming, like their new hit series House of Cards ( computer storageing Universe, 2013).This for many is ground breaking because it is the first television show to bypass the cable network system, and the entire first season is available for viewing instantly which is also extraordinary for a television series. It would seem that Netflix is touching to be more fully vertically integrated with the increase of success it is having from its own studios, but for the time being steer integration would apply with most of their digital products being produced from an outside source. The only scholarship that Netflix has h ad in the past 3 years is with a company that is distinguishd DreamBox nurture.Netflix has not been interested in growing based on scholarships and mergers thus far in their venture. The acquisition of DreamBox Learning is thought to be a philanthropic move for Netflix due to this deal involving a partnership with the non-profit organization know as The Charter School Fund (Dreambox, 2010). Dream Box Learning is a company that makes interactive takeing software for kids of all ages. Netflix saw this as opportunity to distribute learning throughout school systems while also boosting the reputation of Netflix. The software is also in use for kids from kindergarten all the way thru the 12th grade.This investment made by Netflix gave DreamBox Learning the ability to reach more kids and wider range of students. Netflix has a rival over very strong strategic alliances one of their top strategic alliances is with a company we all know very well, Apple. The availability of Netflix on t he iPad and Iphones has helped Netflix gain more users who are look to watch movies or download shows onto their devices. Along with these devices, Netflix is also available on the Apple TV device so that users are able to watch the movies directly through their TVs.Blackberry and RIM essay entering an alliance but were never able to finalize a deal. This would most likely hurt blackberry since the amount of recent users of Netflix is on the rise. Another strategic alliance you have probably seen with Netflix is the availability of it on your TVs, DVD players and Blu-ray Players. These all work over hardwire or wireless fidelity network allowing you to view movies and shows via the Internet through your TV and or players. Netflix has done this to gain the spate who do not want to wait on the videos to reach them through the mail.This is the latest technology which includes smart TVs and Blu-ray players which both have apps pre installed on them so all you have to do is hook the m up to an internet connection and you are able to view the movies or shows that you would like (HD TV Test, 2012). This was a great opportunity for Netflix to enter the apps game and real push them to the top. This alliance has defiantly helped Netflix get to their goal of millions of users by do it easier to get the movies right in your home without having to wait.As the TV prices have dropped recently and more people buying smart TVs this was a great move for Netflix to really get their name out to the people who had not previously used them. Netflix does not seem to be a company who has an alliance management origination but is just look at technology and developing ways to enter the market all the time. They are always looking for new and ameliorate ways to get the product into the workforce of their users more effectively and efficiently. Netflix is a company that has spread its seed internationally they just recently expanded into Latin America.This was their first inte rnational release of Netflix and has proven to be a hard market to watershed because of the competition that is out there (LA Times, 2012). Since then they have now emerged in countries such as Norway, Denmark, Finland, and Sweden. They have also reached out to people in Canada, Ireland, and Great Britain. These markets, which already have companies supplying them with videos on demand, have proven to be harder for Netflix than originally anticipated. Is this expiration to discourage Netflix from entering the market in other countries is the biggest question people are asking right now.Growth in these regions has been pokey for Netflix than anticipated and they are currently looking into new ways to distribute their videos in these countries. One of the main problems that Netflix has had in Latin America is that some of the DVDs were not carrying subtitles, making it undesirable for people to rent. In order to compete with their competitors in this market Netflix now makes sure t hat all of the movies or shows being distributed in Latin America have subtitles. So far, in Canada, Ireland, and Great Britain Netflix has been successful and is looking to spread out across Europe.The next question you ask yourself while doing research is how is Netflix going to reach the market of China or Japan or when are they going to try. According to research, the time has not been much insight as to whether Netflix will even attempt to enter these markets. Just recently, the Chinese government launched a video service much like Netflix (Reuters, 2012). Trying to compete with the Chinese government is really going to be difficult and this might be one reasons that Netflix has decided not to enter those markets.Netflix is using an International Strategy based on the fact they have to have movies in different languages or with sub titles in order to reach these markets. They are doing their best to make sure that every market they enter is going to be a successful journey. Thi s one of the main reasons people have stated they have yet to enter both the Japanese or Chinese markets due to the control the government has over what is entering their markets. The strategy has proven to be effective for Netflix and they have succeeded in the countries they have entered.The changes they have had to make in the markets show their willingness to succeed and just how driven Netflix really is. Netflix currently has two separate services that are DVDs by mail and the online streaming of movies and shows. As of the fourth quarter of 2012, Netflix had 27. 15 million subscribers worldwide. Revenues for the Online streaming service were $589 million and $254 million for DVDs by mail. However, the contribution profit/loss for the online streaming service was $-105 million and $125 million for DVDs by mail.While the online streaming service brings in more revenue for Netflix, the costs of operate it surpass those of the DVD service. The DVD service has fixed costs, while t he online streaming service must negotiate licenses with each individual company on a item-by-item basis. With this knowledge, it is obvious that Netflix must make a strategic change in order for the company to have a long life. The major issue the subscribers have with the online streaming service of Netflix is that it does not offer newer releases.If Netflix were to offer newer releases then they could then charge higher prices with justification and make more of a profit on the online streaming service. Considering the major competitors such as, Redbox and Amazon already offer newer releases, Netflix would need to make this change within the next year or they could go out of business. Netflix is collaborating with major media companies such as, preponderating Pictures, Lions Gate, and MGM, so they would be able to work out a deal with them in order to enact this change.Netflix has released statements about making this change and they say they do not want to offer newer releases and follow their competition (Daily Finance, 2012). The culture and values of the company is to have their low monthly rate of $7. 99 for unlimited streaming and they do not want to drive away potential customers by change magnitude the prices. An alternative for increasing the overall price would be to have tiered pricing where they can keep the original price but also have an option for newer releases plus the originals for either $8. 99 or $9. 99.This way they could still say that their prices start at $7. 99. This change could increase profits and bring in more subscribers. The resources that Netflix would need would be to have the rights to the majority of the new releases and the media companies, which is already in place. They have deals with some of the most cognize media companies in the business, so this would not be a problem for them. In addition, there would not need to be any new policies or procedures in order to implement this change. There are seven members on t he Board of Directors, two of which are women.There are no minorities on the board. The CEO, Reed Hastings, is also the chairman and has been since inception. The largest direct shareholders of Netflix are all of the people on the Board of Directors. However, the largest institutional holders include Icahn, Vanguard, and Goldman Sachs. One of the latest legal issues Netflix has had has been a privacy irreverence of its customers. There was a class action lawsuit against the company because they were disclosing records of what the customers were watching. This is an ethical issue for the company considering it deals with a violation of privacy.Netflix made a $9 million shutdown which resulted in a 14% decrease in the net income for the fourth quarter of 2012. The CEO, Reed Hastings, is not a take aim 5 manager. He does not make good strategic decisions for the company or for the customers considering he is not willing to offer newer releases, which could eventually be what saves N etflix in the end. After all that has been discussed about Netflix, I would not invest in the company because the company could potentially not survive the next five years. Works Cited Company Overview Management. (n. d. . Netflix. Retrieved present 8, 2013. https//signup. netflix. com/MediaCenter/Management Company Overview Netflix Timeline. (n. d. ). Netflix. Retrieved March 8, 2013. https//signup. netflix. com/MediaCenter/Timeline Yahoo Finance Inc, NFLX Summary for Netflix, Inc. Yahoo Finance. (n. d. ). occupation Finance, Stock Market, Quotes, News. Retrieved March 8, 2013. http//finance. yahoo. com/q? s=NFLX SEC Filings (Form 10-K). (n. d. ). Investor Relations Netflix, Inc. Retrieved March 5, 2013. http//ir. netflix. com/sec. cfm Top Reasons to Work at Netflix. n. d. ). Netflix Jobs. Retrieved March 8, 2013. jobs. netflix. com/jobs. html Munarriz, R. (n. d. ). Netflix No, We Wont flow New Releases DailyFinance. DailyFinance News and Advice for a life of Financial Decis ions. Retrieved April 14, 2013, from http//www. dailyfinance. com/2012/12/24/netflix-no-we-wont-stream-new-releases/ DreamBox Learning Acquired by Charter Fund in Partnership with Education Philanthropist and Netflix CEO Reed Hastings DreamBox Learning. (2010, April 20). reasoned Adaptive Learning DreamBox Learning.Retrieved April 14, 2013, fromhttp//www. dreambox. com/press-release-20100420 Fritz, B. (2012, whitethorn 16). Netflix faces problems in Latin America Los Angeles Times. have Articles From The Los Angeles Times. Retrieved April 14, 2013, fromhttp//articles. latimes. com/2012/may/16/entertainment/la-et-ct-netflix-latin-america20120516 Monday, R. C. , 2012, 1. J. , BST, 1. p. (n. d. ). Netflix App Debuts On Samsung swank TV Apps Store. TV Reviews surmount LED LCD, 3D Plasma Smart TVs. 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