Week 2 discussion

Explain Netflix’s marketing strategy. Can it sustain its competitive advantage? Why or why not?

Netflix’s marketing strategy seems to be to provide a service that differs from their competitors and has a lower price point. To this day, you can see Netflix pioneering streaming services with their original series coming out before other providers like Amazon Prime or Hulu were producing their own shows. Netflix also continually updates their service offerings, as is the case with their new option to watch offline with the mobile app. In many ways, I believe Netflix has great potential to stay in the game – Netflix makes the right decisions at the right times to be successful. However, it is a common complaint that Netflix’s streaming service is losing variety, and many popular titles are disappearing from their library. Because of this weakness, I believe that Netflix certainly has an edge to stay in the game, but is unlikely to ever be the most popular streaming service by far.

How has their strategic change and rapid reversal affected their customers?  Do you believe this situation is short-term public relations nightmare or a long-term reversal of fortune?

I think that the change to Qwikster and rapid reversal was a short-term PR nightmare, however in the long run it did show customers that the company cares about what they want. Many customers were turned away because of the uncommittedness that Netflix was showing and their unhappiness with rising prices and changing services, but the customers who remained loyal saw that Netflix cares enough about customer preferences to undo a large shift in the company to keep their customers happy.

Perform a SWOT analysis for Netflix. What are its biggest threats and which opportunities should it pursue? You may attach an attachment if necessary.

Strengths: High quality original series, easy to use platform, reputation, and offline video streaming.

Weaknesses: Decreasing library, focus shifting away from the older library into primarily original series.

Opportunities: Netflix has many opportunities available, some of which they have certainly capitalized on lately. I think the best way for Netflix to grow would be to place more of a focus on making new movies available sooner after they come out – I would definitely be a lot more likely to watch new movies on Netflix as soon as they leave theaters, especially only paying $10/month for as many as I want, than I would be to go to the theaters every time I think a movie could be interesting. By focusing on newer movies, I am confident that Netflix would gain more customers and that these films would be viewed by a much wider audience.

Threats: I think that Netflix’s biggest threat currently is Hulu. As many old favorite shows are being taken off of Netflix, Hulu still offers these shows and keeps a low price. While Hulu users must deal with commercials, it can certainly be worth a few commercials to see your favorite show. Hulu also offers new episodes much sooner after they air, making it much more convenient to stay up to date on your favorite shows.

What is the best way for Netflix to grow its business? Justify your answer.

By offering more new releases, Netflix will expand its customer base. Many people are not willing to pay to see a movie in theaters, and definitely won’t go to see every film that interests them in order to save money. That being said, offering unlimited streaming of each months newest films for one low price is definitely a key factor that will entice new users who have interest in seeing any new movie they want for the price that they’d pay to see just one movie in a theater.