Netflix Company in the Movie Industry

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Name and describe the organization’s Industry

Netflix is an organization that is applying modern technology in its activities and is currently involved in the Movie industry where it carries out activities that allow its clients to subscribe for paid mailing of movies and delivery of the movies at their homes. The organization is hence involved in the provision of services that allow clients to select the movies of their choices from any of the sources they can use, and then they request for the delivery of such movies in any format, especially in the Digital Video Discs (DVD) format (Thompson 1).

Describe the Dominant Economic Characteristics of the Industry

The organization carries out different economic activities in the movie industry. The main economic activity, however, is the fact that the company offers delivery services to its clients who order for their favorite movies and then pay for the delivery services that allow them to be delivered to their doorsteps. In this way, the clients are able to make payment arrangements for the services, mainly before the delivery, in any of the agreed modes of money transfer and bill payment services.

Usually, since the clients subscribe to the organization at a given fee, then they usually become full members, and under some organizations, they are able to order for the movies and have them delivered, then make the payments for the deliveries at a future agreed date, usually at a given time interval such as weekly, monthly or after a few months (Thompson 1).

The movie industry, on the other side, has various economic activities that are very significant to the whole economy. The Industry has various departments that are the main consumers of different electronic gadgets. Research has shown that more than 85% of the population in the country purchased a specific electronic product within a timeframe of one year. This implies that the organizations dealing with the manufacture and supply of electronic products were able to gain a lot of revenue from the sales of such products.

On the other hand, the movies industry contributed to the development of the economy through the provision of employment opportunities, and hence individuals who were involved in the sales and distribution of the movies were able to earn a living out of the sales, distribution, production of more copies through downloaded movies and delivery of movies to the consumers’ doorsteps.

The Industry also contributed to the advancement of technology through the invention of better gadgets and techniques for the viewing of movies through different outlets such as internet viewing and different ranges of players. In this way, different people, especially households, could be able to view movies from different places rather than the movie theaters. They could be able to access and view movies from anywhere using laptops, internet connections, from their vehicles, houses, and anywhere else, they could access the movies (Thompson 3).

Describe the major Driving Forces of the Industry

There are different driving forces that are associated with the movie industry and which allow the Industry to grow faster and with a lot of diversity. The main driving force, however, is an innovation which has led to the establishment of better and more convenient and efficient electronic gadgets that allow easier and faster access and viewing of movies, the discovery of better modes of carriage for the movies such as high-capacity DVDs, the internet and carrying the movies in soft copy using other modes of storage.

The Industry has also been advanced by the establishment of different modes of viewing of the movies that allow the movies to be viewed from different locations such as households, vehicles, offices, and any other location even while mobile. This allows the Industry to have a diverse platform of consumers of the movies, a fact that increases the demand for the products, consequently motivating the increase of the supply of the products.

Identify & assess the strengths of the Industry’s Competitive Forces; Summarize the industry impacts

There were many factors that contributed to the overall strength of the organization’s activities and its competitive advantage against its main competitors who included the movie download websites, local movie outlets and hire service providers, TV channels which offered different movies for viewing, and cable movie channels. The main strength for the organization against its competitors was that unlike most of its competitors, it was able to sell the movies to its clients and even deliver them to their doorsteps at a cheap and friendly fee. Most of the organizations that offered home delivery services such as cable TVs and the internet were quite expensive and required more gadgets that required a high initial cost of installation and running.

The other strength of the company is that it delivered products that offered more flexibility to its clients. The clients were able to view the movies using different electronic gadgets that they already had purchased and could even be able to view them using the gadgets that were being newly invented and supplied in the markets using the newer and more advanced technological advancements, unlike the case in some formats of movies that could not be viewed using any gadget but were rather more specific to a few gadgets.

The organization also had the advantage of using better, more convenient, and yet cheaper modes of delivery of products to the clients, unlike the rest of the modes of delivery. The use of mailing services was very convenient as it allowed delivery of the products directly to the clients’ doorsteps in a very reliable, fast, safe, and cheap way. This hence made this form of delivery more preferable, unlike most of the other modes of delivery that were either very costly or demanding in terms of access gadgets and modes of viewing.

Identify and describe the Key Success Factors for the Industry

The organization and the industry as a whole had a lot of factors that could have been identified as having been contributors to success for the Industry. One of the key factors that could have led to the success of the Industry was the growing demand for the purchase and viewing of movies among different and diverse people of different generations and age-groups.

In this industry, the rising demand for movies had resulted from the increased purchases of different technological gadgets and advanced technology as well as the invention of different and better applications of technology that could allow different viewers to access the movies from different locations and for different age groups, as they would prefer, allowing the organization to make more sales and hence succeed in achieving its organizational goals. This consequently results in the development of the organization and hence leads to the success of the Industry.

On the other side, there are many improvements that have arisen as a result of the technological advancements in the movie production industry and the competition in that industry that has resulted in the venturing of more movie-makers into the film production industry. This has boosted the movie production industry due to the improved quality of the movies, leading to more demand for the movies in the market. Hence, due to the increased demand for movies, there are more people seeking to subscribe to the services offered by Netflix and other related organizations. This has hence led to increased sales for the Industry and the consequent success of the Industry (Thompson 4).

Using a Strategic Group Map identify & discuss the major “players’, their strategies, and how the strategies differ

There are different groups that use different strategies, and they are;

Retailers such as Wal-Mart and Amazon.com, whereby they sold the videos to the customers directly from their outlets.
Rental outlets, which included Blockbuster which rented out the videos at a small fee, and the customers would return the videos after viewing.
Subscription services such as Netflix and Blockbuster, which allowed their clients their choice movies and then have them delivered at their doorsteps.
Movie download websites that allowed their clients to download movies directly into their PCs or view them online and included iTunes.
Cable TV channels such as HBO and Starz which allowed their clients to view different channels offering a wide variety of movies at a fee.
Companies that offered Vending machines which allowed clients to purchase or rent their favorite movies.

Is the Industry attractive? Why and/or why not?

The Industry is very attractive to clients and many movie-viewers in the population. This is because the Industry allows flexibility and convenience for the clients as they are able to order movies from the organizations and get them delivered to their doorsteps. This way, they are able to get a wider variety of movies as well as arrange for better terms of payments to the organization.

This is hence a great advantage, unlike most of the other sources of movies where a client needs to make cash payments before getting the movies or even has to wait for sometimes before the movies are delivered to a nearby place where the clients can then access them. This is usually quite inconveniencing and not preferred by most of the movie viewers. The organization is hence able to capture the attention and interest of many clients in the industry and hence is more attractive than most of the related industries.

However, the organization is facing a lot of challenges in the current technology generation as many of its clients are shifting from the purchase of hardware format of the movies on DVDs and are preferring purchasing the movies in pure software format, especially through the use of the internet viewing and downloading which allows them to have the movies available in soft copy anywhere they are, and they can also easily share the materials on the internet with others unlike the case of DVDs which cannot be easily shared as if shared, it would mean the one who initially had a movie on a DVD couldn’t have it anymore.

Conduct an in-depth financial analysis with regards to profitability, liquidity, and growth, and then provide an assessment of the overall health of the firm’s finances

From the financial assessment of Netflix as an organization, it is clear that the organization has been incurring high expenses and running costs that have resulted in a decrease in its profits. This may usually be attributed to the ever-increasing and advancing technology that has led to more advanced modes of purchase, viewing, and even storage of the movies, especially through online purchase of the movies, downloading them online into the client’s computers and storing it in the client’s computer hard disc.

These modern methods allow quicker, safer, and more convenient modes of purchase, payments, and delivery of the movies where some of the movies are delivered almost immediately they are purchased instead of waiting for some time as is the case with the Netflix delivery services, which depend on the distance to be traveled and the efficiency of the mailing companies.

The organization, however, portrayed a high level of liquidity of all its assets and capital investments, unlike most of the other organizations that conducted their services in different ways and could usually not be able to liquidate easily. For example, an organization that fully depended on the internet for its delivery of movies to its clients and even employed online payment services for the payment for movies my clients would not be easy to liquidate as much of its capital investments and other investments are based online. However, due to the physical form of most of the investments in Netflix, the organization possessed a higher level of liquidity.

The organization was undergoing a lot of competition and even losing its competitive advantage against its competitors in the recent past. This may mainly be attributed to the technological advancements that are forcing many people to venture into other modes of purchase and delivery of products against the use of the normal physical delivery services that are now being viewed as outdated and limiting. Hence, the organization has been losing a lot of its clients to its competitors and consequently losing its competitive advantage against them. This has, in return, led to the slowed growth of the organization to a level where it is not able to achieve its organizational goals easily and takes a lot of time before achieving certain objectives, unlike the case in the past (Thompson 1).

The organization is hence in danger as it is on the verge of being totally overtaken by its competitors even as it loses hold of its competitive advantage, its profitability goes down, and its overall growth gets tremendously slowed down by the competition from other related industries. At this unsecured financial position, the organization needs to establish and implement better policies so as to be able to gain its competitive advantage against its competitors.

Using tools such as value chain and/or resource-based view identify the competencies and skills the firm has that provide the organization with a competitive advantage and summarize their impacts

The organization has got various factors that contribute to its competitive advantage against its competitors. One of the main contributors to the competitive advantage for the organization is the existence of very well-created and implemented marketing strategies that have acted as the main anchor for the advancement of the organization in the market. The marketing strategies applied are very effective and enable the organization to still maintain a large customer base, even with the rise of more competitors in the Industry. The creation of confidence and trust in the customers is a successful strategy that the organization has used as an assurance of the quality and reliability of the services that the organization offers to its clients.

In addition, the organization has a well-equipped labor force that, if properly utilized, could result in an improvement of the competitive advantage of the organization. Unlike most of its competitors, the organization actually carries out most of the processes involved in the purchase and delivery of services by the customers instead of outsourcing for more labor force to be used in such services as is the case with most of its competitors, especially the ones who apply internet services for the sale and delivery of the products (McConnel et al. 3).

Conduct a SWOT analysis of the company and describe its strategic relevance and summarize its impact

The organization had a lot of factors that contributed to its strengths and helped it gain a competitive advantage against its competitors. The organization was able to deliver products directly to the doorsteps of the customers hence making it more reliable and trusted by customers. The organization also applied methods of purchase and delivery of products that were very reliable, efficient, and convenient.

The organization, however, faced challenges that attributed to its weakness, especially due to the fact that it applied old and almost outdated modes of purchase and delivery of its products to customers. The organization failed to embrace and apply modern technology in service provision to its customers, and this was a drawback for the organization compared to its main competitors.

There were many opportunities that were at the dispensation of the organization. There was a probability of increased sales, returns, and even an increased competitive advantage for the organization against its main competitors if the organization was to embrace and apply modern technological advancements to its operations. This the organization would do in its sales and marketing strategies, services allowing the clients to purchase and pay for products from the organization and also in the delivery of the products, especially over long distances.

The main threats for the organization were the many upcoming cable movie channel providers as well as the movie websites that could allow viewing and download of movies to a customer’s computer. These competitors had an advantage as they employed the latest technology into their services and hence were usually preferred by clients. However, with the increase in the number of false and probably toxic websites that posed as movie download websites yet took advantage of clients’ in different ways, this threat was minimized as the clients still preferred to utilize the services from the organization, which were more reliable and efficient.

Competitive Strength Assessment (CSA) Matrix

The organization had more strengths compared to its competitors as it had a wider customer base due to the application of better marketing strategies and also due to the negative factors associated with its main competitors. However, there was a need for the organization to apply modern technology in its services in order to maintain its competitive advantage.

Hence, with the proper application of modern technology, the organization was still in a competitive position against its main competitors.

The firm’s present mission

The firm has a mission of offering quality services to its clients at an affordable and friendly price. This mission is a great one as it captures the needs of the customers of the organization and also helps to meet the requirements of the Industry at its time.

However, the mission does not have a provision for the assimilation of technological advancements and is hence nearly outdated. This is because there are a lot of technological advancements that have taken place and have revolutionized the way the movies industry and, more specifically, the delivery of movies to viewers is carried out. This has led to the invention of better and more reliable, convenient, and faster modes of purchase and delivery of products for the clients.

There is, therefore, a need for the organization to formulate ways of integrating its culture of service provision with technological advancements, a process that may lead to improved quality of service provision since the services could become faster, more reliable, and more convenient.

Identify the firm’s present generic strategy. Does the present strategy fit with market forces? What supporting strategies does the firm use to compete? Has it been effective in establishing a sustainable advantage?

The firm applied a strategy of selling products to the clients and then delivering them to their doorsteps. In this way, the organization was able to fit into the current demands in the market since most of the movie viewers preferred getting the movies delivered to them in a convenient way or having an easy movie access channel.

The organization has had a sustainable advantage against its competitors since its services are reliable, convenient, and cheap, unlike most of the other companies’ services that are either complicated or expensive.

What are the strategic issues the firm must address to be competitive?

The firm needs to address a few issues pertaining to the different strategies it is using in order for it to be able to gain a competitive advantage against its main competitors. One of the main strategies that need a reformation is the service delivery strategy, especially the actual process of delivery of the products to customers. In the current technologically advanced market, there is a need for an integration of modern technology into the delivery of the products to customers.

Most of its main competitors are implementing strategies that allow them to deliver the products to clients in their preferred format as well as providing services that allow the clients to view or acquire the products within a short time. There is, therefore, a need for the organization to formulate ways of addressing the issue of integrating technology into the delivery of its products (McConnel et al. 7).

The organization also needs to reform its sales and marketing strategies to include those applied using modern technology.

Most of its competitors are using modern technology to advertise for their products and to carry out other marketing processes. There is a need for the organization to implement such technology in its marketing strategies so as to catch up with its competitors and maintain a competitive advantage against them.

What strategic changes would you recommend to address the firm’s strategic issues?

The organization needs to carry out some strategic changes so as to be able to address the issues pertaining to its strategies. Such reforms may include the use of the internet and website services to carry out advertisements, allow viewers to see and select the products of their choice, make their payments online, and then have the products delivered to them physically. This would hence ensure greater improvement in the quality of the services offered and thus enhance the improvement of the competitive advantage for the organization against its competitors.

The organization may also be able to use faster and more reliable means of delivery of the products to the clients hence increasing its customer base, consequently increasing its competitive advantage. Such services may be cheaper to use hence may reduce the costs incurred by the organization even as they ensure quicker and more reliable delivery of products to the clients.

Works Cited

McConnel et al. Contemporary Labor Economics. 9th Ed. New York: McGraw-Hill/Irwin, 2009. Print.

Thompson, Arthur. Competition in the Movie Rental Industry in 2008: Netflix and Blockbuster Battle for Market Leadership. Englewood Cliffs: Prentice Hall, 2009. Print.

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