Sanders MKT 3301 Unit 8 PP

1

Netflix

Jakeris Sanders

Columbia Southern

Netflix

SWOT Analysis of Netflix

Netflix's SWOT analysis covers its strengths, weaknesses, growth strategies, market opportunities, and threats. As a leading streaming company, it has many benefits. The company can fight market threats and grow.

Strength

The company's strength is a key component of its SWOT analysis and expansion plans. Netflix's benefits make it a top streaming provider.

· Netflix has become a household name by replacing famous TV shows. The company has grown exponentially.

· Netflix is available in Southeast Asian countries and beyond. It's given them an edge in a volatile market.

· Netflix's original films and shows provide fledgling filmmakers options. Audiences love the platform's unique content (Onyusheva & Baker, 2021).

· The company is flexible. Netflix adapts to market demand and consumer preferences. Hence Netflix's popularity.

Weakness

Most companies also have flaws. Companies can fix these flaws. Despite being a profitable company, one thing hinders its growth:

· Netflix's restricted copyright hurts their business. Company debts are rising.

· Original content is scarce. Costly memberships are less common abroad.

· The company has mostly a North American clientele.

· Netflix lacks qualified customer support agents, resulting in poor service and low consumer happiness (Onyusheva & Baker, 2021).

Opportunities

Due to rising demand, the sector is always changing, which is good for companies seeking growth. Netflix benefits from the growing demand for OTT platforms. Here are some of the company's biggest market opportunities:

· Netflix's expansion may be aided by the market's increasing demand for OTT platforms.

· Since subscribers pay for Netflix's exclusive content, the company may make video games, comic novels, and more.

· Netflix is global. By partnering with local marketplaces, they may grow their subscriber base and dominate the local market (Onyusheva & Baker, 2021).

· The company can create better OTT concepts. Netflix focused on customer service before rejecting the advertising base.

Threats

For all the companies in the market, there are specific threats. The market has several OTT services, and the customers may choose based on their parameters. Therefore, excelling in almost all the possible parameters can be a solution to retain the position as the best. Even in that case, the companies may have to face the threats posed in the way of their expansion. As one of the biggest OTT companies, Netflix is not an exception. So, the threats and risks that Netflix is exposed to are:

· COVID-19 has affected the reproduction of new original shows and movies. Like most parts of the entertainment industry, Netflix is also affected by the pandemic. Gradually with normalization, the condition will improve (Onyusheva & Baker, 2021).

· The government regulations in certain countries can hold them from expansion.

· Netflix is suffering majorly from content piracy. Many people choose to watch the pirated version of the original series available without paying, threatening the company.

· Another reason for fewer customers for Netflix is that many people share one account simultaneously.

Competitive Analysis

The streaming video market is competitive. HBO, Fox 21st Century, and Disney will gain the most from the low entry hurdle. They offer video streaming or will shortly. All service providers use direct consumer subscriptions (monthly or annually) with no switching fees. Subscriptions cost $8 to $14. Therefore, pricing differences between suppliers are minimal (more in exhibit 4).

Businesses require interesting content to retain and attract users. Businesses compete intensely to license or manufacture popular media material. Amazon Prime rivals Netflix with 100 million subscribers. Amazon and Netflix spent $5 billion and $8 billion on programming in 2018 (Wu & Zhou, 2021). Amazon is the only major video streaming revenue earner (as of today). YouTube Premium has many users and produces original material. YouTube's subscription-based business failed two years after its launch. They're focusing on music streaming. The platform's founders' motivation might make it a niche video streaming competition. YouTube wants to spend less on content than Netflix and Amazon. Figure 4 shows competitor analysis.

Netflix spent $7.5b on licensed content in 2018. These apps are deleted. If their show is popular, the developer can negotiate a higher price or terminate their subscription. Netflix will suffer (please see exhibit 3 for five forces analysis).

Hulu's 20 million users and Direct TV trail Netflix. Hulu and Direct TV both broadcast live TV. Netflix's major U.S. competition is Amazon. Amazon and Netflix internalize marketing. Amazon is in 12 fewer countries than Netflix. Amazon bundles Amazon Music, discounts, and Prime for the same price (bundled with Prime). Amazon content is popular in various countries (Wu & Zhou, 2021). Amazon and Netflix have identical prices, video quality, and devices. They're moving away from third-party content and toward local content. Amazon has more financial resources than Netflix. Netflix's cash flow is negative due to content costs. Netflix leads, but Amazon is swiftly gaining ground; if Netflix doesn't polish its content strategy, it will be in jeopardy. Media and entertainment have written several company obituaries.

Marketing Plan

Netflix's marketing skills are well-known, from blockbuster shows to business partnerships. The next paragraph summarizes my marketing strategies for the company.

Homepage of the Brand

The brand's homepage, where new and returning customers can buy packs. Netflix's strengths can be:

· As a backdrop image, Netflix's trending episodes and movies. This page's main function will be to acquire visitors' email addresses, which enhances conversion rates. The company’s features will attract customers. Adding a call-to-action button would help the brand convert more visitors into paying subscribers.

Email Strategy

Email marketing is efficient and cost-effective. Netflix can send automatic emails to unpaid customers:

· Netflix can send an email to those who quit the registration process, inviting them to finish within a day (Bala & Verma, 2018).

· Customers can just click "Complete Registration" and begin the process.

· The brand can advertise by direct mail.

Corporate Social Responsibility, Sustainability, and Ethics Strategy

The first strategy is to emphasize sustainability. For example, introducing features such as Net Zero, which equals science-driven carbon reductions and natural power. As such, the organization will be emission-free by 2022.

The next move is adapting morals, standards, and ethics that are admired. In this regard, we will base the organization's code of conduct on CSR. This will entail a couple of things, and the first one is to handle potential or actual conflicts of interest in professional and personal relationships with integrity. Accordingly, the second one is making sure that the organization’s CSR reports are fair, complete, timely, understandable, and accurate.

References

Bala, M., & Verma, D. (2018). A critical review of digital marketing. M. Bala, D. Verma (2018). A Critical Review of Digital Marketing. International Journal of Management, IT & Engineering, 8(10), 321-339. https://ssrn.com/abstract=3545505

Onyusheva, I., & Baker, A. S. (2021). NETFLIX: A CASE STUDY ON INTERNATIONAL BUSINESS STRATEGY DEVELOPMENT. The Europeans: journal on global socio-economic dynamics, 6(31), 40-52. https://doi.org/10.35678/2539-5645.31.2021.40-52

Wu, X., & Zhou, J. (2021). The Influential Factors of Developing Better in the Global Stream Media Market: An Analysis of Netflix.