• External

1. What is Netflix?
2. Background
3. Financial Key data
4. Vision & Mission
5. Strategic Group Maps
6. PESTEL
7. 5-Forces
8. EFE
• Internal
1. Business Model Canvas
2. Value Chain Analysis
3. Resources Capability Analytics
4. VRIO Test
5. Competitive strength Assessment
6. IFE
1. What is Netflix?
•More people are cutting the cord and turning to streaming services for their film and television
content.
•Netflix remains the world's largest subscription streaming service with roughly 183 million paid
subscribers worldwide as of March 2020.
•The company's competition could steal market share—namely Amazon, whose Prime Video service
is cheaper and boasts 150 million subscribers
• The biggest competitor of Netflix is Prime Video, Amazon’s streaming service that started in 2006.
With 150 million subscribers in 200 territories, it holds 11% of the global SVOD market and it is the
second player behind Netflix, which has the largest share -71%- and more than 190 million users.
Prime Video generates annual revenues for $14 billion while Netflix has reported $15.8 billion in
2019.

3
2. BACKGROUND
NAME Netflix, Inc.
FOUNDED 1997
HEADQUARTERS Los Gatos, CA, USA
SIC CODE 7841
STATUS Public Company
Entertainment, Mass
INDUSTRY SECTOR Media
EMPLOYEES 7,100
TRADING SYMBOL NFLX

4
3. FINANCIAL PERFORMANCE in UCAN
market
in 2017-2019

https://www.sec.gov./
5
FINANCIAL PERFORMANCE in UCAN
market in 2020 updated
FINANCIAL PERFORMANCE
Primary sources of revenues:
• The Basic Plan: This is $8.99 per month and comes with very few
features. Subscribers can only stream on one device at a time, and it's
restricted to standard definition (SD).
• The Standard Plan: At $12.99 a month, this increases viewing to
high definition (HD) on two different screens.
• The Premium Plan: This plan is the highest one at $15.99 per month,
allowing subscribers to stream on four different screens
simultaneously in ultra HD.

7
 4. Vision and Mission Statement

Our core strategy is to grow our streaming membership business globally within the

parameters of our operating margin target. We are continuously improving our
. members’ experience by expanding our streaming content with a focus on a
programming mix of content that delights our members and attracts new members.
In addition, we are continuously enhancing our user interface and extending our
streaming service to more internet-connected screens. Our members can download
a selection of titles for offline viewing

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Netflix Values
As highlighted, on the Netflix career site its core values are:

• Judgment
• Communication
• Curiosity
• Courage
• Passion
• Selflessness
• Innovation
• Inclusion
• Integrity
• Impact
 This translates in five core actions:

• Encourage independent decision-making by employees

• Share information openly, broadly, and deliberately
• Are extraordinarily candid with each other
• Keep only our highly effective people
• Avoid rules
However, Netflix has negative cash flows as it invests massively on content
license agreements and original content.
Strategic Group Maps:

High Price
Low Price

Low Quality High Quality

 PESTEL
FACTORS Opportunity / Rating (1: Least Importance
Threat important - 5: Most ranking
important)
POLITICS T 5 1
US telecom giants AT&T have gone to the Federal Communications Commission to insist on stricter
usage regulations
ECONOMIC Customers spending budgets are tight O 4 5
SOCIAL In 2017, US Cable companies saw the steepest loss with 2.4% on record switching. O 3 10
SOCIAL Social trends are showing that many customers are moving to watch video content on their O 5 3
smartphones
TECHNOLOGY Netflix have put money into R&D to support 4K streaming efficiently O 4 9
TECHNOLOGY New software codenamed 'Hermes' which automatically grades a translation of a Netflix show. O 4 8
TECHNOLOGY The amount of data required to stream is a huge strain on customers broadband services. O 4 7
LEGAL Consumer lawsuit T 5 2
ENVIRONMENTAL Currently the company has been rated 'D' by an independent energy group for their lack of T 3 6
commitment to offset its carbon footprint.
ENVIRONMENTAL Look at solutions to lessen their carbon footprint T 3 4
NETFLIX’s INDUSTRY ANALYSIS 
USING PORTER’S FIVE FORCES
MODEL  Threat of
substitutes or
substitution

LOW

Competitive Bargaining power

Bargaining power
rivalry or of buyers or
of suppliers
competition customers
MODERATE
STRONG STRONG

Threat of new
entrants or new
entry

MODERATE -
STRONG
 EFE
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE
OPPORTUNITIES 0.55 2.05
customers spending budgets are tight 0.25 4 1.00
In 2017, US Cable companies saw the steepest loss with 2.4% on record switching. 0.10 4 0.40
Social trends are showing that many customers are moving to watch video content on their smartphones 0.05 4 0.20
Netflix have put money into R&D to support 4K streaming efficiently 0.05 3 0.15
new software codenamed 'Hermes' which automatically grades a translation of a Netflix show. 0.05 3 0.15
The amount of data required to stream is a huge strain on customers broadband services. 0.05 3 0.15
THREATS 0.45 1.35
US telecom giants AT&T have gone to the Federal Communications Commission to insist on stricter usage regulations 0.20 3 0.60
consumer lawsuit 0.10 3 0.30
Currently the company has been rated 'D' by an independent energy group for their lack of commitment to offset its carbon footprint. 0.10 3 0.30
look at solutions to lessen their carbon footprint 0.05 3 0.15
TOTAL 1 3.40
 BUSINESS MODEL CANVAS
Key Partners Key Activities Value Proposition Customer Customer Segments
• Acceptable price with Relationships males and females
Amazon Web service Tech development simple pricing Recommend content between the ages of 17-
Film maker and Self-made movies • Personalization (customized) 60 and households with
individuals Marketing & analytics • On-demand Apps with income levels of
Cinema, theaters Lisencing • No ads notifications for $30,000 and up
Film Festival • Content library reminding
Content partners User support By behavioral like
IP holders Key resources Channels viewing and browsing
Investors Talents Apps & websites websites (know what
Prizes Film festivals users view in the past)
Content creation Social media
Website
Network with film makers
and actors

Cost structure Revenue Streams

Marketing Subscription Fee
Copyright
holder, content
producer Netflix’s TV series and movies

Outbound Marketing and

Inbound Logistics Operation Services
Logistics Sales

Subscribers/Content
Consumers

Procurement Human Resource Management &

Infrastructure Technological Development

Corporate Strategic Management,

Information System, Algorithms
 Resources Capability Analytics

Category Group Factor Valuable Rare Inimitable Non-Substitutable

Film making equipment camera set up,… Yes Yes No Yes
Tangible Resources
Technologies Assets IP, computer, hosting, 4K Yes Yes No Yes
Network with actors, content holder Making their own movies Yes Yes Yes Yes
Intangible Resources Human resources for operation, sales, marketing and algorithm Yes Yes No No
Brand, Image and Reputational Assets brand building Yes Yes Yes Yes
 VRIO Test

Competitive Strength Assessment (VRIO)

Competitive Strength Assessment
(Rating Scale: 1: Very Week; 5: Very Strong)
Netflix Prime video Disney Hulu
Key success factors and strength measurements Importance Weight Strength Rating Weighted ScoreStrength Rating Weighted ScoreStrength Rating Weighted Score Strength Rating Weighted Score
Information technology assets 20% 5 1.00 4 0.80 4 0.80 3 0.60
Support and licenses from entertainment content creators and
copyright holders 15% 4 0.60 4 0.60 4 0.60 4 0.60
High equity of the brand 20% 5 1.00 5 1.00 4 0.80 4 0.80
Large platform of content producers and consumers 20% 4 0.80 5 1.00 4 0.80 3 0.60
High capacity for original content creation 20% 4 0.80 2 0.40 5 1.00 3 0.60
Network with film makers and actors 5% 5 0.25 4 0.20 5 0.25 3 0.15
Total 100% 4.45 4.00 4.25 3.35
IFE
IFE Matrix
Key Internal Factors Weight Rating Weighted Score
Strengths 0.60% 2.20%
Exponential Growth in the US 0.20% 4 0.80%
Originality with their own content 0.20% 4 0.80%
Adaptability with all channels like phone, destops, 0.10% 3 0.30%
Affordable Pricing with simple pricing strategies 0.05% 3 0.15%
Award-winning (brand reputation) 0.05% 3 0.15%
Weaknesses 0.40% 1.00%
Increasing Debt (April 2020, Netflix reported $14.17 billion in debt and plans to raise $1 billion
0.20% 2 0.40%
more through a debt offering)
Over-dependence on North America Market ( In the fiscal year 2019, Netflix reported $10.05
Billion revenue from North America, which represents about 50% of its total revenue ($20.15 0.10% 3 0.30%
Billion))
Growing Operational Costs (In 2019, the steaming cost was $14.61 Billion and the amount has
0.10% 3 0.30%
exceeded from the last year’s spending of $12.04 Billion)
Total 1.00% 3.20%
Sources
• https://www.investopedia.com/articles/markets/051215/who-are-ne
tflixs-main-competitors-nflx.asp#:~:text=There%20are%20several%20
different%20competitors,the%20cable%20channels'%20subscription
%20services
.
• https://whatcompetitors.com/netflix/