In this project thesis a SWOT analysis will be performed on the media company Netflix, Inc. Netflix is the world’s leading internet entertainment service with over 109 million members in over 190 countries. It ranks place 28 in 2017’s list of the top 100 world’s largest media companies. The success of Netflix has increased constantly in recent years. The reason for this is the evolution of media consumption. The new generation watches series and movies on streaming platforms like Netflix and no longer on television.
People have become more independent and can decide for themselves when and where they want to follow their series and movies. Netflix’s influence grew in the past but the fight about the TV has not started yet. One day in the near future it will commence, and Netflix needs to be prepared for that. In this project thesis a detailed analysis of the strengths, weaknesses, opportunities and threats of Netflix will be conducted.
The special challenge for Netflix is to have a good plan as soon as the cable TV programmes try to attack. Different possibilities of offering better and more customer-oriented content will be analysed. Will Netflix eventually replace the traditional television as we know it and become the number one provider for streaming services? This project thesis will analyse the current situation and in the end a recommendation for Netflix’ future will be given.
Table of Contents
1. Introduction
2. Definition and methodology of SWOT
2.1 The SWOT matrix
2.1.1 SWOT combination and norm strategy
2.1.2 Benefits and limits
2.1.3 Preparation and execution
3. Presentation of Netflix
3.1 Offering and subscription variety
3.2 Business model
3.3 Management
3.4. Corporate and employee culture
4. Presentation of the Video-on-Demand market
4.1 Video-on-Demand market in Germany
5. SWOT analysis and matrix for Netflix
5.1 Strengths
5.2 Weaknesses
5.3 Opportunities
5.4 Threats
6. SWOT strategy
6.1 Strengths and Opportunities
6.2 Weaknesses and Opportunities
6.3 Strengths and Threats
6.4 Weaknesses and Threats
7. Conclusion of strategy
8. Critical reflection
9. Conclusion
Project Goals and Thematic Focus
The primary objective of this project thesis is to perform a comprehensive SWOT analysis of the media company Netflix, evaluating its strategic positioning within the global video-on-demand market. The research investigates how Netflix utilizes its internal strengths to address external challenges and capitalize on emerging market opportunities to maintain its leadership status in the streaming industry.
- Examination of Netflix’s historical development and current business model.
- Strategic analysis of the global Video-on-Demand market landscape.
- Application of the SWOT matrix to identify key internal and external factors.
- Development of integrated strategic recommendations based on SO, WO, ST, and WT combinations.
- Critical reflection on the limitations and future potential of Netflix's growth strategy.
Excerpt from the Book
3.2. Business Model
The target audience of Netflix includes women and men aging between 17 and 60 and households with an income of $30.000 or more. In terms of psychographic, users are divided into three different groups. Netflix gives them legal access to a movie and TV show with a personalised suggestion algorithm, all without interruption through advertising.
The Business segment of Netflix consists of 'domestic streaming', 'international streaming' and 'domestic DVD' (digital versatile disc). The domestic streaming segment includes users from the United States. The monthly subscription fees refer to services that consist solely of streaming content. The international streaming segment also refers to the monthly membership fees for streaming services of members who are not from the united states. The last segment is the domestic DVD segment, which focuses exclusively on monthly subscription fees for DVD by mail services inside the USA. (cf. Netflix Annual Report, 2016)
Netflix’ revenues are unevenly distributed among the three segments. The table below shows that most of the revenue in 2017 was generated by the domestic streaming segment with $4,522,751 billion. With international streaming, they generated $3,538,862 billion. The smallest revenue was generated with domestic DVD with $345,345 million. (cf. Pahwa, 2017; cf. Netflix Annual Report, 2016)
Summary of Chapters
1. Introduction: Outlines the historical context of the SWOT analysis and justifies the application of this method to analyze Netflix's strategic position.
2. Definition and methodology of SWOT: Provides the theoretical background of the SWOT matrix and explains the procedural approach for identifying internal and external success factors.
3. Presentation of Netflix: Details the company’s history, subscription models, management structure, and the organizational culture that drives its success.
4. Presentation of the Video-on-Demand market: Analyzes the market structures, business models, and growth trends within the global and German Video-on-Demand industry.
5. SWOT analysis and matrix for Netflix: Lists the specific internal strengths and weaknesses, as well as external opportunities and threats identified for Netflix.
6. SWOT strategy: Conducts a strategic synthesis by combining internal and external factors to develop actionable SO, WO, ST, and WT strategic approaches.
7. Conclusion of strategy: Summarizes the strategic implications and provides a cohesive outlook on how Netflix can leverage its findings to ensure future competitiveness.
8. Critical reflection: Discusses the author's research process, challenges encountered during the analysis, and personal learnings from the project work.
9. Conclusion: Synthesizes the core findings and offers a concluding assessment of Netflix’s future market potential.
Keywords
Netflix, SWOT analysis, Video-on-Demand, Streaming, Strategic Management, Digital Media, Business Model, Market Expansion, Subscription, Content Strategy, Binge Watching, Competitive Advantage, Virtual Reality, Innovation, Media Consumption
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on a strategic SWOT analysis of the media company Netflix, examining how internal resources and environmental factors interact to shape the company's success in the global market.
Which key areas are analyzed in this research?
The research explores Netflix’s business model, its corporate culture, the competitive landscape of the Video-on-Demand market, and the strategic implementation of growth measures.
What is the primary goal of the SWOT analysis here?
The goal is to determine how Netflix can leverage its strengths to capitalize on opportunities, while simultaneously minimizing the impact of internal weaknesses and external market threats.
Which methodology is employed in the work?
The study utilizes the traditional SWOT analysis framework, further developing it into combined strategies (SO, WO, ST, WT) to generate specific management recommendations.
What topics are covered in the main section?
The main part covers the historical development of Netflix, an evaluation of the VoD market in Germany and globally, a detailed SWOT matrix, and a breakdown of strategic combinations.
How is the thesis characterized by its keywords?
The work is defined by terms such as streaming, business model, content strategy, and digital media, highlighting its emphasis on modern media management.
How does Netflix manage its revenue streams across different segments?
Netflix divides its revenue into three main segments: domestic streaming, international streaming, and domestic DVD services, with streaming constituting the largest revenue share.
What role does the 'Binge Watching' phenomenon play in Netflix's strategy?
It is treated as a critical element of content consumption that Netflix promotes to maintain user engagement and expand its customer base, despite the challenges it poses to production quality and debt management.
- Quote paper
- Emmy Bethmann (Author), 2018, SWOT analysis of Netflix, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/590460
