Netflix in 2012: Can It Recover from Its Strategy Missteps?

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Netflix in 2012: Can It Recover from Its Strategy Missteps?

Company Overview:
Netflix Corporation was established in 1997 by the current CEO, Reed Hastings alongside software executive, Mark Randolph. They are the world’s leading internet television network with over 57 million members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series, documentaries and feature films. Members can watch as much as they want, anytime, anywhere, on nearly any internet-connected screen. Additionally members can play, pause and resume watching, all without commercials or commitments.

The company was originally only a DVD--by--mail service in which the customer paid for a certain level of membership that determined how many DVD’s could be rented at one time. DVD’s were mailed to the customer and then returned by the customer when they were done watching. After a couple years in business, the company began including streaming services along with this. The goal here was to reduce costs by trying to get the subscribers to switch to streaming, which would reduce the costs incurred for postage and shipping with the mailed DVDs. By 2009, Netflix was offering a collection of 100,000 titles on DVD and had surpassed 10 million subscribers.

Strategic Challenges and Analysis:
Hastings developed a strategy which made Netflix the largest online subscription service for streaming entertainment in the world. Netflix’s strategy includes the following: * Providing customers with a wide selection of DVD titles to view. * Continually acquiring new content by establishing relationships with entertainment provider. * Provide easy to use technology for customers to use to order and identify what they wish to view. * Providing options for subscribers between streaming and mail services. * Aggressive spending…...

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