Netflix in 2012 Case Analysis
Session 3 Case Analysis
March 28, 2015
Professor Debra Hunter
Netflix in 2012: Can It Recover from Its Strategy Missteps?
The following case analysis follows the strategic moves of Netflix over its existence, specifically from 2011 to 2012. The specific matters discussed refer to some poor strategic decisions made by the company. Netflix made many decisions that turned out to be toxic to the company’s future. Moving from price changes to global expansion, the firm’s financial status was back and forth. Further analysis will identify key issues with strategy and allow for realization for better alternatives.
Netflix was founded in 1997 (Netflix, n.d., para. 1). The company started out with the idea of offering online movie rentals. Over time, the firm has grown to offer subscription services for online media streaming of movies and television shows, and DVD rental. The idea behind the services was to allow consumers more affordability and flexibility in renting videos. Consumers are able to pay a small monthly subscription fee to rent a specified amount of DVDs based on the plan for any desired length of time, without worrying about late fees (Thompson, Peteraf, Gamble, & Strickland, 2014, p. C-137).
Netflix also offers a streaming option for movie and TV shows. The service started out as metered but moved to a subscription for unlimited streaming (Thompson et al., 2014, p. C-137). The services also started out with rental and streaming as a combined subscription, but was separated in 2011. The options made available were DVD rental, or unlimited streaming, or both. Eventually, Netflix removed the subscription option for both plans and consumers had to sign up separately for both services if they so desired.
Netflix is a strong competitor in the online entertainment market. They appear to...