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Latest posts by Jonathan Kush (see all)

    Founded by Reed Hasting and Marc Randolph, Netflix is the biggest American media service provider and production company. The streaming giant has grown to become the biggest media streaming service in the world, with more than 183 million paid subscribers worldwide and viewership of at least 37% global internet users.As the biggest online streaming service globally, Netflix has been enjoying consistent growth during the last few years. But unlike rivals, it was the biggest beneficiary of the global lockdown and stay-at-home measures introduced all across the world following the onset of Covid-19. Global subscriber base during the first 3months of 2020 alone doubled. In the US alone, it added close to 7million new subscribers in the first quarter of 2020, compared to only 550,000 it added during the same quarter in 2019.

    As a result, Netflix is much better positioned for a post-COVID-19 world compared to rivals. Using SWOT, this report examine why even though rising competition looms large and content production costs remain a major weakness, the lasting legacy of covid-19 on streaming habits, in line with a continued shift to online/mobile streaming will play a key role in shaping the streaming battlefield, arguing that Netflix is in a much better shape to dominate compared to rivals.

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    Netflix Strategy Case Study


    Key Learning Outcomes

    By the end of the case, students should be able to:
    • Understand the major strengths and weaknesses of Netflix using the SWOT framework.
    • Use the SWOT analysis model to understand the role dynamic capabilities can play as critical bases of strengths to help firms take advantage of opportunities by analysing how Netflix has used key capabilities to take advantage of opportunities brought about by Covid-19 to create a world-class viewing experience.
    • Contrast arising opportunities with some of the emerging threats to understand where the streaming industry is heading, and whether Netflix can seize and reconfigure elements of its strengths and capabilities for corporate success in a post covid-19 world.

     

    1.0 INTRODUCTION


    Founded by Reed Hasting and Marc Randolph, Netflix is the biggest American media service provider and production company. The streaming giant has grown to become the biggest media streaming service in the world, with more than 183 million paid subscribers worldwide and viewership of at least 37% global internet users (Statista 2019a). Since its inception, the company has grown from strength to strength, with its revenue growing from USD$1.36 billion to around USD$15.8 billion over a 10-year period, while subscribers have grown from less than 22 million in 2011 to nearly 150 million in 2019 (Statista 2019). Revenue for the year ending 2019 was $20billion (Statista 2019b).

    Netflix revenue growth between 2011-2019

    In the following sections, we take a comprehensive look at some of Netflix's strengths, including core capabalities, its major weaknesses as well as arising opportunities and threats that it faces. Using SWOT, we delve deeper into the reasons why even though rising competition looms large and content production costs remain a major weakness, the lasting legacy of covid-19 on streaming habits, in line with a continued shift to online/mobile streaming will play a key role in shaping the streaming battlefield, arguing that Netflix is in a much better shape to dominate compared to rivals.

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