FACTORS

POLITICS

ECONOMIC
SOCIAL
SOCIAL

TECHNOLOGY
TECHNOLOGY
TECHNOLOGY
LEGAL
ENVIRONMENTAL
US telecom giants AT&T have gone to the Federal Communications Commission to insist on stricter
usage regulations
Customers spending budgets are tight
In 2017, US Cable companies saw the steepest loss with 2.4% on record switching.
Social trends are showing that many customers are moving to watch video content on their
smartphones and due to Covid 19, more people will stay at home and post Covid they are waiting
for something live and interactive like broadcast programs for watching
R&D to support 4K streaming efficiently
New software for translation of movies
The amount of data required to stream is a huge strain on customers broadband services.
Consumer lawsuit
Lack of commitment to offset its carbon footprint.
Opportunity / Rating (1: Least Importance
Threat important - 5: Most ranking
important)
T 5 1

O 4 5
O 3 10
O 5 3

O 4 9
O 4 8
O 4 7
T 5 2
T 3 6
 FACTORS

New entrance

Power of Suppliers

Power of Buyers

Threats of Substitute Products

Competitive Rivalry
Rating 1
2
3
4
5
 SUPPORTING INFO
Barriers to entry are high for a new entrant
The threat of new entrants is a very real and serious issue for Netflix with an increasing number of organisations deciding to la
For established organisations in the entertainment industry, the barriers to entry are fairly low
Suppliers have the choice to switch
Viewers still want to watch their old favorite movies instead of Netflix original content
That being said, Netflix is in its own right an accomplished and trusted producer of content now; therefore the power of altern

The power of viewers will continue to rise because of the increasing number of streaming services being launched
The industry is not very price-sensitive

The power of buyers cannot be underestimated here, with viewers now having the choice to watch whatever they want if the
look on a accounts
YouTube competitors
for asite for part
large something
of totalelse.
videoAlso, as stated
viewing previously
as 12% with
of all time content
spent moving
watching to other
video suppliers,who
is on YouTube, it is only
offernatu
live
With traditional broadcast television on the decline, especially among young adults, who are switching to subscription video s

Viewers can switch to Tiktok (free) to watch short/trending videos instead of watching movies.

In order to expand its offering, Amazon Prime not only gives you access to their video streaming services, but many other ben
Competitive rivalry is high is for Netflix. While competitors such as Amazon can offer additional services for customers' subscri
from Netflix to show on their own platforms.

Low
Low - Moderate
Moderate
Moderate - Strong
Strong
RATING NOTE SUM UP Note
1 LOW Low - barriers for who doesn't already produce their own v
5 STRONG MODERATE - the size of these organisations also means initial costs for t
STRONG
5 STRONG as they will be able to immediately launch the service with
5 STRONG With more and more production companies launching thei
3 MODERATE In October 2018, Netflix original content accounted for just
MODERATE
3 MODERATE

Viewers are not tied into contracts, so many viewers are pa

5 STRONG
5 STRONG As all the services are priced at very similar rates, viewers w
5 STRONG STRONG

2 LOW-MODERATE
1 LOW LOW Bargainin
2 LOW-MODERATE
power o
5 STRONG
suppliers
5 STRONG STRONG
MODERA
 oesn't already produce their own video content, due to the extremely high investments needed in either producing new content or acquirin
ations also means initial costs for technology and marketing would not be an issue. While many customers will have multiple subscriptions
Threat of
mmediately launch the service with their own content and can already have a fan base for the organisation as a whole or for a specific serie
oduction companies launching their own VOD services, substitutes
some of Netflix'sor
most-watched content will soon disappear. For example, the forev
substitution
original content accounted for just 37% of Netflix US streams, although this is up from 17% in January 2017 according to video-measureme

o contracts, so many viewers are paying on a monthly basis with the option to cancel subscriptions at any time, thereby putting even more
LOW
iced at very similar rates, viewers will mainly focus on the quality of content. As of January 2020, a single subscription costs $12.99 for Netf

Bargaining Competitive Bargaining

power of rivalry or power of buyers
suppliers competition or customers

MODERATE STRONG STRONG

Threat of new
entrants or new
entry

MODERATE -
STRONG
ducing new content or acquiring content from big players.
will have multiple subscriptions, there will no doubt come a time where subscribing to so many services is no longer viable so they may decid
s a whole or for a specific series.
appear. For example, the forever popular 90's sitcom Friends will be removed from Netflix in 2020 and instead move to HBO's very own stre
according to video-measurement firm 7Park Data. So, while the popularity of Netflix original content is certainly on the rise, viewers still en

me, thereby putting even more power into the hands of the consumer.

bscription costs $12.99 for Netflix, Amazon Prime $8.99, Hulu $5.99 and Disney+ $6.99 a month.
onger viable so they may decide to close their accounts.

d move to HBO's very own streaming service. This is unlikely to be the only big-name Netflix will lose, therefore increasing the risk of power
inly on the rise, viewers still enjoy watching their old favourites such as Friends and The Office US.
re increasing the risk of power of suppliers.
KEY EXTERNAL FACTORS
OPPORTUNITIES
Customers spending budgets are tight
US Cable companies saw the steepest loss with 2.4% on record switching.
Social trends are showing that many customers are moving to watch video content on their smartphones
R&D to support 4K streaming efficiently
New software for translation of movies
More nominations from movie awards (like Emmys and Oscars) for streaming movies
Social media is the trend to advertise new original movies in streaming services with low costs
More actors want to participate in orginal movies to be on streaming servies due to Covid-19 limiting the theater
Covid-19 making people stay at home and watch streaming movies and it will become a habit post pandemic
More legal and laws for leaked movies to be deleted and fined in the internet
The amount of data required to stream is a huge strain on customers broadband services
THREATS
US telecom giants AT&T have gone to the Federal Communications Commission to insist on stricter usage regulations
Consumer lawsuit
Viewers are still in need to watch old movies rather original contents
Lack of commitment to offset its carbon footprint.
TOTAL
WEIGHT RATING WEIGHTED SCORE
0.55 1.99
0.25 4 1.00
0.05 4 0.20
0.03 4 0.12
0.03 3 0.09
0.03 3 0.09
0.03 2 0.06
0.05 4 0.20
0.01 2 0.02
0.01 2 0.02
0.01 4 0.04
0.05 3 0.15
0.45 1.35
0.20 3 0.60
0.15 3 0.45
0.05 3 0.15
0.05 3 0.15
1 3.34
Netflix Amazon

Netflix is one of the biggest

contributors to the cord-cutting
phenomenon. This is when
consumers forgo traditional cable
network TV in favor of an As of the fourth quarter of 2019, Amazon Prime
Video had about 150 million subscribers—a
alternative—usually streaming
number that's been growing at a fast pace over the
services. This phenomenon is past two years as the company has increased
helping Netflix crush its production of its original content.
competition for one simple
reason: The company is providing
quality original content at an
affordable price.

Netflix is available to consumers

through its app, smart TVs, game
consoles, streaming media
players, and Amazon's Fire TV.
The company had about 183
million paid subscribers across
the globe at the end of the first
quarter of 2020. This represents a
year-over-year subscription
growth of 22.8%. Netflix is
predicting membership growth will
continue in the second quarter of
2020, with the company
forecasting an increase of 25.6%
for the quarter.
If you're an avid Amazon customer, you're
probably going to benefit from its Prime
membership, which offers free two-day
shipping for purchases as well as the
streaming subscription rolled in. The cost for
this membership is $119 per year or $12.99 if
you pay monthly. The subscription costs
much less if you're a student: $59 per year or
$6.49 per month.
If you're looking at going solo and getting the
streaming service on its own, you can expect
to pay $8.99 per month—the same cost of
Netflix's basic plan, and much less than its
premium subscription.

Netflix makes money by offering a

different range of viewing options
from country to country. The
company is constantly cycling
through titles every month. The Prime Video offers subscribers access to
options range from feature films, thousands of titles, ranging from feature films,
documentaries, anime, and documentaries, to television. Like its rival
television shows, including Netflix- Netflix, Amazon Prime also has its own
produced original titles. Some of original films and series including The
the company's most famous titles Marvelous Mrs. Maisel and Tom Clancy's
include Stranger Things and Jack Ryan. The service is available through
Orange Is the New Black. And the the Prime Video app, through smart TVs,
list keeps growing. game consoles, streaming media players, and
Amazon's Fire TV.
Hulu Disney

There's been a lot of hype around the

The big news for Hulu came in May 2019 with the
announcement of a deal between Comcast and
Disney which had Disney purchasing Comcast's
stake in Hulu for a reported $5.8 billion. This puts
Disney in full control of Hulu and consolidates the
competition as Disney makes a big push into the
streaming services field.
streaming service offered by Walt Disney.
Disney+ is an on-demand, commercial-free
service which houses the entire library of
Disney movies along with original Disney TV
series. Included in the library are titles from
Pixar, Marvel, features from the Star Wars
enterprise, as well as National Geographic
options. If that's not enough, the service also
includes every season of The Simpsons and
21st Century Fox films. Subscribers get
unlimited downloads to watch wherever and
whenever they choose.

Hulu's numbers are much less than those who

subscribe to Netflix and Amazon. Hulu hit 30.4
million subscribers by the end of 2019.

Hulu offers a growing number of options and add- Netflix and Disney had an exclusive
ons. Hulu offers four levels of subscription plans: relationship, at least until the studio decided to
basic, premium (no ads), basic plus live TV, and jump into the streaming war. When Disney
premium plus live TV. As of March 2020, monthly announced it was going to launch its own
prices start as low as $5.99 for Hulu and $54.99 for service, it ended the deal it had with Netflix.
Hulu + Live TV. For an additional fee, the company Netflix offered a number of titles from the
offers premium add-ons, such as HBO, Cinemax, studio but agreed to cut them all from its lineup
and Showtime. You can purchase subscription in 2019.
bundles from Hulu that include Disney+ and
ESPN+. As of May 2020, package subscriptions to
Disney+, Hulu, and ESPN+ cost $12.99 per
month. Subscriptions to just Disney+ cost
$6.99 per month or $69.99 per year
in ppt
3 maps done
in ppt
 30%
35%
Content Flatform Streaming

Produce
New Movie Development - Maintenance
25% Algorithm content (Streaming Flatform)
proposed to end
Movie Rights consumer 10%
& TV Shows 5% Maintenance
Purchase Development -
(Subscription
10% Streaming speed
maintenance)
Streaming Quality

Produce
New Movie

Sound track Supp

Actor management H
Film maker
Devices Affairs a
Subbing and subbing Data man
Translation Marketing & Distrib
Streaming devices and servers Payme
Assessment for children content
Streaming devices and servers Payme
Assessment for children content
ming
Sales CSM - Data
Promotion Collection
10% 5% Primary
enance activities
g Flatform)
10% Trial (30 days)
5%

enance
scription
enance) 5%

15%

Supporting activities
HRM, CRM Supporting
Legal activities
Affairs and communication
Data management & analysis
Marketing & Distribution channel management
Payment & Accounting
Payment & Accounting
imary
tivities

ting
ies
 Category Group Factor Valuable
Film making equipment camera set up,… Yes
Tangible Resources
Technologies Assets IP, computer, hosting, 4K Yes
Network with actors, content holder Making their own movies Yes
Intangible Resources Human resources for operation, sales, marketing and algorithm Yes
Brand, Image and Reputational Assets brand building Yes
Rare Inimitable Non-Substitutable
Yes No Yes
Yes No Yes
Yes Yes Yes
Yes No No
Yes Yes Yes
IFE Matrix
Key Internal Factors Weight
Strengths 0.5
Exponential Growth in the US 0.05
Originality with their own content 0.05
Adaptability with all channels like phone, destops 0.05
Algorithm helps to customise the usage of viwers like what last movies they saw and recommen 0.05
Move back and forth in the movies unlike in the cable movies 0.05
Great network with content owner and actors 0.05
Userface of apps are friendly and attractive with good designs and simple to use 0.05
Top of mind brand in user's minds 0.05
Affordable Pricing with simple pricing strategies 0.05
Award-winning (brand reputation) 0.05
Weaknesses 0.5
No broadcasting content to attract customers who are fans of watching live sport 0.2
events/breaking news reports
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
Billion)) 0.1
Lack of Green Initiatives 0.05
Not fully owning the copyrights and therefore some movies are available for all channels 0.05
Growing Operational Costs (In 2019, the steaming cost was $14.61 Billion and the amount has
exceeded from the last year’s spending of $12.04 Billion) 0.1
Total 1
Rating Weighted Score
1.8
4 0.2
4 0.2
3 0.15
4 0.2
4 0.2
3 0.15
4 0.2
4 0.2
3 0.15
3 0.15
1.2
2 0.4

3 0.3

2 0.1
2 0.1
3 0.3
3
VRIO

(R
Importance Strength Netflix
Key success factors and strength measurements Weight Rating
Information technology assets 20% 5
Support and licenses from entertainment content creators
and copyright holders 15% 4
High equity of the brand 5% 5
High capacity for original content creation 15% 4
All in one functions and program options for viewers 5% 4
Interaction with viewers by broadcasting programs 15% 3
Company culture and talents 5% 4
Good financial management 5% 4
Network with film makers and actors 15% 5
Total 100%
 Competitive Strength Assessment
(Rating Scale: 1: Very Week; 5: Very Strong)
Netflix Prime video
Strength Strength Disney Strength Hulu
Weighted Score Rating Weighted Score Rating Weighted Score Rating
1.00 4 0.80 4 0.80 3

0.60 4 0.60 4 0.60 4

0.25 5 0.25 4 0.20 4
0.60 2 0.30 4 0.60 3
0.20 4 0.20 5 0.25 3
0.45 3 0.45 5 0.75 3
0.20 4 0.20 4 0.20 4
0.20 4 0.20 5 0.25 4
0.75 4 0.60 5 0.75 3
4.25 3.60 4.40
Hulu
Weighted Score
0.60

0.60
0.20
0.45
0.15
0.45
0.20
0.20
0.45
3.30
 QSPM Factors Weight Market Development
Strengths 0.5 AS
Exponential Growth in the US 0.05 4
Originality with their own content 0.05 4
Adaptability with all channels like phone, destops 0.05 3
Algorithm helps to customise the usage of viwers like what last movi 0.05 3
Move back and forth in the movies unlike in the cable movies 0.05 3
Great network with content owner and actors 0.05 3
Userface of apps are friendly and attractive with good designs and simp 0.05 4
Top of mind brand in user's minds 0.05 4
Affordable Pricing with simple pricing strategies 0.05 3
Award-winning (brand reputation) 0.05 3
Weaknesses 0.5
No broadcasting content to attract customers who are fans of
watching live sport events/breaking news reports 0.2 3
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 Billion)) 0.1 3
Lack of Green Initiatives 0.05 2
Not fully owning the copyrights and therefore some movies are
available for all channels 0.05 3
Growing Operational Costs (In 2019, the steaming cost was $14.61
Billion and the amount has exceeded from the last year’s spending of
$12.04 Billion) 0.1 3
TOTAL IFE FACTORS 1
Opportunities 0.55
Customers spending budgets are tight 0.25 4
US Cable companies saw the steepest loss with 2.4% on record switchi 0.05 4
Social trends are showing that many customers are moving to watch vi 0.03 4
R&D to support 4K streaming efficiently 0.03 3
New software for translation of movies 0.03 3
More nominations from movie awards (like Emmys and Oscars) for str 0.03 3
Social media is the trend to advertise new original movies in streaming 0.05 3
More actors want to participate in orginal movies to be on streaming ser 0.01 3
Covid-19 making people stay at home and watch streaming movies and i 0.01 3
More legal and laws for leaked movies to be deleted and fined in the int 0.01 2
The amount of data required to stream is a huge strain on customers b 0.05 3
Threats 0.45
US telecom giants AT&T have gone to the Federal Communications Commi 0.20 3
Consumer lawsuit 0.15 3
Viewers are still in need to watch old movies rather original contents 0.05 3
Lack of commitment to offset its carbon footprint. 0.05 3
TOTAL EFE FACTORS
TOTAL QSPM

AS = Attractive Score
1 = Low Attractive Score
4 = High attractive Score
Market Development Product Development Diversification
TAS AS TAS AS TAS
0.2 4 0.2 4 0.2
0.2 4 0.2 4 0.2
0.15 4 0.2 3 0.15
0.15 4 0.2 4 0.2
0.15 4 0.2 4 0.2
0.15 3 0.15 4 0.2
0.2 4 0.2 4 0.2
0.2 4 0.2 4 0.2
0.15 3 0.15 4 0.2
0.15 4 0.2 4 0.2
0 0

0.6 3 0.6 3 0.6

0.3 3 0.3 3 0.3

0.1 2 0.1 2 0.1

0.15 4 0.2 4 0.2

0.3 3 0.3 3 0.3

3.15 3.4 3.45

1 4 1 4 1
0.2 4 0.2 4 0.2
0.12 4 0.12 4 0.12
0.09 3 0.09 4 0.12
0.09 4 0.12 4 0.12
0.09 3 0.09 4 0.12
0.15 3 0.15 4 0.2
0.03 3 0.03 4 0.04
0.03 3 0.03 3 0.03
0.02 2 0.02 4 0.04
0.15 4 0.2 3 0.15

0.6 3 0.6 3 0.6

0.45 3 0.45 3 0.45
0.15 3 0.15 3 0.15
0.15 3 0.15 3 0.15
3.32 3.4 3.49
6.47 6.8 6.94
 QSPM Factors Weight Market Development
Strengths 0.5 AS
Exponential Growth in the US 0.05 4
Originality with their own content 0.05 4
Adaptability with all channels like phone, destops 0.05 3
Algorithm helps to customise the usage of viwers like what last movi 0.05 3
Move back and forth in the movies unlike in the cable movies 0.05 3
Great network with content owner and actors 0.05 3
Userface of apps are friendly and attractive with good designs and simp 0.05 4
Top of mind brand in user's minds 0.05 4
Affordable Pricing with simple pricing strategies 0.05 3
Award-winning (brand reputation) 0.05 3
Weaknesses 0.5
No broadcasting content to attract customers who are fans of
watching live sport events/breaking news reports 0.2 3
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 Billion)) 0.1 3
Lack of Green Initiatives 0.05 2
Not fully owning the copyrights and therefore some movies are
available for all channels 0.05 3
Growing Operational Costs (In 2019, the steaming cost was $14.61
Billion and the amount has exceeded from the last year’s spending of
$12.04 Billion) 0.1 3
TOTAL IFE FACTORS 1
Opportunities 0.55
Customers spending budgets are tight 0.25 4
US Cable companies saw the steepest loss with 2.4% on record switchi 0.05 4
Social trends are showing that many customers are moving to watch vi 0.03 4
R&D to support 4K streaming efficiently 0.03 3
New software for translation of movies 0.03 3
More nominations from movie awards (like Emmys and Oscars) for str 0.03 3
Social media is the trend to advertise new original movies in streaming 0.05 3
More actors want to participate in orginal movies to be on streaming ser 0.01 3
Covid-19 making people stay at home and watch streaming movies and i 0.01 3
More legal and laws for leaked movies to be deleted and fined in the int 0.01 2
The amount of data required to stream is a huge strain on customers b 0.05 3
Threats 0.45
US telecom giants AT&T have gone to the Federal Communications Commi 0.20 3
Consumer lawsuit 0.15 3
Viewers are still in need to watch old movies rather original contents 0.05 3
Lack of commitment to offset its carbon footprint. 0.05 3
TOTAL EFE FACTORS
TOTAL QSPM

AS = Attractive Score
1 = Low Attractive Score
4 = High attractive Score
Market Development Product Development Diversification
TAS AS TAS AS TAS
0.2 4 0.2 4 0.2
0.2 4 0.2 4 0.2
0.15 4 0.2 3 0.15
0.15 4 0.2 4 0.2
0.15 4 0.2 4 0.2
0.15 4 0.2 4 0.2
0.2 4 0.2 4 0.2
0.2 4 0.2 4 0.2
0.15 3 0.15 4 0.2
0.15 4 0.2 4 0.2
0 0

0.6 4 0.8 3 0.6

0.3 3 0.3 3 0.3

0.1 2 0.1 2 0.1

0.15 4 0.2 4 0.2

0.3 3 0.3 3 0.3

3.15 3.65 3.45

1 4 1 4 1
0.2 4 0.2 4 0.2
0.12 4 0.12 4 0.12
0.09 3 0.09 4 0.12
0.09 4 0.12 4 0.12
0.09 4 0.12 4 0.12
0.15 3 0.15 4 0.2
0.03 3 0.03 4 0.04
0.03 3 0.03 3 0.03
0.02 3 0.03 4 0.04
0.15 4 0.2 3 0.15

0.6 3 0.6 3 0.6

0.45 3 0.45 3 0.45
0.15 3 0.15 3 0.15
0.15 3 0.15 3 0.15
3.32 3.44 3.49
6.47 7.09 6.94
 Internal Strategic Position
Competitive (CA)
(-6: worst, -1: best)
Market Share -2
Product Quality -2
Exclusive content -1
Axis X

Adaptibilty and customisation for user's benefits -2

Brand's reputation in streaming services -1
Competitor’s Capacity Utilization -1
Technological knowhow -1
Award-winning in movie's industries (for orginal til -1
Average -1.38
Total X score: 1.75
Financial (FS)
(+1: worst, +6: best)
Return on investment 3
Leverage liquidity 2
Axis Y

Capital Required/Available 3
Cash Flow 2
Ease of exit from market 2
Risk involved in business 2

Average 2.33
Total Y score: -0.67
 External Strategic Position
Industry (IS)
(+1: worst, +6: best)
Growth potential 3
Social trend in moving into online usage 3
Financial Stability 2
Technological know how 4
Network with film makers and actors 4
US cable TV decrease 3
More legal to fine the unlicensed movies 2
Productivity 4
Average 3.13
1.75
Environmental (ES)
(-6: worst, -1: best)
Consumer lawsuit -3
Competitors with Cable TV -3
Customer's habits to watch old TV rathe -3
Prices of competing products -3
Barriers to entry into market -5
Competitive pressure -2
Price elasticity of demand -2
Average -3.00
-0.67