Ma. Theresa A.

Aclan StratBusAnl 10:00-11:30 TTH

45022 August 23, 2021

1. Make a SWOT and PEST analysis of Netflix, Inc.

Strengths Weaknesses
 Strong brand reputation  Limited contents/copyright
 High Adaptability  Weak internet connection
 Established market share  High Data Usage
 Quality content  Rising cost for innovation

Opportunities Threats
 Large market  Increasing number of competitors
 Availability for high internet speed  Cheap price from other businesses
 Ownership of contents  Fake accounts/Illegal downloads

PEST ANALYSIS
Political (Government rules and policies) – this made the entire content of Netflix not to be available in
certain countries. China is one of the example. Censorship has been the issue in the country.
Economic (Fluctuating exchange rates for contents) - some content holders does not have fixed rate
for their contents. The cost would affect the pricing of subscriptions. Netflix can earn high profit from
their own contents.
Social (Preferences of Consumers) – some subscriber are looking for regional contents that is why Netflix
is trying to customize versions of their services according to the country where it would be offered. This
is an additional costs for the company.
Technological – (High Quality Video) – Netflix have done the innovation on their content services than
other competitors. Their videos are available in 4k and Ultra HD.

2. Did Netflix underestimate the pushback from their price increase?

I don’t think Netflix had underestimated the pushback on their price increase. It is expected that any
price increase would make the buyer hesitant before purchasing a product. Netflix is fully aware of what
would be the reaction of their subscribers.

3. Did Netflix underestimate the bad publicity from their new pricing structure?

Bad publicity may cause troubles for businesses but Netflix have done some actions to retain the
stability of their company. Their pricing structure may be unlikable at first glance for the consumers but after
a certain period they have regain those who unsubscribed thru giving best contents.

4. Did Netflix underestimate the number of subscription cancellations that resulted from their new pricing
structure?

Again, Netflix did not underestimate their decreasing subscribers. New pricing structure might have
affected the numbers of subscriptions but since Netflix is subscriber-hungry they make sure that those losses
will be exchanged with additional subscription thru global expansions.
5. Is Netflix actually correct in moving from mail order distribution to online streaming?

It is the right action to do in the first place since mail orders are getting out of trend and the costs of
performing operations like this are high. With the online streaming, it would be convenient on the customer’s
end while it will be efficient for Netflix since streaming requires less resources cost.

6. Did Netflix implement too quickly?

I think they have implemented a little ahead of the popularity of internet but their action helped them
in establishing a name under the streaming services against other competitors. They have put barriers for
potential entrants since they have owned majority of market share in entertainment industry.

7. Can Netflix compete with Amazon Prime?

NETFLIX AMAZON PRIME

Supports wide range of devices Most of gaming consoles does not support Amazon
Prime Video
Provides limited downloads No limit for downloads
Broadcast 4k and HDR content Fails to play HD content on low internet speed
Has extensive library Isn’t as extensive compared to Netflix
Includes variety of subscriptions but with increasing Only 1 category of subscriptions
amount per type of plan

Netflix can definitely compete with Amazon Prime when it comes to services. The cost of subscription may
be higher in Netflix than Amazon but the benefits will surely outweigh the cost. Amazon Prime is also accessible
in only in 20 different countries while Netflix have been streaming on 119 countries of today.