SMS-416

Chapters-4 & 11
Netflix and Facebook

Facilitator: Ramy Taraboulsi

1
 What are we covering today?
 History of Netflix
 How does Netflix make money?
 Netflix and Porter’s Competitive Forces
 History of facebook
 facebook network effects
 Privacy issues facing
facebook
 facebook and Tencent
 Why are companies now boycotting facebook?

2
How did Netflix Change TV?

3
 Group Exercise: Blockbuster and
Netflix
 Blockbuster had the chance to invest in Netflix, but
it declined this opportunity
 Within your groups review the potential reasons for
Blockbuster’s decision.
 Other than investing in Netflix, what could they
have done
instead?
 Present your
findings.

4
How does Netflix earn its
revenue?

5
Rise and Fall and Rise and Fall
of Netflix Stock Price

6
 Porter’s Five Forces
in the Competitive Marketplace

7
 Group Exercise: Netflix
 You were hired as a
consultant to set up the
future strategy for Netflix
 You decided to use
Porter’s five forces to
conduct your analysis
 Break into groups and
identify two things:
o The forces at play related to Netflix
o What Netflix needs to do related to each of these forces
8
How did Facebook Rise?

9
Network Effects Example:
Facebook

10
 Facebook: Growth by
Acquisition
 Total: 72 acquisitions
 Top Acquisitions over $40M:
o 2009: FriendFeed - $49M
o 2010: Friendster - $40M
o 2011: Snaptu - $70M
o 2012: Instagram - $1B
o 2012: Facetime - $100M
o 2013: Atlas - $100M
o 2013: Parse - $85M
o 2014: Whatsapp - $19B
o 2014: Oculus - $2B
o 2014: Liverail - $500M
o 2015: Pebbles - $60M
o 2018: RedKix - $100M
o 2019: Playgiga - $70M
 The risk is the possibility of breaking out the acquisitions
11
 Facebook: Privacy
and Cambridge Analytica

12
Group Exercise: If China is opened,
could Facebook compete against
Tencent?

13
What is Facebook Libra?

14
The Boycotting of Facebook

15
 Open Book Questions
 This is a group assignment
 You need to write a report that
discusses the competitive
position of facebook.
 Start by identifying the different
operating divisions of the
company
 For each division of the company, apply the Porter
competitive forces model, and for each of the five forces,
determine examples of the these forces and the actions
that facebook should take to protect itself against these
forces
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