Strategic Analysis of NETFLIX

The company keeps updating its stock of movies depending upon the ratings received from the customers.Special Arrangement with Postal Department: Netflix has been managing the dispatch and receipt of DVDs quite efficiently with US postal services, by way of a special arrangement, which is helping the company not only in speedy delivery of the consignment by in saving some money on postal services as well.Not enough emphasis on technology: While the online community is growing very fast around the world, Netflix continues to lay the emphasis on physical exchange in DVD format. This could prove quite challenging for the company if the speed of download increases in the next couple of years. The company would, therefore, have to explore the movie download market for long term survival.The emergence of Bly Ray: Though the blue-ray disk market still appears hazy on account of discussion still going on about the fate of this new technology. But the fact that Netflix has started exploring this market as well bodes well for the company in the long run1.Growth in the online rental market: The online DVD rental market has seen fast growth in recent years. Datamonitor (2007) further projects that by 2010, the US DVD sales and rentals market is expected to grow to around $35 billion from $26.8 billion in 2005.Investment in online delivery: Though Netflix has been predominantly concentrating on the physical medium, there are some indications suggesting that seeing the high growth in broadband population, Netflix has started working to this end. This step, if taken with due consideration towards all aspects, will certainly go a long way in making the company more popular amongst film lovers.Strategic Agreements: Netflix has recently entered into strategic agreements with companies like Wal-Mart, a renowned name in the retail business. Such strategic tie-up not onlyhelps in containing the ferocity of competition, but it also helps in propagating the cause of the company. In a similar tie-up with Microsoft, the software leader, Netflix movies can now stream through the Xbox, which will certainly help in gaining a few more patrons.