Establishing Strategic Direction: Ansoff Matrix - Netflix

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Establishing Strategic DirectionAnsoff Matrix -
Netflix
Existing products New products
Market penetration strategy Product development strategy
Existing markets U.S.A.- more purchasing and usage from existing customers across all product categories Develop new products such as video and computer games. (20 increase in sales in 2008)
New markets Market development strategy Diversification strategy
New markets Investigate optimum markets in North America i.e. Canada, and adjacent countries such as Mexico, moving on to Argentina, Chile and Brazil and later U.K. Australasia, and India (Bollywood factor).

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BCG Matrix - Netflix
Cash Cows
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Understanding how Netflix adds value to its
business and its place within the value system
Support Activities
Firms Infrastructure Open and transparent
culture. Interesting adult attitude to staff.
Firms Infrastructure Open and transparent
culture. Interesting adult attitude to staff.
Progressive organisation.
HR Management Innovative approach to staff
management. Black and white to some extent.
Slackers are fired and great staff are rewarded
by having open ended annual leave arrangements.
Margin
Technology Development Large scale digital
distribution via streaming and downloading
service
Procurement Strong buying power. Sources the
latest DVDs , blu ray discs from producers
/manufacturers.
Operations Online distribution is working well
Inbound Logistics Assume effective systems in
place as operations, inbound logistics/service
all run smoothly.
Outbound Logistics Supply chain functioning well.
No problems encountered with distriibution
/supply of products to customers
Marketing Sales Brand mgt need to measure
awareness and position the products more
memorably in a crowded marketplace
Service Prides itself on good customer service
and innovative staff policy
Margin
Primary Activities
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Competitor Analysis Netflix Porters Five
Forces Map

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Matching Assets and Competencies Netflixs
sustainable competitive advantage in U.S.Market

• Netflixs Assets/Competencies
• Sells DVDs and Blu ray discs that consumers need
• Strong brand recognition in U.S.A
• Quality product
• Wide product range
• Fairly strong customer service high levels of
  customer satisfaction.
• Services are tailored for individuals-onscreen
  welcome, recommendations
• Offers high speed streaming of movies and TV
  programmes via the internet
• Internet service includes movie recommendation
  algorithms

• Customer Requirements
• Consumers always need and enjoy home
  entertainment
• Brand recognition/brand long- term stability
• Quality over competition
• Large selection to choose from
• Attentive customer service
• Personalisation
• Good distribution network mail, video kiosks,
  vending machines, downloading, streaming, etc.
• Advice on which films to watch

Best Fit Match
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International Decision making model Business
Portfolio Model Harrell Kiefer. Selection
of Markets and Product/Market development
Netflix Compatibility/capability Country attractiveness/priority Country attractiveness/priority Country attractiveness/priority Country attractiveness/priority
Netflix Compatibility/capability High High Medium Low
Netflix Compatibility/capability High Primary Canada
Netflix Compatibility/capability Medium Secondary Mexico Argentina Colombia Brazil U.K. Australasia
Netflix Compatibility/capability Low Tertiary India
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Product analysis - Netflix
High popularity
Low popularity
High Price
Low Price
GOOD VALUE STRATEGY
PREMIUM STRATEGY
Older films
Streaming and discs for rent, both Blu-ray and
DVDs
ECONOMY STRATEGY
OVER CHARGING STRATEGY
DVD Boxed sets

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Product Perception Grid - Netflix
Quality High
1
2
3
4
5
Price
Low
High
6
5
7

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Low