Netflix: The Public Relations Box Office Flop SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Netflix: The Public Relations Box Office Flop
On the morning of September 19, 2011, the chief executive officer (CEO) of the online movie provider Netflix Incorporated (Netflix) became witness to growing public discontent and media criticism. The previous evening the CEO had announced on the company blog that Netflix would be splitting into two separate entities. With the proposed change, the Netflix DVD-by-mail service would be spun-out and renamed Qwikster. The move would leave the Netflix brand to focus on offering online streamed entertainment. This was not the first time Netflix had caused large scale consumer frustration, as a few months earlier in July 2011, the company had announced it would be increasing rates as much as 60 per cent. The result was a loss of over one million Netflix subscribers by September 2011, representing the first time the company had ever lost subscribers from one quarter to the next. Although the split into two separate entities could be seen as a good business strategy, Netflix did not follow through with a well-developed communication plan. Moving forward, both Netflix and Qwikster had become symbolic of a bad two-headed monster movie, with Netflix management in desperate need to develop better communications with disgruntled consumers, or risk losing additional subscribers and lucrative profits to a number of growing competitors.
Swot Analysis of "Netflix: The Public Relations Box Office Flop" written by Jana Seijts, Paul Bigus includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Netflix Subscribers facing as an external strategic factors. Some of the topics covered in Netflix: The Public Relations Box Office Flop case study are - Strategic Management Strategies, Communication, Customers, Leadership, Organizational culture, Pricing, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Netflix: The Public Relations Box Office Flop casestudy better are - – challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Netflix: The Public Relations Box Office Flop
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Netflix: The Public Relations Box Office Flop case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Netflix Subscribers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Netflix Subscribers operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Netflix: The Public Relations Box Office Flop can be done for the following purposes –
1. Strategic planning using facts provided in Netflix: The Public Relations Box Office Flop case study
2. Improving business portfolio management of Netflix Subscribers
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Netflix Subscribers
Strengths Netflix: The Public Relations Box Office Flop | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Netflix Subscribers in Netflix: The Public Relations Box Office Flop Harvard Business Review case study are -
Effective Research and Development (R&D)
– Netflix Subscribers has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Netflix: The Public Relations Box Office Flop - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Netflix: The Public Relations Box Office Flop firm has clearly differentiated products in the market place. This has enabled Netflix Subscribers to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Netflix Subscribers to invest into research and development (R&D) and innovation.
Strong track record of project management
– Netflix Subscribers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Netflix Subscribers is present in almost all the verticals within the industry. This has provided firm in Netflix: The Public Relations Box Office Flop case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Netflix Subscribers has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Netflix: The Public Relations Box Office Flop HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Netflix Subscribers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Netflix Subscribers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Netflix Subscribers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Netflix: The Public Relations Box Office Flop Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Netflix Subscribers in the sector have low bargaining power. Netflix: The Public Relations Box Office Flop has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Netflix Subscribers to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Netflix Subscribers is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jana Seijts, Paul Bigus can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Netflix Subscribers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Netflix Subscribers has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of Netflix Subscribers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Netflix: The Public Relations Box Office Flop Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Netflix: The Public Relations Box Office Flop | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Netflix: The Public Relations Box Office Flop are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Netflix: The Public Relations Box Office Flop, is just above the industry average. Netflix Subscribers needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Netflix: The Public Relations Box Office Flop, in the dynamic environment Netflix Subscribers has struggled to respond to the nimble upstart competition. Netflix Subscribers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Netflix Subscribers, firm in the HBR case study Netflix: The Public Relations Box Office Flop needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Netflix Subscribers is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Netflix Subscribers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Netflix Subscribers to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Netflix Subscribers has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Netflix: The Public Relations Box Office Flop should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Netflix: The Public Relations Box Office Flop, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Netflix Subscribers has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Netflix Subscribers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Netflix: The Public Relations Box Office Flop can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Netflix Subscribers has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Netflix: The Public Relations Box Office Flop HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Netflix Subscribers has relatively successful track record of launching new products.
High cash cycle compare to competitors
Netflix Subscribers has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Netflix: The Public Relations Box Office Flop | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Netflix: The Public Relations Box Office Flop are -
Using analytics as competitive advantage
– Netflix Subscribers has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Netflix: The Public Relations Box Office Flop - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Netflix Subscribers to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Netflix Subscribers can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Netflix Subscribers can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Netflix Subscribers to increase its market reach. Netflix Subscribers will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Netflix Subscribers has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Netflix Subscribers can use these opportunities to build new business models that can help the communities that Netflix Subscribers operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Netflix Subscribers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Netflix Subscribers can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Netflix Subscribers can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Netflix Subscribers can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Netflix: The Public Relations Box Office Flop suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Netflix Subscribers can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Netflix Subscribers can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Netflix Subscribers in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Threats Netflix: The Public Relations Box Office Flop External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Netflix: The Public Relations Box Office Flop are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Netflix Subscribers business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Netflix Subscribers has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Netflix Subscribers needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Netflix Subscribers will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Netflix Subscribers in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Netflix Subscribers needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Netflix Subscribers can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Netflix Subscribers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Netflix Subscribers with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Netflix Subscribers can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Netflix Subscribers in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Shortening product life cycle
– it is one of the major threat that Netflix Subscribers is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Netflix Subscribers demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Netflix: The Public Relations Box Office Flop Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Netflix: The Public Relations Box Office Flop needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Netflix: The Public Relations Box Office Flop is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Netflix: The Public Relations Box Office Flop is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Netflix: The Public Relations Box Office Flop is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Netflix Subscribers needs to make to build a sustainable competitive advantage.
