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 - – increasing energy prices, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, increasing commodity prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, 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 -
Successful track record of launching new products
– Netflix Subscribers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Netflix Subscribers has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
High switching costs
– The high switching costs that Netflix Subscribers has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its 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.
Innovation driven organization
– Netflix Subscribers is one of the most innovative firm in sector. Manager in Netflix: The Public Relations Box Office Flop Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Leadership & Managing People field
– Netflix Subscribers is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Netflix Subscribers in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Organizational Resilience of Netflix Subscribers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Netflix Subscribers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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 -
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Netflix: The Public Relations Box Office Flop, it seems that the employees of Netflix Subscribers don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Netflix Subscribers has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Aligning sales with marketing
– It come across in the case study Netflix: The Public Relations Box Office Flop that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Netflix: The Public Relations Box Office Flop can leverage the sales team experience to cultivate customer relationships as Netflix Subscribers is planning to shift buying processes online.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Netflix Subscribers supply chain. Even after few cautionary changes mentioned in the HBR case study - Netflix: The Public Relations Box Office Flop, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Netflix Subscribers vulnerable to further global disruptions in South East Asia.
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.
Slow decision making process
– As mentioned earlier in the report, Netflix Subscribers has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Netflix Subscribers even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Netflix Subscribers products
– To increase the profitability and margins on the products, Netflix Subscribers needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Netflix Subscribers can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Netflix: The Public Relations Box Office Flop, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Netflix Subscribers to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Netflix Subscribers to hire the very best people irrespective of their geographical location.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Netflix Subscribers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Netflix Subscribers in the consumer business. Now Netflix Subscribers can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Netflix Subscribers can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Netflix Subscribers can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Netflix Subscribers can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Netflix: The Public Relations Box Office Flop .
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.
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.
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.
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.
Increasing wage structure of Netflix Subscribers
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Netflix Subscribers.
Regulatory challenges
– Netflix Subscribers needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
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.
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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
