Key Strategic Issue

Key Strategic Issue

This article is about the past business history and current business situation Netflix company is in. The case begins talking about how Netflix started with a bang making positive profits and revenues, but has recently hit some trouble due to strategic mishaps negatively affecting the company. The article then begins to describe the industry and various competition within it, and how they do business. There is some information on market trends in home viewing of movies, but most importantly the meat of the article discusses Netflix’s business model and strategy in detail.

The one primary problem/key issue facing Netflix is how it will continue to remain the subscription-based leader in the instant movie streaming/DVD delivery industry. There are many rival competitors emerging offering a wide variety of services and options to consumers, and it is important Netflix modifies its business model/strategy and uses its brand recognition/positive traits efficiently.

The best-case scenario is Netflix modifies its strategy to once again differentiate itself from competition. Also, it would be ideal that for the global markets targeted to generate massive revenue/profits. The likely scenario is that Netflix will steadily improve internationally, but retain a firm hold of those markets before anyone else has. Also, it is likely that Netflix will remain prominent but will be in tough competition with rivals such as Amazon Prime and Hulu. The worse case scenario is the global market completely failing, specifically in central/south America. Additionally, it would be very bad if Netflix maintains its current model with no changes because competition would simply offer a better service than what they currently have.

Alternatives

The first alternative is for Netflix to bring back the unlimited streaming plus 1/2/3-8 DVD title at a time options for a cheaper price. This format is what boosted sales for Netflix initially. The segmentation of DVD rental subscription and streaming subscription had failed. Therefore, Netflix should bring back the combination subscription at lower rates.

A strategic advantage is that this method