Business communication: Netflix and Amazon.com
- Executive summary.
- Why Amazon should consider investing in Netflix.
- The Netflix Brand.
- Mission statement.
- The brand in few words.
- Key dates.
- Market analysis.
- Porter's 5 forces: The industry analysis
- Netflix's marketing strategy.
- The subscription plan strategy.
- Distribution strategy.
- Conclusion & recommendation.
Amazon is company which has been experiencing strong expansion. They moved from book distribution to, tools, auto, industrial, sports, health & beauty, grocery, electronics & computers and other products and services. Amazon is constantly scrutiny new market for new growth opportunities. The latest market entering was the video rental services over the internet. This market contains high margins, enormous potential growth but a slow speed. So in the meanwhile Amazon wants to build brand awareness the home video rental market. This enables Amazon to gain brand awareness in the video rental market and ride the increasing demand wave of the home video rental business. To do this 2 options occur. One is to directly enter the market and build the business from ground up. Second to buy our way in through a market leader. The Netflix stands out as the choice of excellence.
[...] The second is to buy an existing market leader Netflix and to use its experience, user database and business momentum to build long lasting market leadership. In order take a decision one has to study the Netflix brand, its market, its competitive environment and its business strategies Why Amazon should consider investing in Netflix Recently there has been a lot of talk about Amazon buying Netflix. Amazon started out as a company that sold books on the internet. It was revolutionized the old brick and mortar business model. [...]
[...] The Netflix and Blockbuster business model are easy to copy, except for Netflix's patent distribution software which regulates DVD flow between storing centers in relation of demand, location, DVD availability and customer renting history profile Threat of substitute products Consumer might shift to other hobbies sports, video gaming, social networking or video streaming sites like YouTube. Studies point out that time spend on the internet is increasing to the expensive of time spend in front of TV Bargaining power of suppliers Since Netflix creates mainly traffic for old titles and non blockbuster movies (not Blockbuster's movies), Netflix has the upper hand hear. [...]
[...] Another threat to Blockbuster and Netflix could be that in five or ten years from now it is very possible that nobody will be renting DVD's on a web site and returning them through the mail. Because the cable companies seem to have a powerful distribution network via the ?on-demand? model, and there is no reason to think that every movie that Blockbuster and Netflix have could be part of a mass digital library, accessible to every customer who has a cable box Porter's 5 forces: the industry analysis Porter's five forces model examines the competitive forces at play within the home video rental industry and enables us to better estimate its potential Rivalry among competitors Competitors: Blockbuster Inc.; Hollywood Entertainment Corp. [...]