Swot Analysis of Netflix

Added on - 03 Feb 2020

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In order to stay competitive in the marketplace, the organizations have to continuouslyevaluate their position. An effective method to do this is by adopting SWOT analysis framework.This helps in identifying the strengths, weaknesses, opportunities and threats (Helms and Nixon,2010). These prove to be useful for planning the future projects of the business as well as formaking appropriate selection between the new product lines that are to be introduced. Netflix isan American Entertainment company that specializes in providing video- on- demand online andDVDs by mail (Napoli, 2014). The present essay provides information on SWOT analysis andanalyses the ways in which this theory applies to Netflix.SWOT analysis is an acronym that denotes strengths, weaknesses, opportunities andthreats. Its purpose is to identify the internal and external factors that are significant for abusiness to consider when it has to achieve an objective (Abdi, Azadegan-Mehr and Ghazinoory,2011). Strengths and weaknesses are factors that are internal to an organization. In contrast tothis, opportunities and threats are factors that a business faces from external environment. In thisway, SWOT analysis is useful in strategy building by identification of factors that are internaland external to an organization. Secondly, it is also useful in matching and converting. This isconcerned with matching the strengths to opportunities as well as converting weaknesses intostrengths or threats into opportunities.While considering the strengths of Netflix, popularity and convenience li at the top.There has been development of an ecosystem by Netflix that that allows for using variousinternet connected devices such as mobile devices, televisions and computers. As the customersopt for convenience, it has become a major strength for Netflix as the organization bestows themwith this gift of consuming entertainment online (Valentin, 2011). It popularity will help thecompany to extend its international expansion.Declining DVD membership has emerged as a weakness of Netflix. Earlier, streamingand DVD- by – mail, both the offerings could be obtained by customers under one hybrid plan.However, when the plans were separated by Netflix, it decreased the convenience of customersas they now had to obtain two different subscriptions (Harris, 2010). Thus, membershipsdeclined and are still on the same path. Netflix has also been weak on the aspect of internationalbusiness as it has been less profitable for the company. The international operations of thecompany still have not flourished well.1
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