Business Model Development Assessment 3: Netflix Report

This report offers a comprehensive analysis of Netflix's business model, focusing on its strengths, weaknesses, opportunities, and threats (SWOT). It examines the current business model canvas (BMC) and proposes a new business idea: introducing analogue boxes to reduce reliance on internet streaming. The report details how this proposal affects the BMC elements, including value proposition, target market, cost structure, and channels. It also discusses implementation considerations such as installation, cost, and resources. The report emphasizes the importance of business models in driving value and achieving success, concluding with a discussion on how the proposed changes can enhance Netflix's market share and customer base. The report references several academic sources on business model innovation and strategy.

Business Model Development
Assessment 3

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Introduction to Company........................................................................................................3
Summary of SWOT Elements................................................................................................3
Concept Outline and Explanation...........................................................................................4
Graphical representation of new generated BMC..................................................................5
Explanation of BMC Elements Affected by Proposal............................................................6
Implementation considerations...............................................................................................7
Importance of Business Models.............................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business model canvas can be referred to as the strategical tool which is taken into use
by a business entity with a view to develop new or document the current model of company. This
is a tool used by top management of an organisation in order to effectively and easily state and
explain a business idea or concept. In other words, it can be said that it is a documented version
of business through the stipulation of 9 elements which provide the overall idea on which the
working of company is based. The present project is conducted upon NETFLIX Inc. which is a
media as well as production corporation based in America. The entity provides subscription
based online content for its customers. This report consists of discussion on SWOT analysis,
elements of BMC affected by proposal, regenerated BMC, implementation consideration and
significance of business models.
MAIN BODY
Introduction to Company
NETFLIX is a service provider of media and a production organisation. It is having its
headquarters within the confines of Los Gatos, California. The main operations of the company
are subscription based streaming services in relation to films as well as TV programs. As per the
data of April 2019, it can be acknowledged that 148 million paid subscriptions of Netflix were
taken by users.
Summary of SWOT Elements
SWOT analysis is an analytical framework which is undertaken by a company with a
view to gain knowledge of the internal strengths, weaknesses, opportunities and threats. With
reference to NETFLIX, this analysis has been applied by the management to gain comprehensive
knowledge of the internal aspects of company.
STRENGTHS:
On the basis of SWOT analysis of NETFLIX, it has been analysed that this organisation
has a number of strengths. In this regard, one of the most prominent strengths of this corporation
is that NETFLIX provides its services within a number of countries across the global periphery,
making it a likeable brand among customers. Having extensive international presence, the
respective company has a large base of loyal customers who are not willing to shift to alternate

brands. In addition to this, it has been acknowledged that the originality of content provided by
the corporation to customers adds to the international image of organisation.
WEAKNESSES:
One of the biggest weaknesses of NETFLIX is regarded to be the availability of its
content only over online channels and media. This implies that the people who do not have
access to internet would not be able to take viewership of the films and TV programs presented
by company. In addition to this, it has been identified that another weakness of this entity is the
high cost of its services owing to the high quality of content which is streamed on the platform of
company. This means that not everyone is able to afford the services provided by entity. To deal
with these, it is required by management of NETFLIX to modify the current BMC of company
and regenerate a new model which seeks to enhance the strengths by capitalising upon the
opportunities.
OPPORTUNITIES:
NETFLIX can leverage the opportunity to enter into an effective partnership with top
notch telecom providers in order to render integrated package to facilitators. Yet another
opportunity that entity can capitalise upon is gaining access into those markets whereby it does
not provide services at present. Yet another opportunity for NETFLIX is to produce content
which is country specific and launch it within the confines of those nations only in order to
enhance its loyal base of customers.
THREATS:
One of the most prominent threats posed to NETFLIX is the presence of large number of
companies within online streaming sector. Some of the renowned examples of top notch
organisations are Hulu, Youtube, HBO, Amazon prime etc. that offer content which is similar to
that of NETFLIX. Yet another significant threat for the company is that while operating at an
international scale, a sudden or substantial change in governmental regulations may pose threat
to the operations of concerned corporation. These threats pose a negative impact on the business
model of NETFLIX thereby making the entity realise the need to regenerate the BMC.
Concept Outline and Explanation
Netflix offers a number of services such as streaming of online videos, movies which
consume internet. Mobile data transfer uses the most electricity due to which various issues arise
like transmission loss, weakening of electromagnetic waves and buffering videos. For that

reason, the transmission signal is required to be boosted. Such challenges create issues in the
environment owing to generation of emissions as a result of internet activities. Thus, in order to
reduce the outcomes of this issue, management of NETFLIX is introducing a new business idea
of offering analogue boxes which provide assistance to the enterprise in deflating environmental
issues.
NETFLIX can render analogue boxes that are connected with the tower controlling the
provision of services by company. The boxes that would be fitted would not require the use of
internet with a view to see the content in terms of films and TV programs. These boxes would
work through the recharge system in the same way as other telecommunication companies do.
This is a whole new concept which would provide aid to the organisation in enhancing the
number of memberships taken up by people on a daily basis. Further, the constraint faced by
entity in terms of cost and restricted target audience owing to lack of access to internet would
also be solved as a result of implementation of this concept. In addition to this, yet another
advantage that would be linked with execution of this new business idea would be that
NETFLIX would provide several recharge subscriptions such as 1 month, 6 months, 1 year and 3
years. The tenure of recharge subscription would be as per the choice of user and their likelihood
towards the streaming sector. By way of conversion of proposed business idea into reality,
NETFLIX can gain a competitive edge at market place and outpace other rival firms such as
Hulu, Youtube, HBO, Viacom, Amazon prime etc. Also, the respective company can enhance its
share across the globe along with the loyal base of customers.
Graphical representation of new generated BMC
Key Partners
 Cable
operators
 Satellite
operators
 Telecomm
unications
operators
Key Activities
 Training
and
Developme
nt
 Innovation
Services
Value
Proposition
 Affordabl
e Prices
 Content
Provided
to
Customers
 24*7
Services
Customer
Relationships
 Effective
and timely
Customer
Service
Customer
Segments
 People
aged in
between
24-40.
Key Resources
 Human
Channels
 Website

Resource
 Application
/website
 Studios
 Cast &
crew and
algorithm
Provided  Mobile
App
 Social
Media
 Digital
Media
Cost Structure
 Salary
 Wages
 Miscellaneous Expenses
 Implementation Cost
 Technical and Online Service Charges
Revenue Streams
 Subscription Fees
 Recharge Offer
Explanation of BMC Elements Affected by Proposal
NETFLIX is now coming up with a new idea of launching analogue boxes which would
eliminate the use of internet to views the television programs and films streaming on the
respective platform. In this regard, management of this company has decided to incorporate
alterations within old BMC model of company in order to ensure that the new offering of entity
aids in enhancement of market share as well as value of entity across the globe.
Business model canvas regenerated is affected by the proposal in a significant manner. In
this regard, 24*7 availability of services is an aspect that has been added to the value proposition
element within BMC of NETFLIX. Further, the newly generated BMC indicates that the
company has altered the target market and is not intending to target the individuals belonging to
the age group of 24-40 after the execution of new business idea. The element of cost structure is
also affected as a result of execution of new business idea as the entity would now have to incur
additional implementation cost of analogue boxes. Lastly, the element of channel within BMC is
affected as NETFLIX is now considering to make use of digital marketing with a view to gain
the attention of large base of people.

Implementation considerations
At the time of implementation of the proposed business idea, the management of
NETFLIX needs to take into account certain implementation considerations. In this regard, one
of the main aspects that need to be considered is installation consideration which means that
entity needs to pay attention in regards to the fact that the incorporation of analogue boxes takes
place as per organisational requirements. Yet another consideration for company would be cost
which means that the cost of executing the new business idea should be within the budget
stipulated by the finance department of NETFLIX. Another prominent consideration to be taken
into account is resources which mean that the firm should ensure that it has enough resources to
convert the proposed business idea into reality. Hereby, if all of these considerations are
managed by the respective company, it would ensure that the idea proposed by corporation is
executed as per expectations of entity and yields the desired results as required in terms of
enhanced subscriptions and memberships.
Importance of Business Models
Business models allow an organisation to gain value as a result of execution of new
business ideas. In this regard, it can be said that just by having an effective idea or concept, a
company can not gain success at market place. To make this possible and yield desirable
outcomes out of it, a corporation is required to implement a business model which would allow
the management to capitalise upon its strengths as well as weaknesses with a view to overcome
weaknesses and reduce the impact of business threats. Thus, business model is of key importance
to a company and needs to be properly designed well in advance by the organisation with the
help of application of BMC.
CONCLUSION
On the basis of above stipulated discussion, it can be said that BMC serves as an
extensive management tool which provides aid to an entity in laying out the overview of overall
idea on which concept of company is based. It has been analysed on the basis of SWOT analysis
that the brand has extensive goodwill and market value among the customers. Further, it has
been acknowledged that the entity has not been able to effectively capitalise on the elements of
Business Model Canvas. Lastly, it has been recognised that a company has to take into account
some implementation considerations while executing a business idea.

REFERENCES
Books & Journals
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551-565). Springer, Tokyo.
Zimmermann, H. D. and Pucihar, A., 2015. Open innovation, open data and new business
models. Open Data and New Business Models (September 1, 2015).
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landscape and collaborative business models. In 2015 18th International Conference on
Intelligence in Next Generation Networks (pp. 114-120). IEEE.
Wrigley, C. and Straker, K., 2016. Designing innovative business models with a framework that
promotes experimentation. Strategy & Leadership. 44(1). pp.11-19.
Euchner, J., 2016. Business model innovation. Research Technology Management. 59(3). pp.10-
11.
Cosenz, F. and Noto, G., 2018. A dynamic business modelling approach to design and
experiment new business venture strategies. Long Range Planning. 51(1). pp.127-140.
Murray, A. and Scuotto, V., 2016. The business model canvas. Symphonya. Emerging Issues in
Management. (3). pp.94-109.
Misra, P., Simmhan, Y. and Warrior, J., 2015. Towards a practical architecture for the next
generation internet of things. arXiv preprint arXiv:1502.00797.