Organizational & Environmental Analysis Essay Example
Marketing is a critical factor in an organization as it determines how well the business strives to fulfill the needs of the customers. The following report relates to Netflix Company. The institution majors in the streaming of movies and its services had been very marketable in the past but currently experiencing difficulties. Proper strategies of attracting clients in an enterprise give a clear indication that the company is growing. As a result, the marketing department has to put the right approaches to ensure that the company’s products remain competitive in the market (Ottow 2015). Accordingly, marketing in business requires that the promoters develop unique strategies that promise customer attraction so as to ensure that the company competes efficiently and experiences tremendous growth.
Application and Analysis Of 5Cs
Company-Strengths & Weaknesses
Netflix Inc. is an organization which has been very marketable in the past with a high number of clients subscribing to its services. A company that has many customers has higher chances of growing only if the business can put strategies to satisfy them. Therefore, having a large number of clients is one of the strengths that the company has over the other competitors in the market for movies.
The second force of the company is the experience it has in the business of film. Having founded in the year 1997, it means that the organization has a long time experience in the market. Unlike its competitors, the institution has broad knowledge relating to the market, which is as a result of being in the business for a very long time (Hutt & Speh 2013). Additionally, in the years that the institution has been offering movies to clients, there have been changes all through, and the company has been able to adapt to the environment. In short, the period that the enterprise has operated makes the company compelling since it has been able to learn how to overcome the odds.
The enterprise has a weakness in making decisions. In a market, if a company makes a slight mistake, it may affect the feeling of the customers towards the organization which in turn affects revenue and growth of the business. According to Herrmann (2015), decision making is a critical part of an organization. About this, a decision to increase clients’ subscription by 60% is very high. Some other ways can be used in raising the revenues of the business. The company can opt to cut down the cost and as a result, increase the income of the enterprise. Raising prices was not only the available option of increasing the revenue of Netflix Inc. and therefore shows how poor decisions are made.
The company is serving types of clients who need to enjoy. As a result, the clients attended to by the corporation are customers who might be viewed to have some cash. However, the corporation might have in mind that it is serving customers who are trying to live a luxurious life, though this might not be the case. Some clients like watching movies since it is their hobby and they are addicted to it, and therefore they are not doing it as a luxury. In brief, the business is serving customers at all levels of wealth since movies mainly do not have classes. Initially, the company was attending to clients in the domestic market, thus ignoring the international markets. Therefore, Netflix Inc. was serving those in the US market, though there were plans to expand into other geographical markets like the United Kingdom and Ireland.
The enterprise sourced the movies from the production companies. About this, the studios which record the videos are the suppliers of the services that the firm provided to the clients. Initially, the establishment distributed DVDs to the customers by the use of the mailboxes. The business innovated a strategy where it would acquire movies as soon as they are released and sent out to the customers. However, after some time, the videos were available to other premium channels like the Starz and Epix thereby competition was enhanced. Since not all movies were available in a particular channel, Netflix Inc. organized with the Starz to help it distribute its revenues making it one of its distributors.
Some of the rivals of Netflix Company included the Blockbuster and acquired by the DISH Network. However, these were competitors in the streaming arena. Competition in the streaming arena was more severe than that in the DVD sector. Stiff competition drives away weak companies and vice versa (Hill & Jones 2009). As a result, old rivals in the market could re-enter the market and still claim a portion of the market. On the side of new entrants, the company faced a threat of producing companies. Given that these producing firms have the experience in the industry though, in content provision, this was always portrayed as a threat to the company. The reason is that some companies like the Universal Studios or the 21st Century Fox would start offering streaming services. Having Universal Studios in the streaming market meant that the institution could not avail latest movies to Netflix Inc.
Some factors in the wider environment affect the services of the company. The first factor is the legal background. In order to air the content, the firm has to pay for licenses. The airing of videos without the consent of the producers would result in infringement of their patent right. Technology is another environmental context affecting the operations of the institution. As the technology advances, the business of the firm becomes irrelevant since clients can enjoy the services through other means.
Strategic Approach of the Company
In the case, the movie business has been structured to focus on some customers depending on their location. As a result, Netflix has divided the market into two broad markets. The first division is the domestic market, whereby, local market concerns the customers in the United States. The second major section is the international market. Initially, the company was serving the domestic market in the U.S but had plans to join the international market, thus making it the next division.
In the two market segments discussed under segmentation, the firm’s main aim falls under two types of clients. The first bunch of customers that the firm serves is those in the domestic market of the U.S. Also, there are other types of clients in other markets outside the U.S where the corporation has plans to establish operations such as in Canada and Ireland.
The enterprise has set up ways of ensuring that the products and services of the firm remain unique and competitive as compared to others. The first strategy is that of low pricing. As such, the organization has lowered the subscription cost so as to remain competitive. Another unique way of positioning the institution’s product is that of ensuring that the product is available immediately to the customers. The two ways of product positioning gives Netflix Inc. a competitive advantage.
Evaluation of the Company
Marketing of the Firm
The marketing strategy of Netflix Firm is on average regarding performance and effectiveness. In this regard, the company needs to invest more in decision-making so as to ensure that the company markets itself to the clients. For instance, a reduced price is a tool that can be used to generate new and increased sales (Vee, Miller, & Bauer 2013). Contrary to this, while raising the costs of the services in the enterprise, the management of the organization does not consider the setbacks that arise as a result. To improve the market position of the company, the firm has to restructure its method of making decisions.
Effectiveness of 5Cs Analysis by Netflix
Analysis of the 5Cs of the organization is somehow inferior since the company was not able to analyze its customers before considering a raise in the prices. Instead, the administration should have taken into consideration that it serves customers who fall into different classes of wealth since not all could have afforded the hiked prices. Although the subscription cost was low, raising prices affected some consumption of their products negatively.
Failure in Marketing Strategies
The company has failed in its marketing strategies. Using prices as a tool to market the products of the firm is a poor strategy since this has put the business at a loss, and now struggling to raise its revenue. Discounts attract more customers (Zarei 2014). Accordingly, Netflix should consider utilizing other strategies such giving discounts to loyal customers to convince them to continue making subscriptions.
Focus on Clients
The firm has not exhausted the number of segments that it might focus on. Other market divisions that the institution might target is the social class and personality of the customers. There are consumers who do not mind about the price, and therefore, designing a strategy that mainly focuses on such a group would cover the personality and social class segments.
Netflix Inc. is a corporation that has failed in the marketing of its business. Promotion strategies in companies should be implemented in such a way that it favors both the business and the consumers. Thus the firm should manage the market strategies decisively by utilizing strategies such as offering discounts, focusing on new customer segments, and partnering with producing companies to provide the best experience to their clients. By doing so, Netflix will be able to grow its market share and thus improve its financial position.
Herrmann, J. W. 2015, Engineering decision making and risk management.
Hill, C. W. L., & Jones, G. R. 2009, Essentials of strategic management. Mason, OH, South-Western/Cengage Learning.
Hutt, M. D., & Speh, T. W. 2013, Business marketing management: B2B. Australia, South-Western, Cengage Learning.
Ottow, A. 2015, Market and competition authorities: good agency principles. Oxford, Oxford University Press.
Vee, J., Miller, T., & Bauer, J. 2013, Gravitational marketing: the science of attracting customers. Hoboken, N.J., Wiley.
Zarei, E. 2014, Handyman marketing. [Place of publication not identified], Lulu Com.
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