Netflix analysis Business & Marketing Essay Research

Netflix: an Analysis  Student Name
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Netflix Analysis
Describe the two separate Netflix offerings.
Netflix offers both DVD-by-mail and streaming options. For DVD subscription, Netflix will send a user DVDs, after paying separately for a DVD subscription. For video streaming, the company partners with production houses to get the required licenses to stream content. Video streaming is currently the company’s most preferred offering, due to the endeavor to shift from atoms to bits.
What were three of Netflix’s sources of competitive advantage in the DVD-by-mail business? Describe in detail.
Netflix leverages a strong brand, a large selection of films, and scale of operation. Netflix has a strong brand in the market as evidenced by being ranked the best in the business by organizations like the American Customer Satisfaction Index (ACSI) and Nielsen rankings. The good customer experience has allowed the company to have a good reputation. The large selection of films (the “long tail”) gives clients a wide range of choices. Users want the freedom to choose the titles they want and Netflix meets this need appropriately. Netflix has a large scale of operations. With the huge customer base and distribution network, the company can reach more clients.
What is the Netflix churn rate and what are the reasons behind the rate?
Netflix’s churn rate has remained low over time. Even when Blockbuster and Walmart launched copycat efforts, the churn rate fell. Such a low churn rate has been critical in ensuring the company remains profitable, despite the increasing number of competitors. Since getting a new customer is expensive, Netflix has managed to reduce costs by maintaining the already available clients. The low churn rate is due to the high customer satisfaction Netflix has offered to clients. The ability to deliver products promptly has e...