Netflix movie-rental company

A SWOT analysis of Netflix reveals that although it is currently a relatively small business, it has undeniable strengths. The lack of late fees and due dates is a big strength for a number of reasons. First, it conveys a subliminal message to the customer, ôYouÆre okay. YouÆre not late; thereÆs no way you can be wrong. YouÆre accepted.ö This is a seductive message in a time where other video rental stores have the consumer locked in by doÆs and donÆts. Second, the fact that the $19.95 per month is a flat fee encourages customers to rent more movies than they ordinarily would (1). Since it costs them nothing extra to rent more than three, they have the luxury of renting movies they might not otherwise try. Third, the rapid turnaround time is a big plus. In the San Francisco area, where NetflixÆs main distribution center is located, turnaround is one to two days. It used to be slower in other areas, but since they opened 22 more regional distribution centers, which means that most of their customer baseù90% of a

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player deals on its web site. My one complaint about the Netflix web site was that although it stated that I could search by actors and directors, it only allowed me to search by movie title. I could find ôPillow Talk,ö which stars Doris Day and Rock Hudson, but a search for the actorsÆ names brought zero matches for Day and one match for Hudson (not ôPillow Talkö). Opportunities for Netflix will be determined by how well they can make their niche in the market distinctive from those of the big guns and whether they can develop new features that will make their service unique in some way. Netflix offers to let first-time customers try Netflix for free, which will undoubtedly gain them many customers who might otherwise have opted out (4). ôAn innovative program called Netflix First makes a small number of independent films available exclusively to Netflix subscribers for a limited period. The program, which started with ôCroupierö has grown to include about 20 filmsö (1). Most of the threats to NetflixÆs success are external. Wal-MartÆs online DVD rental program undercuts NetflixÆs priceù$18.76 compared with NetflixÆs $19.95ùand offers a better selection of films (1). BlockbusterÆs is a formidable opponent, not only because
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Approximate Pages = 5 (250 words per page)

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