NETFLIX

Internal Factor Evaluation (IFE) Matrix

Weight Rating Weighted

Sl. No Opportunities
Score
Netflix provides value-added
1. 0.02 2 0.04
services to its loyal customers
The subscription base of Netflix has
2. 0.15 3 0.45
been expanding tremendously.
It provides customized video
3. 0.02 3 0.06
recommendation service.
Netflix has been building its brand
4. 0.09 3 0.27
loyalty
It provides user-friendly web
5. 0.01 3 0.03
interface to its customers
It maintains low subscriber
6. 0.05 3 0.15
acquisition costs
It creates incentives for its loyal
7. 0.02 2 0.04
customers
The company has a potential for vast
8. 0.09 2 0.18
market penetration
If possible, the company provides
9. 0.03 1 0.03
vertical integration with the studio
Threats
Netflix has to retain the expectations
10. 0.15 3 0.45
of its subscribers
There is an immense competition in
11. 0.05 3 0.15
the market to attract new subscribers
12. Broadcasting subscribers 0.02 2 0.04
13. Cloud control 0.20 3 0.60
14. Licensing 0.03 2 0.06
15. Studio power over DVD releases 0.03 2 0.06
16. Distribution 0.02 2 0.04
17. Internet sites 0.02 2 0.04
Total 1.0 2.69
External Factor Evaluation (EFE) Matrix

Weight Rating Weighted

Sl. No Opportunities
Score
Over 150 million people in the
1. 0.08 3 0.24
United States watch online videos.
Over 50% of the spending of the
2. international market is in the filmed 0.07 2 0.14
entertainment of the US.
The digital distribution of the media
3. 0.06 3 0.18
has been growing tremendously
The weak price of US dollar makes
4. Netflix attractive for international 0.03 2 0.06
market
The rivals like Blockbusters have
5. been facing issues with their business 0.04 4 0.16
models
The consumers are seen to spend
6. over $20 billion on home video 0.05 3 0.15
purchase
It creates incentives for its loyal
7. 0.03 2 0.06
customers
The service provided by Netflix is
8. considered superior as compared to 0.04 4 0.16
its rivals
A strong mail delivery position
which lays foundation for a well
9. 0.02 1 0.02
position for Video on demand
business
There is a potential growth estimated
10. 0.05 2 0.1
in the Netflix subscription
Threats
Intense competition in the market is
11. 0.10 2 0.20
the biggest threat
YouTube own more than 75% of the
12. market share in the multimedia 0.10 2 0.20
market
The movies by Time Warner cable
13. 0.08 3 0.24
are in huge demand.
Ad-based streamer and Hulu provide
14. 0.04 2 0.08
free TV shows and movies
Legally, Netflix is not allowed to
15. release new DVDs until 28 days of 0.03 3 0.09
their retail release
16. Netflix has various complaints 0.03 4 0.12
regarding collusion with Wal-Mart
 and Amazon
Low barriers to entry will lead to
increase in the number of start-ups
17. 0.05 3 0.15
(which provide the same services at
low cost)
High cost in attaining original
18. 0.04 4 0.16
content rights
Infringements in the environmental
19. policies and has been ranked ‘D’ in 0.03 2 0.06
environmental awareness
Content rights expires in a year and
20. the same content can be shown other 0.03 2 0.06
platforms
Total 1.0 2.57