Netflix Company Introduction: Six Strategies To Fill The Gap

Netflix Companyintroductionnetflix Six Strategyfill The Gap Strategy

Netflix Company introduction Netflix Six Strategy Fill the gap strategy- Reed hasting maintained a low subscription fee for the overdue videos which had accumulated large fines due to uncontrolled borrowing. Netflix strategic partners- the company partnered with apple to increase number of customers while apple benefited on both occasions by increasing the number of video contents to its television box. Timeliness- streaming was subject to scrutiny in 2002 to 2007, the company had estimated that over seventy percent of its content would be available which by 2007 the company had only started. Incoming income-hasting aimed at attracting one customer a month, as such the company was able to increase it capacity to provide more content and increase revenue.

Learning from the others- learning from previous mistakes allowed hasting to effectively combine different management mistakes thereby seeking answers. Value chain management-Netflix has proved successful in meeting customer demands through adding value to the products and services. How Netflix was able to Disrupt Home Entertainment Industry. The company Shifted its focus to streaming model. Netflix initially sold movies by mail before adopting streaming model which has greatly enhanced more viewers.

The company also exercised blockbuster a move that encouraged more views from initial 4000 locations . expand selection of more television series. Introduction of gaming videos. Netflix increased its content from video library to gaming application. The company charged fixed monthly premiums as compared to Xbox and play stations. How Netflix Business Strategy Changed Over Time the company has transformed over the years from VHS to DVD rental and to global internet television.

Digitalization of the company. Netflix has evolved over time to accommodate the growing need of the customers thereby developing online services. Widespread use of internet and Netflix web allowed more subscription of viewers. Establishment of Netflix content marketing strategy. The strategy oversaw purchase of media license from revoked TV shows.

How Netflix may increase demand for services in united state. Introduction of Netflix standard monthly premiums. The company charged lowest as compared to Amazon, HBO and Hulu. Increased investment in streaming to more than 250 countries across the world. Netflix ability to compete with other competitors.

The company ability meet the high number of customer. Netflix spending spree, the company spending is ranked higher than amazon and HBO. Other Services Provided Netflix offers quality image that is 3D and in-house programming services 4k. Netflix TVs. Netflix library is accessible to many devices such as blue ray .

Security services the company protects information from being corrupted and duplicated by other services providers. Marketing of contents, the company experienced faster growth through marketing of its programs in television series. Challenges faced and how Netflix addresses the challenges. Establishment of blockbuster kiosks. The kiosks stored traditional videos and programs which were not accessible by Netflix, therefore increased spending in search of contents.

Establishment of red box in America. Red box machines were drawing customers away from Netflix due to low pricing and availability of newer contents. Netflix countered the move by lowering the streaming prices. stiff competition, Netflix faced stiff competition from HBO, HULU and amazon video. Value Line Sheet Analysis Profits of Netflix. The ability of Netflix to purchase new content is compromised by competitors pricing mechanism thereby affecting the long-term gross margin of 35% as compared to 38.3 placed to attract expensive deals .

Increased investment in consumer electronic devices with the ability to facilitate advancement ,they include Microsoft and Google television devices thus increasing income. Streaming television. Expansion of the company contents to include home viewing and purchase of streaming licenses increased united state consumers. Employment of qualified personnel. Netflix management aims at providing suitable content appealing to the buyers and inexpensive thereby maintaining profits.

Compare Intrinsic price of Netflix and market price The market price for Netflix shares value is 360.58 while the intrinsic value is -16.05 . Market value is higher due to increased number of Netflix users over time while little change is experienced in content. Intrinsic value is lower due to lack of popular videos. Readily available market for the company shares thus reducing the financial implication of additional shares. Decision on Investment on Current Netflix Shares. Yes, because of the Netflix ability to acquire international market. The company has dominated the united state global market and has further conquered one hundred and thirty countries across the globe. Netflix strategic management team. Reed management style has attracted many investors to the company. Strong programming skills.

Netflix programs attracts more customers due to the low prices associated to them. Netflix growth rate. The company has experienced consistent growth in revenue.as such the price of shares increases at an increasing rate. ALEX SHARPE CASE STUDY 1 ALEX SHARPE CASE STUDY 2 Estimate the returns viability The data provided shows that the riskiest stock is that of Reynold. The riskiest nature of Reynold is obtained from the fact that it has a monthly standard deviation of 9.17 and an annual standard deviation of 32.45.

Reynold is then followed by Hasbro’s regarding the extent of risk possibility. Hasbro’s has a monthly standard deviation of 8.12% and an annual standard deviation of 28.11%. The standard deviation of Reynold is almost twice of that of Hasbro’s. The least risky stock is that of S&P 500 which has a monthly standard deviation of 3.6% and an annual standard deviation of 12.48%. The data shows that for the last five years 68% of the data points have drastically declined.

Suppose Sharpe’s position had been 99% of equity funds invested in S&P 500 and either 1% in Reynolds or 1% in Hasbro. Estimate the resulting portfolio position. How does each stock affect the variability of the equity investment? How does this relate to your answer to Question 1 above?

Reynold serves a better place than S&P 500 based on the calculations done. The results of calculation show that Reynold has a standard deviation of 3.46%, which is smaller when compared to S&P 500. Also, the expected return of 59% is much higher than that of S&P 500. When Reynold and S&P 500 are combined, the variability of equity is lower than both are taken separately. This answer in question 2 relates to the answer given in problem 1 in that, S&P 500 seems to be much riskier than Reynolds when both are considered individually.

Perform a regression of each stock's monthly returns (y-value) on the Index returns (x-value) to compute a ‘beta' (slope on x variable) for each stock. How does this relate to your answer to question 2 above? Use Excel to perform the regression. The calculation of regression analysis shows that Hasbro’s has beta coefficient more negative than Reynold, which has a beta factor of 1.42 while Hasbro’s has 1.42. Also, Hasbro’s is more negative than Reynold in general market aspect. The Reynold’s lower beta coefficient makes it have a relatively insignificant impact on portfolio impact. There is a close relationship between this answer and the one given in question 2. That is, at the weight of 1%, both Reynold and Hasbro have a standard deviation that is equal to each other. That is, even though Reynold has a high standard deviation.

The situation is a result of Reynold having a lower beta that lowers its effect on the variance of the combined portfolio.

How might the expected return of each stock relate to its riskiness? Generally, riskiness is directly related to stocks expected return. Bearing in mind that, the primary factor that is considered to determine the possible return of the best fit is merely the expected return. Also, the risks that are directly related to expected return should be minimal as much as possible. This statement means that those individuals who are involved in investing in portfolios of more significant risks are compensated to the same degree as those individuals investing in overtime investments. One approach that can be used to minimize risks is to hold the stock. The alternative method that would serve the same purpose is to diversify the portfolio through the combination of two or more stocks. Portfolio diversification is one of the most appropriate ways since the funds are not placed in one basket.

In what stock(s) if any should Sharpe invest? The best stock that Sharpe should invest in is Reynolds. On the other hand, it would recommend the Sharpe to diversify the portfolio by combining both S&P 500 and Reynold. The main reason behind my suggestion of the combination of both companies is just that it will minimize or in some cases wholly evade the risks.

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