Throughout 2017 and the first three months of 2018, Netflix was on a roll. Movie and TV show enthusiasts acrossthe world were flocking to become Netflix subscribers in unprecedented numbers, and shareholders wereexceptionally pleased with Netflix's skyrocketing stock price. Over the past eight years, the company had successfullytransformed its business model from one where subscribers paid a monthly fee to receive an unlimited number ofDVDs each month (delivered and returned by mail with one title out at a time) to a model where subscribers paid a monthly fee to watch an unlimited number of movies and TV episodes streamed over the Internet. In 2018, Netflix wasthe world's leading Internet television network with over 117 million streaming memberships in over 190 countriesenjoying more than 140 million hours of TV shows and movies per day, including original series, documentaries, andfeature films. Netflix members could not only watch as much streamed content as they wantedanytime, anywhere,on nearly any Internet-connected screenbut they could also play, pause, and resume watching, all without commercials. In the United States, Netflix still had 3.4 million members in 2018 who, because of slow or limitedInternet service, continued to receive DVDs solely by mail (but the numbers of mail-only subscribers were steadilydeclining). Netflix's swift growth in the United States and its promising potential for further expanding its international subscriberspushed the company's stock price to an all-time high of $331.44 on March 5, 2018, up from an opening price of$124.96 on January 3, 2017. Already solidly entrenched as the biggest and best-known Internet subscription servicefor watching TV shows and movies, the only two questions for Netflix in 2018 seemed to be how big Netflix's servicemight one day become in the world market for on-demand streaming of movies and TV episodes and whether thecompany had the competitive and financial strength to combat the efforts of larger, resource-rich rivals looking to stealsubscribers away from Netflix.

QUESTIONS:

1. What is Netflix's strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fit the competitive approach that Netflix is taking? What type of competitive advantage is Netflix trying to achieve? 2. What does a SWOT analysis of Netflix reveal about the overall attractiveness of its situation? 3. Use a five-forces analysis to support your answer. 4. How would you sustain Netflix's dominant position in streaming video in the PH? 5. What adjustments would you make to arrest Netflix's decline in subscription? 6. How would you convince shareholders that the decline in Netfllix's share price is temporary?