Traditional Risk Workshops: Strategic Risk

Traditional Risk Workshops: Strategic Risk Student’s Name Institutional Affiliation Traditional Risk Workshops: Strategic Risk Question I Netflix applies a business model where the customer must pay a subscription fee to stream the movie of their choice from the internet (Sharma, 2016). The company offers both the domestic and international streaming services and the sector has rapidly grown in the last couples of years. Although one has to pay to stream movie online, Netflix has introduced the value proposition to its subscription service by making it affordable, increasing its accessibility through various and multiple devices and providing the original content of the movie. In addition, Netflix also provides a DVD rental service; a business segment that is continuously declining due to the constant emergence of the new technologies that offer convenient services than this sector (Sharma, 2016). In this sector, they have installed mailboxes in the residential areas to ensure customers do not leave home to return or rent movies. Question II Porter’s five New entrants New entrants such as YouTube, Apple, Hulu and Amazon in the online subscription sector who bring new technologies and innovations. Further, these new entrants usually charge low subscription fees and this may make it hard for the Netflix to retain its customers or attract new ones. Suppliers bargaining power The bargaining power of suppliers will likely continue increasing, particularly from the dominant suppliers who have the types of films with higher demand. Increase in bargaining power will decrease the profit margins in Netflix Inc. Customer bargaining power With the potential increase in new entrants and substitute products, the bargaining power of the customers will increase because they will have numerous options to choose from. Usually, customers demand the best and to fend off the competition, Netflix must spend extra capital to improve its products and service. This may put pressure on the profitability of the Netflix in the long run. Product and Services Substitutes Threats Netflix is facing the threat of companies offering products and services that are substitutes for its main products and services. Some the examples include Apple TV and Hulu, which in addi...