State the points from their response, which you agree or disagree, as well as your reasons for

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Question:

State the points from their response, which you agree or disagree, as well as your reasons for agreeing or disagreeing.

Netflix, which began offering mail order dvd's initially, has grown into an internet streaming conglomerate. Netflix mentioned in the 2014 annual report 10-K filing that they are the largest internet television network and are operating in almost 50 different countries. Netflix is proud of being a pioneer in the internet television delivery space and they also recognized that their actions that have grown their customer base have also increased the adoption of internet based television for other providers. Many consumers have Netflix as a provider, among other providers with similar content.

Netflix's competitive advantage comes in two forms:

1) being one of the first to market in the internet delivery of television gave them a head start on the competition and

2) having the largest audience viewing the content of Netflix gives Netflix massive scale as an advantage.

Netflix absolutely has a long term corporate growth strategy, with short term success points. The report mentioned how they divided their dvd mail order business and their internet streaming business into two divisions in 2011, after they had been a part of one division prior. Additionally, the report mentioned how Netflix had recently expanded into Canada, Latin America and Europe, in an effort to grow their subscriber base. Netflix's long term strategy is grounded in their concept of "winning moments of truth" which is their way of saying that when a consumer has free time to watch television, Netflix wants those consumers watching Netflix.

Netflix recognizes that the internet television market is a competitive one and has become even more competitive since their 2014 report. As I write this article today, Netflix's stock price is $478, which indicates they have done quite well over the years for shareholders. However, stock price alone doesn't determine the direction of Netflix. Netflix is engaged in providing superior content; specifically having Emmy, Golden Globe and Academy Award nominated programming. This focus on content is expensive and may not directly result in an increase to their share price. Furthermore, in the 10-k filing, Netflix went on to discuss how they may seek to raise capital in the equity markets from time to time to pursue growth opportunities. They then mentioned how those additional capital opportunities could result in current shareholder dilution of shares, and the price will go down.