Background

Netflix is an online company with corporate headquarters in Los Gatos, California. Netflix was
founded by Hastings who is also the CEO of the company. Netflix’s key business is online rental
services in the software industry. Netflix’s software business services span various software
products and services. Among these are DVD movies and several other software products.
Despite disappointing results on its performance at the beginning, the innovative entrepreneur
continued to modify the company while identifying and exploiting new opportunities that
presented themselves. That was when the company designed and developed a website that saw it
host millions of subscribers making it rake in huge profits. (Netflix Case Analysis, 2018)

Netflix and Porter's generic strategies

Netflix’s generic strategy ensures that its business model works through suitable competitive
advantages. The company’s business design and competitive position counteracts external forces
involving Walmart, Amazon, Google, Apple, HBO, Disney, and other firms. Netflix’s intensive
growth strategies promote business development while these competitive forces are addressed.
Alignment of these growth strategies with the generic strategy and business model ensures the
operational effectiveness and benefits of the corporation’s competitive advantages. (Pratap,
2020)
Cost Leadership.

Netflix Inc.’s generic strategy is cost leadership, which in Michael E. Porter’s model ensures
competitive advantage through minimized costs and, frequently, minimized selling prices. This
generic strategy enables the online entertainment company’s business model’s competitiveness
based on low costs and the corresponding ability to sell at affordable prices, without necessarily
being a best-cost provider. In this generic strategy, Netflix broadly acquires more customers in
the online entertainment market, in contrast to focus strategies that concentrate on specific
market segments. For example, the media streaming company uses its competitive advantages to
reach more customers in the international market. This broad approach of the generic strategy
aligns with Netflix’s intensive growth strategies, which prioritize market penetration. The
approach relies on the company’s business model and value chain, which satisfy customers
partly through personalized customizations, such as in mobile app settings. Through intensive
growth strategies, the cost leadership generic strategy for competitive advantage gains the
biggest market share, relating to Netflix Inc.’s corporate mission and vision statements, which
point to the strategic plan and goal of attaining and maintaining leadership in the international
online entertainment industry. (MOORE, 2019)

Differentiation.

Even though Netflix mainly applies cost leadership as its generic strategy for competitive
advantage, the business also uses differentiation in its operations. As a generic strategy,
differentiation involves developing the online business and its products in ways that make them
different from the competition. For example, Netflix develops its competitive advantage by
producing its own original content, aside from streaming content from third parties. The
differentiation generic strategy enables the business model to attract and retain customers,
thereby supporting intensive growth strategies for further expansion of the online operations.
(MOORE, 2019)
POA for the company

Based on the above discussion, Netflix should continuously adapt to changing technological
dynamism and new market opportunities in reaching various markets. Netflix’s management
should hire experts on cross culture management to ensure a cross culture component is
incorporated in its pursuits. This could be the case since newer opportunities lie outside Netflix’s
current market that is characterized by a fairly uniform culture. In addition to that, the firm
should incorporate user friendly software products that are cross platform and compatible with
other software products to enhance usability. To maintain a large market share, the company
should always incorporate faire business practices in its pursuits. In addition to that, Netflix
should endeavor to develop software that can bar piracies on its products in addition to patenting
its products. The company should invest in software technologies that block any could be illegal
downloading of files or unauthorized access or copying of its products. That could block illegal
usage of its video products since it denies the company legitimate profits that could accrue from
those sales. The company should continuously evaluate the role played by information
technology in propelling it to its position, the ever changing trends in the industry I terms of
provision of services and other related services. It should continuously revise its plans to make
them current and relevant to the identified changes and endeavor to incorporate new technologies
in its pursuits.

Bibliography
MOORE, A. (2019, November). Netflix’s Generic Strategy, Business Model & Intensive Growth
Strategies. Retrieved from Rancord Society: https://www.rancord.org/netflix-business-model-
generic-strategy-intensive-growth-strategies-competitive-
advantage#:~:text=Netflix%20Inc.'s%20generic%20strategy%20is%20cost%20leadership%2C%
20which,%2C%20frequently%2C%20minimized%20selling%20prices.&text=Fo

Netflix Case Analysis. (2018, November). Retrieved from UK Essays:

https://www.ukessays.com/essays/marketing/netflix-case-analysis-marketing-essay.php?vref=1
Pratap, A. (2020, April). Generic and Intensive Strategies of Netflix. Retrieved from notesmatic:
https://notesmatic.com/2020/04/generic-and-intensive-strategies-of-netflix/