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Netflix’s Strategy
The current strategy of Netflix has multiple components. Netflix strives to achieve a
consistent growth rate of subscribers through generating positive word of mouth, while investing
in effective marketing strategies. Its also strives to have a constant growth rate with its revenues.
Netflix offers a wide range of movie selection and constantly updates its movie selection. It strives
to achieve a high level of satisfaction from its customers. It offers its subscribers the choice of
streaming a movie or receiving the movie through the mail. Netflix also makes their service
convenient for its subscribers by using advanced software that is easy to use.
Of the five generic competitive strategies, Best-Cost Provider closely fits the competitive
approach that Netflix is taking. Netflix offer a range of subscription packages to its consumers
ranging from $8.99 a month to $47.99 a month. It also delivers a quality service that contains a
large base of movie and TV episode selection, while also offering its services on a variety of
devices.
Netflix is trying to achieve a Best-Cost Provider competitive advantage. Based on the
information given, Netflix has achieved the competitive advantage it was trying to achieve.
Netflix has a sustainable competitive advantage over Blockbuster. Netflix has the ability
to delivery DVDs by mail and stream movies online to its customers. Blockbuster does not offer
online streaming but has implemented the mail-in return of movies. Netflix’s movie and TV
episode library has more to offer consumers than Blockbuster. Its technology is more advanced
than Blockbuster. Netflix provides its subscribers with a one-day delivery time by locating the
movie and sending it out the same day it has requested. Blockbuster does not have the capability
of offering a one-day delivery time. If its store does not have the movie, the consumer will have
to until the movie is returned and available at the store. If its kiosk does not have the movie, the
consumer will have to wait until the kiosk has been restocked with the movie.
Questions:
1. Identify and describe how the Information Technology can provide the competitive advantage
for NETFLIX to win the competition? Give the detail framework or the concept of IT that NETFLIX
use and explain how the IT works to get the competitive advantage.
2. What factors contributed to success of IT in gaining the competitive advantage in NETFLIX?