Significance strategy changes at Netflix
In the early stages when Netflix was conceived, it had a competitive advantage over its competitors thus; it only needed sustainable innovations in its business to enhance its growth. Netflix pioneered online DVD rental market while its competitors were doing it manually; this was a great competitive advantage. The competitive advantage created a barrier between Netflix and its competitor. This enabled it to flourish very well in the online DVD rental market. The first section of this paper will address the early strategies which Netflix employed to beat its competitors. These strategies will be analyzed in the following table:
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Table 1.0: Early Strategies
Note: There was no stiff competition at the time because the market was under-starved.
|Customer classification|| |
|Price adjustment|| |
|Inventory Management System|| |
|Revenue Sharing Agreements|| |
|Recommendation System|| |
|Red envelop entertainment|| |
As Netflix was preparing to enter online video market popularly known as Video on Demand (VOD), more competitors were already in it. This posed a great challenge to the organization thus; there was a need to come up with new core competencies so that it can out-do its competitors. Due to the stiff competition on VOD, Netflix had to employ new strategies in its business activities. The following table discusses the new strategies the organization had decided to implement so that it can build a competitive advantage over its customers.
Table 1.1: New strategies
|Investment and development||In this process the organization had three alternatives: |
|VOD Services limitations|| |
|VOD Alternatives|| |
The intended and emergent strategy making at Netflix should employ disruptive innovations. This will assist Netflix to retain its customers despite the emergence of new competitors in the business. Netflix will also be in a position of improving its services as well as creating unexpected sets of values to it VOD services.