Netflix Core Competencies

Threat of New Competition: Netflix has almost zero threat of new competition. Any new competition would have to overcome large capital expenses to get started; these expenses include obtaining TV show and movie rights from the studios. Even if the starting

Netflix was founded in 1997 with the intent to revolutionize the way in which consumers watch movies and television shows. Their accomplishments both in innovation and in customer base for their service indicate that the firm has been, and continues to be, successful in doing so. Currently, the

Netflix is first provider of delivered DVDs by mail that became common way and convenience for customer. Netflix offers DVDs to customers with quick delivery, which is mostly within one day (Willy Shih, Stephen Kaufman & David Spinola, 2007). In addition, customers utilize good recommendation system provided by Netflix (Scoot Merrill, 2009). Besides, customers are able to be given good customer service support (Katie Hafner, 2009).

Netflix followed a very well structured International strategy by planning their mission statement which is mainly directed to end users. “For one low monthly price, Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.”

The downturn of the economy has taken away many peoples disposable income and Netflix’s limited online library may have caused customers to question if it was worth it or not.

Large catalogue of diverse shows and movies – Netflix has a vast collection of international shows and movies that other competitors in the market do not have.

Netflix has around 75 million subscribers today which suggests that it is a very popular organisation. Netflix at the moment serves many markets across the world whinch included the US and Europe. Netflix suffers from competition from companies such as Amazon prime. Both of these companies compete to gain customers in this compact market. Netflix's corporate strategy fits in with their business level strategy as they deal mainly with DVD rental via online streaming. The deal that is in place with Warner bros has a major impact on how Netflix conducts itself. If other online streaming companies don't face this deal of not being allowed to stream their contents untill 28 days after the public release date then other companies have a competitive advantage which would lower Netflix's revenue. This would cause customers to leave Netflix as they may be able to see films at an earlier date with rival

Growing competition as a challenge represents the various companies that are now entering the market of online media-streaming. Companies such as HBO, Amazon, Google, and Hulu Plus have all began to offer media-streaming on the same electronic devices as Netflix, Inc. Currently Netflix, Inc. remains in the lead amongst its competitors; however, there is no guarantee that this advancement is a permanent one. It is inevitable that emerging companies will come up with creative ideas to gain the competitive edge and receive more consumers. For example, Amazon.com has “amplified

The main problem facing Netflix is the pending conflict with its content providers. Netflix has low bargaining power both over suppliers and buyers, and this represents an existential threat to the business. Netflix has proven to be a popular service, but despite the successes of its first ten years, there is now evidence that it has not fostered much brand loyalty, and that its customers are quite price sensitive. Combine this with the fact that its content suppliers are becoming direct competitors in the online streaming business and Netflix is in significant danger of having its growth trajectory derailed.

This also allows their content to be viewed virtually anywhere. The fact that they teamed up with Oracle to work on their website was a very beneficial move as this gives them somewhat propitiatory technology. I personally enjoy their recommendations and it is obvious that with their next arrival that they have strong logistics. They have a big cost advantage too. If I can stream a whole season of How I Met Your Mother in one day, I feel as though the $8.99 that I spent was a good investment and yet I still have another 29 or 30 days to go. The two times that I had to deal with their customer service; they quality of service was outstanding and I’ve heard many other wonderful testimonials. When looking at weaknesses, I feel that their inability to provide new releases is a major drawback. In addition to this, they need to amp the selection for online streaming since streaming is expanding rapidly. The issue at hand with streaming is that it can potentially lead to server crashes if there are too many users on at once. Netflix can also be very enticing to hackers since there is so much personal information stored. I would say that the biggest opportunity for Netflix would to be to make deals with the movie production companies to allow Netflix to offer new releases. To feed off of that, they need to increase their variety; particularly in the selection of indie and international films. With as

Also Netflix needs to prepare a better plan to recover old customers, gain new customers and make sure that the people who still have Netflix keep it. Establishing a bundle price for both online streaming and DVD rental will allow The Netflix Company to recover some market shares and remain the leading overall digital film company. The recommendations are as follows:

When Netflix was established in 1998, it shook the whole video rental industry by delivering the services that customers actually wanted. It was not about the movies it had in stock, because these were the same with Blockbuster or any other established video rental business. To them it was about how customers can get the best out of what they had to offer.

Blockbuster was too confident in their brand and their reach that failed to see the threat from the online rental business, meanwhile Netflix took advantage of their slow entrance to build a market and leverage on growing technology (DVD) that took off really quickly.

Netflix exhibits dominant economic characteristics in the online movie rental business. They enjoy strong market size and growth rate when compared to rivalry competition. The number of rivalries are increasing, and the market remains dominated by only a few sizeable rivalries like Blockbuster Video, Wal-Mart, Walt Disney Movies and Movielink’s Downloadable Movies. Netflix is determined to offer new and innovative technology to sustain their competitive advantage.

In Netflix’s own description of its vision for sustainable long-term future, the company describes a few critical elements necessary for growth [Netflix.com]. Its vision encompass the evolution of internet TV, replacement of “linear TV” by the internet TV, development of interactive applications, and enhancement of streaming capability to virtual limitless access capability.