Netflix has a simple strategy, but it works. From the case it is obvious that Netflix has been growing continually year upon year. When employing the fit, competitive advantage and performance tests, Netflix’s strategy surpasses all. Even though Netflix has some competitors, they blow them out of the water with price and convenience for customers. By continually enhancing their selection and fostering relationships with entertainment companies, Netflix will continue to grow and one day be in every home across Canada.
Netflix has a simple business model and strategy. The strategy from chapter one that is most similar to Netflix is dependable strategic approach …show more content…
The Competitive Advantage Test: Can the strategy help the company achieve a sustainable competitive advantage?
The strategy can definitely help Netflix to achieve sustainable competitive advantage. By providing the online streaming capabilities to customers without pay per view fees in itself is an advantage. Once you add in the extensive library, value added peer reviews, huge levels of marketing, and low cost you get a major competitive advantage.
Customers want convenience and low cost. Netflix provides both, whereas with Blockbuster, customers need to get in the car, pick out a movie, pay ridiculous rental fees, and then pay late charges when they forget to bring it back by 12pm on the specified date. Nothing about that model sounds like a fun experience. Netflix makes it easy, affordable, and convenient all in one website.
The Performance Test: Is the strategy producing good company performance? Netflix net income has increase by 40% from 2008 to 2009, and every year before that net income has been on the rise. Net income per share has doubled from 2007 to 2009. It is safe to say that Netflix has a winning strategy that is producing very nice bottom line numbers.
Recommendations for Netflix The only recommendation would be to