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Ricky ThompsonPrinciples of ManagementWillis B.2 October 2014Case Application 21. Using Porter’s framework, describe Netflix’s Competitive strategy. Explain your choice.I feel that Netflix is using the factor of “threat of substitutes” in order to compete with the other companies in the movie industry. The substitute in the movie industry that Netflix uses currently is the idea of streaming movies to television sets and devices with web capability, such as the iPad, computers, and media box devices. By using only a streaming media service as its main way to entice users to join, many people will be swayed away from going to the movies and spending nine dollars on a movie ticket, or going to the local store and buying or renting a movie.2. What competitive advantage(s) do you think Netflix has? Have its resources, capabilities, or core competencies contributed to its competitive advantage(s)? Explain.The competitive advantages that Netflix has over its competitors can be explained using just one word: streamlined. Not only does this word mention “stream” as in streaming service, but it also describes the very nature of Netflix as a company. The company focuses on one main service for the majority of its user base, which is the subscription for online media streaming. By using this core competency of focusing on one major aspect of the company and allowing it to excel, it has also allowed the entire company to flourish and try new things with the extra “padded” income that they now generate. The resources that Netflix have attained over the few years that it has been in business are staggering. They went from a little startup internet streaming service, streaming online movies to a small user base, to millions upon millions of users all across the United States.3. How will Netflix’s functional strategies have to support its competitive strategy? Explain.In order to stay competitive in the industry, Netflix must be able to complement its competitive strategy by improving the functional strategy. The functional strategy of Netflix is making Netflix accessible to every demographic across the world. Overseas markets are a major source of untapped profit and potential. Using that source of untapped profit in the future is how Netflix will stay in business for many years to come. Another functional strategy of Netflix is making Netflix the superior streaming video service on the internet. This means that it will load faster than its competitors, have more movies than any 2 competitors combined, and have the newest releases available as soon as possible on the streaming service.4. What do you think Netflix is going to have to do to maintain its competitive position, especially as its industry changes?I feel that the quality of the streaming service that Netflix provides will need to be improved over time and stay up to date with all of the new technology that will be developed in the future. There are already different kinds of high definition technology available to the general public, as evidenced by 3K technology that is implemented in only the most expensive of the smart televisions. I think that Netflix must also improve its catalog of movies and television shows that it provides more regularly to keep up with other streaming services such as Hulu and Amazon Prime. By changing the movies that they provide, they are able to hold customer’s attention for a longer period of time, and thus make a great deal of profit. ................
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