There are many parts that
make up a successful strategy of the firm. Analyzing a firm such as Netflix,
from a resource-based view, makes it clear that they have great competitive
advantage. The assets (whether tangible or intangible) along with
organizational assets, Netflix resources in these areas are quite valuable to
their competitive strategy. This can be demonstrated by looking at their
strengths and weaknesses below.
Strengths
Brand Recognition- Netflix by being the
originator of instant streaming movie service has become synonymous with the
service. The word Netflix is now treated as a verb in the same way people uses
the “Google” for search.
Accessibility- Of all the streaming
services available today, Netflix has by far the best delivery system
available. They are constantly making arrangements with various device
manufactures to include an integrated Netflix application. This increases
Netflix branding as manufactures also have included a Netflix button on
remotes.
Subscribers- Netflix has the largest
number of subscribers worldwide. This allows them to purchase content for
various markets where they have entered. They are more than an American
oriented service, but they also acquire content for around the world.
Weaknesses
Cost of Content- The cost of content was
relatively inexpensive, but now has risen considerably. Every time a content
provider rises their prices could cause problems to Netflix bottom line.
Content Ownership- Netflix is not the owner
for most of the content that is streamed. This puts them in a position to lose
content at any time.
Subscription Prices-
Subscription prices have remained the same over many years. There is a lot
pressure to raise the price, but every increase has the potential to reduce its
subscriber’s base.
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