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    Strategic MGMT Write Up

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    Kanika Jain
    Netflix uses a cost leadership strategy by offering low monthly subscription fees and eliminating rental costs. It focuses on differentiation by creating its own exclusive content and personalizing the user experience. Netflix also pursues a focus strategy by targeting specific market segments and tailoring its approach. At the corporate level, Netflix has diversified through related businesses like online streaming and producing its own shows while expanding globally. It partners with other companies through strategic alliances to distribute its content on various platforms.

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    Strategic MGMT Write Up

    Uploaded by

    Kanika Jain
    31 views3 pages
    Netflix uses a cost leadership strategy by offering low monthly subscription fees and eliminating rental costs. It focuses on differentiation by creating its own exclusive content and personalizing the user experience. Netflix also pursues a focus strategy by targeting specific market segments and tailoring its approach. At the corporate level, Netflix has diversified through related businesses like online streaming and producing its own shows while expanding globally. It partners with other companies through strategic alliances to distribute its content on various platforms.

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    Strategic mgmt write up

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    Netflix uses a cost leadership strategy by offering low monthly subscription fees and eliminating rental costs. It focuses on differentiation by creating its own exclusive content and personalizing the user experience. Netflix also pursues a focus strategy by targeting specific market segments and tailoring its approach. At the corporate level, Netflix has diversified through related businesses like online streaming and producing its own shows while expanding globally. It partners with other companies through strategic alliances to distribute its content on various platforms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    31 views3 pages

    Strategic MGMT Write Up

    Uploaded by

    Kanika Jain
    Netflix uses a cost leadership strategy by offering low monthly subscription fees and eliminating rental costs. It focuses on differentiation by creating its own exclusive content and personalizing the user experience. Netflix also pursues a focus strategy by targeting specific market segments and tailoring its approach. At the corporate level, Netflix has diversified through related businesses like online streaming and producing its own shows while expanding globally. It partners with other companies through strategic alliances to distribute its content on various platforms.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 3

    BUSINESS LEVEL STATEGY OF NETFLIX 

    Business-level strategy is a strategy designed for firm or a division of the firm that competes


    within a single business. It can be achieved by using Porter’s three generic strategies which are
    based on breadth of target market (industrywide versus narrow market segment) and type of
    competitive advantage (low-cost versus uniqueness).
    The Porter’s three generic strategies are as follows:-
     Overall cost leadership - a firm’s generic strategy based on appeal to the industrywide market
    using a competitive advantage based on low-cost.

     Netflix using cost leadership strategy that serve lowest monthly fee and low rental cost
     Pursue market penetration strategy by excellent service and low prices
     Its pricing system offers unlimited rentals by eliminating the high cost of paying for each movie 
     Netflix came with a goal of offering their service at the lowest cost possible and with most
    efficiency
     The subscription price in US is  $11 USD and in India the basic subscription starts at Rs 500/- on
    a monthly basis. 

     Differentiation  - a firm’s generic strategy based on creating differences in the firm’s product or
    service offering by creating something that is perceived industrywide as unique and valued by
    customers.
     Netflix focuses and creates its own content to maintain competitive advantage.
     Engineers developed a recommendation system to balance customer demand.
     Netflix increased their distribution centers to enable 90% of customers to benefit from one day
    delivery.
     Enables customers to have the best home viewing experience via a high degree of
    personalization on its platform interface.
     Focus – a firm’s generic strategy based on appeal to a narrow market segment within an
    industry. A firm following this strategy selects a segment or group of segments and tailors its
    strategy to serve them.
     Netflix selects a segment or group of segments (or niche) and tailors its strategy to serve them
     Netflix achieves competitive advantages by dedicating itself to these segments exclusively

    CORPORATE LEVEL STRATEGY OF NETFLIX

     Corporate level strategy means how to create value through entering new markets,
    introducing new products, or developing new technologies . It can be achieved through
    diversification which refers the process of expanding firm's operations by entering new businesses.
    Diversification can be performed in two ways: -
    1. Related businesses - a firm entering a different business in which it can benefit from leveraging
    core competencies, sharing activities, or building market power.
    2. Unrelated businesses - a firm entering a different business that has little horizontal interaction
    with other businesses of a firm. Benefits of unrelated diversification come from the vertical or
    hierarchical relationships.
     Netflix has a related corporate diversification within a single industry - movies and
    television
     In 1999, Netflix launched their DVD rental service and the diversifies to stream online
    shows and movies
     As technology advanced, Netflix kept up by partnering with consumer electronic
    companies
     Most recently, Netflix diversified by producing their own television shows
     Today, Netflix expanded to UK, Ireland, Canada, China, India , etc..
     Diversification can be performed through various methods :-
    1. Mergers and acquisitions - Mergers involve a combination or consolidation of two firms to
    form a new legal entity and Acquisitions involve one firm buying another either through stock
    purchase, cash, or the issuance of debt. Netflix merged with -
     Cox Communications joined the trend in late 2017 as well, integrating Netflix with its
    Cox Contour platform
     Netflix reached an agreement with Altice USA to add the streaming service via its
    new set-top box. 
    2. Strategic Alliances and Joint Ventures - are assuming an increasingly prominent role in the
    strategy of leading firms, both large and small.
     Netflix seems to be exploiting economies of scale by partnering with companies such as
    Apple, XBox, PlayStation, Wii, etc. 
     These companies are technological device companies that can stream Netflix's movies
    and television shows.
     Netflix and Google have a strategic alliance where both companies came together to help fight
    the recent trend of ISP’s from charging higher fees for the increased bandwidth used by video
    streaming
     In India, Netflix signed a strategic partnership with direct-to-home player Tata Sky.

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