Netflix can be an online company with corporate headquarters in Los Gatos, California. Netflix was founded by Hastings who's also the CEO of the business. Netflix's key business is online rental services in the program industry. Netflix's software business services course various software products and services. Among they are DVD movies and several other software products. Despite disappointing results on its performance at the beginning, the innovative businessman sustained to tailor the business while identifying and exploiting new opportunities that offered themselves. That was when the company designed and developed a site that noticed it host millions of subscribers making it rake in huge profits. That is at 2006.
Netflix was founded at the same time when the video recording industry was mainly populated by small shops which were characterized by long product delivery time. The marketplace was dominated by the then large Blockbuster Inc. Blockbuster experienced no real marketing strategy and customer royalty was based on impulsive buying. It liked booming sales with almost 100 percent success when Netflix joined up with the marketplace.
Upon its entry into the market in 1997, Netflix noticed that the marketplace that was dominated by the brick and motor unit marketing techniques. The launch of this company was during the beginning of internet retailing. Online offering was getting an upper hand to brick and engine methods. This compelled Netflix's to release its website in 1998 that particular in the utilization of cross system technologies in service delivery. At this time, different charges models were analyzed to increase sales volume level.
Netflix was also adept at countering new entrants and developments on the market. One of this is the introduction of a video recording provision services on line.
Porter's Generic Strategy
According to Porter (1974), successful business organizations combine one or more of the common strategy options to propel it to success. Among these strategies are cost command, concentrate, and group differentiation. A critical analysis and evaluation of the circumstances study uncovers that Netflix had to various extents incorporated these strategies in its business pursuits with each general strategy contributing to the success or inability of the business in its pursuits. Netflix emphasized on the concentration strategy with the other strategies playing a minor role in the businesses' pursuits.
The differentiation strategy is where a company concentrates its work in developing a sole product then invests in figuring out and combining unique attributes that meet customer needs (Porter, 1974). Porter (1975) asserts that with the addition of value to a product and creating uniqueness in product to attract customers, customers tend to purchase the product at a higher price. That was the case with Netflix. Netflix original transfer to the market targeted the letting of videos in the movie industry. That strategy could be achieved through lately developed and future internet marketing technology which others had not incorporated in their business pursuits. The case study uncovers that Netflix's newly launched website included a search engine that empowered each customer to search and gain access to products of your respective choice. Netflix's management demonstrated such talent and ingenuity in marketing their products by using already available and founded supply chain infrastructure and technology. Among the infrastructure tools included the US's postal services. The company incurred slight bills in delivering the DVD's to the clients as these were light in weight.
In creating value and uniqueness to its products using the group differentiation strategy, Netflix endeavored to characterize its products with value, ease of use and convenience, and unique selections. That was evident when Hastings coined a term because of their customers that Amazon used to refer to its customers, eBay.
According to Porter (1975), a corporation that invests in this approach should be led by a well skilled and dedicated team. That was the circumstance with Netflix. Netflix's management was led by Hastings, a business owner at heart. Moreover, Porter affirms a company sorted out around pursuing superiority and aiming at increasing a greater benefit in the market should have a good reputation should revolve around high product quality and creativity. The truth with Netflix is excellent here. Netflix did not only give attention to DVD sales, that they had other serious factors in product development. Among we were holding a focus on video-on-demand and alternatives to VOD.
Porter (1974) argues a company may well not necessarily integrate all the common characteristics with regards to the nature of its business. An examination of the case study indicates that Netflix didn't pay much focus on cost leadership. A number of the pricing models didn't work with Netflix. One particular model involved a situation where the company spent several thousands in adverts only to gain a paltry income from such an endeavor. Netflix at times charged high rental fees for their online videos which sometimes drove its customers away. However, technology seems to have paced Netflix at an upper hand in comparison to other companies involved I the same business pursuits.
However to a big extent, Netflix integrated the generic facet of emphasis strategy. The target strategy is where a firm specializes in one company and down the road attempts to control product prices to accomplish an advantage over competitors (Porter, 1975). Netflix didn't succeed with this strategy to an appealing extent but seems to have lost some customers scheduled to that.
Porter's Five Forces
Netflix entered a market that Porter (1974) affirms is influenced by five pushes. Included in these are the bargaining power of customers, threat of new entrants, bargaining vitality of buyers, risk of alternative products, and rivalry among rivalling organizations. At Netflix, the bargaining buyer of customers was understood when despite intense marketing activities, the organization earned paltry amounts significantly below their focus on. Instead of gaining the company more customers, thus increasing the earnings, the company was facing a loss. Customers had driven sense in to the company's executives that they could determine a company's success and the model they use in costing their products. This rates element was noticeable when some customers noticed dissatisfied by the costs system compelling Netflix to rethink and bring in a new costs mechanism.
Netflix could counter new entrants by its relentless pursuits to adopt new technologies and integrate them to the service sit was offering. That was the circumstance when it moved into the field of video-on-demand. Despite the huge assets it possessed made, Netflix didn't realize quick earnings as there were no technologies in the form of hardware platforms to aid such services. Netflix is mentioned to obtain lost a chunk of income in advertising these service customers were not willing to pay for. The research study however shows that later inventions saw Netflix flourish in this field. One other circumstance was the accessibility of VOD services and the fierce conclusion Netflix had to battle off before they could easily get a foothold in this greatly dominated market by Netflix. Netflix swung into action by exploiting new technology websites which were not seen as a her opponents in gaining a company foothold.
Another make experience in this industry was the bargaining electricity of purchasers. As discussed above, Netflix had to succumb to buyer's buying action as occasionally; new innovations cannot be priced according to Netflix's dreams. That was the case with assets and powerful marketing promotions conducted by Netflix for the newly launched services, VOD.
Porter (1975) asserts that companies can endeavor to enter a market by offering substitute products which may provide the needs of current products offered on the market. The truth with Netflix is a impressive one. The research study reveals that replacement products were too below pub in contending with those offered by Netflix and the business was now enjoying an undisrupted share of the marketplace. Netflix carefully blended these generic causes to its edge.
Rivalry among competing firms found Netflix to be a runaway case. Arguments demonstrate how competition visited the degree of accusing Netflix of infringing after copy right laws and regulations in offering these videos online. This type of strike was shaken off by Netflix's professionals who argued that Netflix was offering these services just like any retail outlet could trade something, except Netflix was using the new internet technology these other firms had not put to full use.
Value Chain
Netflix's management was keen at exploiting information technology in incorporating value chain activities in its service. A striking example was when the business's turnaround time for product deliveries was dramatically enhanced through appropriate technology. Each customer who opted to remain or leave the company could be wanted to leave an responded to questionnaire about their decisions. These could be utilized to recognize the weaknesses inherent in the system and determine new methods of gratifying customer needs and desires. One particular revelation was identified with the company's ever changing rentals fees. Other value string addition activities spanned the infrastructure the business was using and its own execution of new technologies to enhance value because of its customers. Netflix's system product acquisition was also automated, with automated searches using a built-in search engine.
Implementation of IT in Netflix
To stay afloat in the already large market and maintain the customer bottom, Netflix must apply an IT infrastructure that can offer reliable support for its business trades (Smith, & Short, 2001). One of these is actually a data mining program. The data mining program could be included in the organizations' information system to assists in decision making. Netflix is an extremely customer focused company. Data mining could help boost communication, help the company compare its prices with others evaluate client satisfaction, evaluate supplier relationships, enhance personnel skills, and offer an overview of company progress and performance.
On the other hands decision support system could be integrated in to the company to assist in improving decision making from the business's data warehouse, provide real-time sales compressions, and model decision making framework (Shermis, Stemmer, Berger, & Anderson, 1991). The outputs out of this system could significantly depend on the inputs from the business's data warehouse and the decisions made could reflect the genuine potion of the business.
In addition to that, a customer associations management should be designed as it can help the management to support its old and clients, meet customer needs, and establish a good working romance with others and customers.
According to Silverman (1993), a supply chain management system if well integrated into this company could help create competitive advantage for the organization by enabling it to enhance all factors highly relevant to client satisfaction and company benefits. This technique could help the business identify key factors central to its success and enable management optimize all areas of handles in its marketing strategies and offer and acquisition logistics (Smith, & Brief, 2001).
Recommendations
Based on these talk, Netflix should consistently adjust to changing technical dynamism and new market opportunities in attaining various markets. Netflix's management should retain the services of experts on combination culture management to ensure a cross culture part is included in its pursuits. This could be the situation since newer opportunities lay outside Netflix's current market that is characterized by a fairly uniform culture. In addition to that, the organization should incorporate user-friendly software products that are cross system and appropriate for other software products to enhance usability. To maintain a big market share, the company should always incorporate faire business procedures in its pursuits. In addition to that, Netflix should endeavor to develop software that can club piracies on its products in addition to patenting its products. The business should spend money on software technology that club any could be illegitimate downloading of files or unauthorized gain access to or copying of its products. That may bar illegal consumption of its video products since it denies the company legitimate profits that could accrue from those sales. The company should continuously measure the role played out by it in propelling it to its position, the ever before changing trends on the market I terms of provision of services and other related services. It will constantly revise its ideas to make them current and relevant to the recognized changes and endeavor to incorporate new systems in its pursuits.
