Professional Documents
Culture Documents
Netflix's Competitive Advantage
Netflix's Competitive Advantage
High Rivalry Among Existing Firms - An increase in competitors due to a wider geographic
reach. Quick, accessible comparisons & competition is mostly reflected by the price offerings.
No advertising - For example, the red DVD mailers used to carry advertising but has being
stopped.
Influence of the Internet:
Amazon Prime Video – monthly/yearly rates. Includes two-day shipping, discounted
prices, video/music streaming etc.
HBO Go
Show Time (with Ads.)
Hulu (with Ads.) – includes live streaming package
Twitch (with Ads.)
High Threat of New Entrants - Reduced barriers to entry, as the internet reduces the difficulty
of obtaining critical resources or entering new markets.
Influence of the Internet:
YouTube TV - only plan available costs $40/month, with add-ons like Showtime
available for an additional monthly fee.
PlayStation Vue - For $39.99/month, users get more than 40 channels of live TV with
this plan. sports add-ons for a total of $44.99/month with additional add-on options (HBO
etc.) for an increased price.
High Bargaining Power of Buyers – More choices for customers lead to lower costs and
increased customers bargaining power.
Influence of the Internet:
Consumers bargaining power used to be low, but with more competitors in the digital
streaming market it’s increased significantly. However, since Netflix’s’ content has
originality and uniqueness, switching costs remain high.
High Threats of substitute products or services - alternatives are created by the internet and
other platforms.
Influence of the Internet:
Live Streaming
Opting Outside
Competing Against Free
High Bargaining Power of Suppliers: Companies have equal access to suppliers. it’s easier to
find new suppliers, who in turn have access to more buyers.
Influence of the Internet:
Netflix improved its optional HD streaming plan from $7.99 to $9.99.
https://www.fool.com/investing/2018/07/21/what-is-netflix-incs-competitive-advantage.aspx
https://www.stanforddaily.com/2018/10/02/netflix-machine-learning-director-talks-personalization-
software/
https://www.fool.com/investing/general/2009/04/28/7-questions-for-netflix-ceo-reed-hastings.aspx