Running head: Week 5- CASE STUDY

Case Assignment Lesson 5

Ranjan Shrestha
Kings College
Capstone
April 09, 2015

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Introduction
Netflix is a movie seller or rental service provider company through internet which was formed
in 1997 by Reed Hasting. The company formally starts its operation from 1997 by providing the
rental service facility of the movies. They are the foremost company to provide such services
which allows customers easy to watch the best movie by sitting at their own home and in their
relevant time. In 1997 they started their rental service of DVDs. The company mailed DVDs to
the members customers and after they complete to view the movies they have to return but the
return is not forceful to the customer. After some years they also starts streaming services
through internet subscription to reduce the cost which was incurred in postage and shipping of
DVDs and one of the main aim to start the streaming service to provide modern service in
digitalized form which help them change with the change in external environment. They have
expanded their market in various countries and their total number of customers at the end of
2014 was more than 50 million. This case help to define the strategies used by the Netflix to
sustain in the market and it also describes about the core competencies, resources, and
capabilities of Netflix. Furthermore the case analyze about the competitive advantage gained by
the Netflix, its production and operation process, its concern towards the people, process and
product as well as its value chain.
Q.1 Prospector, Defender, or Reactor Strategy?
As per my view, Netflix should use Prospector strategy. Prospector strategy is such type of
strategy where the firms use dynamic programs and plans to grab the new opportunities and to
expand into the new and prospectus market. Netflix should also focus on the recognizing of the
new market to increase the market share and cash the new opportunities available in the market.
Prospector strategy is the aggressive strategy among the defender and reactor strategy. Netflix

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have to focus on providing new service in the same product line. Focusing on innovation in
terms of providing product and service is the base of long term growth of Netflix and also for the
exploitation of opportunities available in the market. They have to further focus on streaming of
documentaries, short movies, live event and historical event through the internet. They should
have to expand their market to the other developed and developing countries along with the
USA. They have lots of market development opportunities in all over part of UK, France, China,
Australia, Canada, South Korea, New Zealand, Italy, and Russia and so on. Therefore Netflix
should have to use Prospector strategy.
Q.2 Answer
Netflix has proper human and technological resources and capabilities to do new innovation,
more market expansion, and satisfy the customer to be the market leader for long time and it
leads them to increase their competencies. Strong management, high brand recognition, and uses
of modern technologies are the main resources of Netflix. Providence of quality service to the
customer, effective use of latest technology, success to attract the worldwide customers, proper
allocation of available resources, unique operational strategy, proper environmental adaptation,
effective way of problem solving, appropriate decision making is the main capabilities of
Netflix. They are offering better facility and skims to the customers, improving the internal
network; provide service better than the competitors which are the main competencies of Netflix.
Focusing on the providing the value to the customers is another core competency of Netflix. All
these resources and capabilities help Netflix to increase their core competencies and bring to the
strong position in the market. Because of these resources, capabilities and core competencies
they have able to focus on teamwork, makes differentiation on product and style of providing
service, lower fixed costs, gain higher marker growth which are the main base of the huge

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success of the company. They always focus on retaining the subscribers and increasing the
number of subscribers by providing service as per the preferences of customers which help them
to uplift in the ladder of success.
Q.3 Answer
Netflix always use to focus on three functional concerns i.e. product, people and processes. They
first launch rental service of DVDs through mail. After that they started streaming service
through internet. After 2010 they also launched their service in the gadgets (mobile phone or
smart phone and tablets) also which help the customer to watch their favorite movies from any
plane of the world where the internet facility is available. First they only target on providing
commercial movies but later on they also starts to provide other category of movies and
programs also. Netflix major concern is to deliver the movies as per the choice of the customers.
They know that without customers are the foremost things to get the high level of success and
long term sustainability. They are also empowering their employees through the conduction of
several motivational programs. Netflix is treating the customers and employees as valuable
assets of the company. They are applying simple process to deliver the service. Customer can
watch their desired movies in their relevant time. The service providing process of Netflix is first
the customers mail to the company by paying some subscription charges and then the company
sent them mail through shipment or through streaming service (internet). The use of service will
be as per the choice and convenience of customers. The production and operational activities are
very effective and they are always concern to minimize the errors so that they are getting high
level of success and increasing the value of company.

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Q.4 Answer
The main Netflixs competitive advantages relative to its value chain are as follows:
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Netflix inbound logistics is very good. They are integrating with the movie makers for the
fast availability of the movies to the customer. This strategy helps them to gain the
competitive advantages.

The supply chain activities of Netflix are well managed. The supply of movies,
processing and distribution of movies to the customer is very fast. It is another source of
competitive advantage achieved by the Netflix.

Netflix is the recognized brand in the world so that it makes them easy to promote their
service and product. They are the leading company to sell the movies through the
internet.

Netflix is mainly a service oriented company so that they always concerns with
delivering fast and proper service to the customer and the unique way of providing
service help to build the competitive advantage.

Netflix has well managed infrastructure. They complete their task in time. They always
focus to use the latest technology to deliver their product and service.

Human resource management (HRM) is the key concern for the Netflix Corporation to
gain the competitive advantage and to maximize the value of the company. the
coordination between top level management and employees are very good and the
company is providing flexible working hours to the employees and the employees are
highly motivated.

Netflix Corporation performs its all task through the computer system. All processes are
fully automated so that they are getting competitive advantage.

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Conclusion
Netflix always remains in the top of the market for the reason of the effective way of analysis
and assessment of companys internal and external environment, as well as by the approach of
value chain analysis. Netflix have to drive further by increasing the strong point and reducing the
weaknesses. Similarly they must have clutch the existing market opportunities and formulate
effective strategy to grab the future market opportunities and threats have to be diminish by the
way of proper assessment of external surroundings and proper implementation of the strategies.
They should have to always focus on product, people and process for their long term success.
They must have to more concentrate on proper utilization of resources, increment of the
capabilities to maximize the core competencies and to get competitive advantages.

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References:
http://www.helpme.com/netflix/case-analysis-view.asp
http://www.macspotlight.org/netflix/company_history.html
http://www.netflix.com/operations and production/ us/en/our_story.html
http://wordpress.com/2014/03/12/value-chain-netflix.html/