Competitive Advantage In The Movie Industry

Netflix is one of the leading movie industry big players after starting off as a computer mail based company. The company later expanded to DVDs and Bru-ray movies which are sold over ten million subscribers. Established in 1997, the company continually faced stiff competition from a leading video market player, Blockbuster. Being the main competitor or player in the industry, Blockbuster had established physical premises where it rented out these premises thus amassing a huge asset base. In the early 90s, the business model was very lucrative for the company until the market trends started changing and the likes of Netflix came to being.

In order to penetrate the market, Netflix created customer convenience by introducing the mailbox delivery

Through the use of technology, Netflix has an oligopoly market structure. This can be substantiated by the hurdles the company requires to overcome to penetrate the industry. As a start, there are stringent copyright laws which can restrict the company from doing business thus proving costly to establish itself in the movie industry. As mentioned above, Netflix capitalized on creating convenience to the customers and granting them autonomy on what to watch and

The following are the main strategies that Netflix could use to maximize its profits in the long run (Liu, 2015).

• Differentiation strategy As a marketing strategy, this method tries to come up with a competitive advantage through supply and product promotion unique to that market.

• Focus strategy

With the focus strategy, the business lays or centers all its attention to different preferred markets to concentrate its products in this case movies. This can only be achieved by identification of the market needs and interests of the market under focus. Subsequently, the business customizes the marketing methods which reflect the same characteristics.

• Cost of leadership In order For Netflix to compete with other market forces, this strategy will require bringing down its operational and production costs much lower than its competitors. Netflix has in the past tried this method though it did not give the desired results. For it to be successful, the company is supposed to use high scale technology in minimizing its operational and production cost.

Competitive strategies in relation to macroeconomic