According to Rita McGrath, there is no sustainability when it comes to competitive advantages. The idea of transient advantage is one in which advantages are short lived and constantly reinvented. When considering technologically-based businesses, such as Amazon, SnapChat and Netflix, this concept seems to hold true. In Cyrus Cohen’s Blog, he discusses the ambitious reinvention of Amazon and their plan to rework its delivery strategy in depth. He explains the external forces that urge the company to make such changes in their operations. Similarly, in Hedy Hong’s blog, Snapchat’s development of spectacles, a tangible product, is identified as a response to the demand for innovation and product diversity. Both blogs touch on the need for constant development to sustain a competitive advantage. It is unclear if these endeavors will result in superior profits, but it is evident that these companies are attempting and prioritizing innovation.
Netflix Logo. Digital image. Wikia. N.p., n.d. Web. 24 Oct. 2016.
Having 57.4 million subscribers in 2014 and a projected growth to over 100 million for 2018, Netflix has established themselves as a major leader in their field. However, there is a high degree of rivalry in the online streaming business that is only increasing as time progresses and new competitors, like YouTube Red and Hulu, emerge and mimic Netflix’s value proposition. How does Netflix sustain their competitive advantage? Forbes attributes the creation of original media to retention of subscriber growth of this over the top content (OTT) market powerhouse. This is undeniably true, as one of the most recent Netflix original series, Stranger Things, reached 8.2 million people in nearly two weeks of release.
What I believe to be an understated strategy of Netflix is the inclusion of popular names in their original content to bring in wider audiences. This approach eases the workload of the marking department, as less effort is required to attract viewers. The company worked with Colleen Ballinger to produce Haters Back Off, an eight-episode series that was rel
Digital image. The 100 Wikia. N.p., n.d. Web. 24 Oct. 2016.
eased a week ago on the 14th of October. In doing so, Netflix was able to capitalize on the wildly popular YouTube personality of Miranda Sings and tap into her fan base on YouTube. Similarly, casting Selena Gomez in The Fundamentals of Caring is another instance of this technique.
I would agree with Forbes’ claim, as I am constantly binge-watching Netflix originals such as the aforementioned Stranger Things and The 100. I would definitely not have a Netflix account if it weren’t for series like these. Additionally, due to the fact that my sister began using Netflix in order to watch content featuring these celebrities, I would say that Netflix’s constant stream of new ideas is incredibly effective that is sure to continue to secure large audiences in the future.
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