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Netflix: Entering a Brave New World

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Chapter 4: "Netflix: Entering a Brave New World"
Q 1. Some of Netflix’s capabilities and core competencies are mentioned in the case. Go to the firm’s Web site (http://www.netflix.com) and use other information sources as well to see if you can identify additional capabilities and core competencies. Do you think the core competencies mentioned in the case and/or the ones you found are valuable, rare, difficult to imitate, and nonsubstitutable and as such, are also competitive advantages? Why or why not?
Answer
The core competencies of Netflix lie in primarily its model customer-care and customer-service, which entails the fact that Netflix is well aware and knowledgeable of its customer and his preferences. Another core competency that has helped the business grow is its IT management and development. Moreover, Netflix merges these two core competencies to gain a higher competitive advantage over competitors Hitt et al, (2007) states that Netfix uses the advanced technology to track customer preferences for movies. This let it tailor availability of services and products accordingly. In addition, it allows Netflix to stay ahead of competitors as well as a chance to make customers happy, by delivering the content they want at their doorstep. Netflix meets these two primary objectives everyday through focus and consistency, which are part of the company’s competencies; thus it allows maximum competitive advantage over other market players. Although, these competencies are not difficult to imitate and implement by the competition, the execution and the effectiveness of the application as managed by the customers, making the latter an important tool for creating a pleasant brand image and experience, appreciate Netflix. This brand image and experience is then difficult to imitate for the competition and translates into a rare competitive advantage

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