Topics: Renting, Consumer theory, Strategic management Pages: 2 (440 words) Published: February 23, 2013
Major elements of the Netflix strategy constituting value chain activities are harbored in the incitement of Netflix as an online film retailer operating in a niche market. This allowed Netflix to differentiate itself relative to its competitors by strategically aligning itself with cutting edge operations that create value, specifically, operating within the bounds of consumer preferences with new technological advents, i.e. the internet. Primary value chain activities constitute the physical inception of Netflix, devised through accurately targeting the increased trend toward DVD rentals and foreshadowing the penetration into the online video market, using the internet as a resource to connect with its customers and effectively distribute movies on an individualized basis. Per the primary value activities, the sale and distribution of movies online incited the shift toward an internet movie retailer entailed utilizing the internet as the center of operations, proving more convenient to customers. Therefore, Netflix’s website was devised in a user friendly manner to search by title, actor, director or genre leading to increased personalization. A major proponent of the Netflix strategy lies in identifying its primary function to cater to consumer preferences, highlighting its core competence, expressed by, “Investing in things that are strategically relevant to customer satisfaction potential.” To this end, Netflix participates in primary value chain activities to understand its operations and distinguish between profitable endeavors that yield above average returns, specifically, investing in research and development through software engineers to produce the recommendation system, offering this service to enhance product value. Netflix employed a recommendation system as a component of their overall business strategy to individualize the Netflix experience, effectively building consumer loyalty via customizing consumer preferences. Strategically investing...
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