Netflix Sources of Competitive Advantage

Introduction

Netflix has emerged as a leading internet entertainment company in the past few years. During the last 3-4 years, it has experienced sharper growth in customer base and revenue. This has resulted from its fast global expansion. The company has expanded very fast since 2016. It delivers its online streaming services across more than 190 countries. There are more than 139 million subscribers who watch Netflix movies and shows from internet enabled screens from around the world. However, the internet entertainment landscape has grown highly competitive and challenging. Apart from the other online streaming companies, Netflix is also facing competitive pressure from social media and gaming websites. However, it is an innovative brand that is investing in differentiation and a superior customer experience.

Large customer base

The size of the company’s customer base has grown very fast during the recent years. Its services are available across more than 190 countries. The number of Netflix subscribers also grown higher than 139 millions. A large customer base has translated into better financial performance and higher revenue. There is intense competition in the online entertainment industry. However, Netflix is a customer centric brand and its customer focus has worked to grow its consumer base from around the world. Now, Netflix is eyeing a larger chuck of regional customer base from the developing economies. It has increased its number of programs in regional languages to win the local Asian customers.

Global presence

Netflix is now  a global brand. The company delivers its services around the world. Its movies and shows are accessible across more than 190 countries on any internet enabled screen. The proliferation of the internet technology has also supported the growth and expansion of Netflix. A larger number of consumers around the world are using large screen smartphones and tablets. They can streaming movies and shows from Netflix anywhere. Higher level of convenience and accessibility have also led to growth in popularity and sales globally.

Original content

Netflix’ focus has remained on consistently differentiating its services from its competitors. One of the central attractions of Netflix is the large volume of original content. Apart from licensing others’ content, Netflix is investing large sums each year on creating its own original content. While it drives user engagement higher on the other hand, it also helps differentiate the brand and beat the competitive pressure. Producing original content may be a costly affair but in the long term it is going to prove a major source of competitive advantage for the brand. Moreover, its original programs are seeing a very high degree of success.

Intuitive user interface

Netflix is an innovative company and its focus has always remained on delivering superior customer experience. Its user engagement level as customer loyalty is high. Its excellent, easy to use and intuitive user interface is also an important reason that the brand is enjoying higher popularity and customer loyalty. The user interface looks attractive, is easy to use and offers regular suggestions based upon the user’s choice. Users can set their preferences and access preferred content easily.

Customer experience

The internet industry is marked by heavy competition. Any company that wants to become the favorite of its customers must offer a differentiated and superior customer experience. It is why brands focus exclusively on customer experience and quality of services. Netflix has also focused on providing a matchless user experience. It has used features that drive higher user engagement. This has also led to higher popularity and customer loyalty. The company is also growing its investment in research and development.

Large customer base:-

The customer base of  Netflix has kept growing larger each year and grown past 139 millions. In the recent years, the company has kept expanding very fast overseas. There are Netflix subscribers in more than 190 countries. With growing customer base, the revenue and profits of the company have also grown larger. Apart from offering original and high quality content that can be viewed in HD and UHD as well as SD, the company also invests in marketing to grow its customer base and mitigate the heavy competitive threat.

Consistently growing financial performance:-

The financial performance of Netflix has kept growing better with time and this has happened due to continued focus on customer service and quality of services. The brand has expanded globally and its customer base is now nearing 140 millions. Its 2017 revenue grew to 11.7 Billion rising from 8.8 Billion US dollars in 2016. Netflix is expecting more growth in the coming years. Strong financial performance allows Netflix to invest more in research and development, production of original content as well as marketing which leads to faster expansion of customer base.

  • Sources:
  • Netflix Annual Report 2017
Abhijeet Pratap

I am Abhijeet Pratap, editor of notesmatic. I am an MBA with marketing (major). Apart from writing on various topics in business management, marketing and English literature, I like to read and write about technology.