Netflix and Direct TV Case Study Research Paper

Netflix and Direct TV Case Study - Research Paper Example These generic strategies include cost leadership, differentiation and cost focus. Netflix has managed to woo customers over the years; for instance, it offers free trial membership to its new customers, which enables customers to try out its services. Differentiation Strategy Netflix has managed to maintain its market share via achieving a competitive advantage. This was the first company to break the norm of driving to a movie store to purchase a movie, therefore attaining a first mover advantage (Noise between stations, 2007). Other companies like Blockbuster required an individual to drive all the way to the stores to purchase or rent a movie, although this company followed in the footsteps of Netflix, shortly after. Therefore, due to technology in this industry, customers can now select from thousands of movies online and choose their favorite. In addition, customers enjoy movie shopping from the comfort of their homes or offices. The growth of online sales has contributed to the success of Netflix; indeed, over the years, the company does not charge its customers for movie return delays, unlike Blockbuster. This differentiation strategy enables Netflix to be unique compared to its rival competitors; customers are attracted to a business that caters for their needs effectively compared to other businesses. Netflix’s Target Customers Netflix targets all levels of customers by implementing a subscription plan, which enables clients to subscribe to their preferred plan. This is an added advantage to the company as all levels of customers are catered for, therefore ensuring that customers receive the best services at affordable prices. Netflix Rivals and Threats Posed In an industry, competition is evident either from existing businesses or from new entries in the market. According to the New York Times (2007), netflix experienced a heavy blow of loses due to the stiff competition from Blockbuster, which had implemented a total access program that enable d customers to swap a rented movie online for an in store movie. This strategy enabled Blockbuster to attract Netflix’s customers. DIRECTV is another rival competitor, which provides direct broadcast satellite, and delivers exemplary video experience at a much cheaper price, hence posing a threat to Netflix (form 10K, 2010, p.2). Fig 1. The competition analysis of Netflix and Blockbuster (2007) Netflix and Direct TV Netflix and Direct TV companies are seeking a competitive advantage in their operating industry; hence, they have different strategies of achieving their success. Direct TV aims at delivering the best services at all times and in any place; the company is emphasizing on quality video experience and targets the entire American population, especially with the popularity of DVRs. They are working towards breaking the norm of watching television only at home, therefore working towards introducing television and video experience any time and anywhere. Movie packages Di rect TV is a threat to Netflix, since it is competing for the same market, therefore, customers can either choose to use either of the two companies’ services, to easily access entertainment. Both companies offer services at a specific monthly fee; Direct TV offers four television packages in English language, with the minimal packager