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Write exactly 3 sentences. Question: Before they introduced streaming services, how did Netflix use innovation to...

Write exactly 3 sentences.

Question: Before they introduced streaming services, how did Netflix use innovation to gain a competitive advantage over its Blockbuster?

Solutions

Expert Solution

Competitive advantage is related to service or good which can be offered with lowe price or special features (Investopedia, 2018). Usually the competitive advantage link to distinct innovations. Regarding these details which include success components, we have here a practical case study about Netflix.

  • Netflix competitive advantage:

Netflix is video streaming which offers High Definition video for more than 23 million customers in the USA and Canada. Its bitrate rate is 3.6 Megabytes every second. The company could attract the customer and provides for the good service with a special competitive advantage. That helps it to compete with BlueStar and remove it from the competition

  • Gain a competitive advantage over Blockbuster

Although in 2010 the market had high traffic because there are many companies which offer video streaming as Blockbuster Online, Amazon Video-on-Demand, Netflix had a high market share as a result of its competitive advantage that has a variety of properties:

  1. Netflix presents the high quality of its service which is offered online or with the delivery of the videos DVD in one day only. The company service doesn’t require the customers to go to the shops for having videos. At the same time, Blockbuster has tried to open new shops in the areas that have a high quantity of customers.
  2. Netflix videos characterized by diversity and the company try to know the customers’ demand then secure the videos. That supports Netflix because it doesn't need to offer all new versions of films and series and make the customers convenient. Blockbuster’s policy depended on view new videos and decreased other kinds of film and videos, but this method didn’t satisfy customers.
  3. A while Blockbuster required additional subscription fees when the customers delay a return the movies, Netflix didn’t demand any fees for that and provided many categories for subscription and free one month. Netflix offered monthly subscription categories with low prices (approximately 8$) and each monthly price equal two videos’ rent.

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