Question

1. Chapter 4 addresses the nature and sources of competitive advantage. Why could other streaming companies have difficulty in copying what Netflix has done to create a competitive advantage?

Answer 1

Netflix has established itself as a pioneer when it comes to digital entertainment streaming and therein lies its competitive advantage. Although their business model is simple, pricing is comparatively higher than the competition, the fact that Netflix started early in the development stage of the digital content market has allowed it the ability to establish its brand image better with the target customers. The content is curated to the highly active population that has the most spending potential but the fact that Netflix produces some of its own content as originals is the reason why it has set itself apart. The team “original content” could be considered to be coined by Netflix itself whereby, the exclusivity of its content, quality of its service and application as well as a wide range of content sitcom has developed Netflix into its market leader, where companies like Amazon, while financially no more capable, cannot achieve the same level of customer support.