Strategic Planning: Netflixs Current Generic Strategy Essay

Question:

Discuss about the Strategic Planning for Netflix’s Current Generic Strategy.

Answer:

Introduction

Strategic planning is the process that is systematic in envisioning a desired future and converting this vision into widely outlined goals or objectives and a series of steps meant to accomplish them (Doyle, 2011). It involves decision making in allocating its available resources to pursue their set strategy (Simerson, 2011). This paper will focus on identifying Netflix's current strategy and spot the current approach zone of Netflix and Sky TV and explain the reasons for the choice using a strategy clock. It will also compare and contrast the two rivals' strategies and elucidate the various methods in which there can be more along the strategy clock to gain a competitive advantage over each other.

Netflix’s Current Generic Strategy

The major generic business strategy used by the firm is low cost or simply the overall cost leadership. The company provides its services at a price that is less than what any of the rivalries can offer at that moment. It is important to note that Netflix joined the market with the objective aimed at providing services at the lowest cost possible and enhanced efficiency. The company services are regarded as unique and innovative in the marketplace. They include enabled download of movies by consumers directly at home which eradicates any wait time at all and the creation of the market that suit the customers' needs.

Illustration of the Current Strategy Zone of Netflix And Sky TV Using Bowman’s Strategy Clock

Strategy clock refers to a model that is used in marketing to analyze and evaluate the competitive state of a company by comparing the efforts given by competitors (Twyford, 2012). Bowman's strategy clock is in a better position to illustrate the approach zone of the two firms because it provides a comprehensive diagrammatic representation of the various strategic options used by business to navigate the customer value map (Thomas, 2009).

Netflix Strategies

New content acquisition (6): it is expected to raise its spending on the content acquisition and to invest in real estate to build their studios.

Technology advancement (5): the company is strengthening its tech infrastructure to allow for massive streaming.

Data analytics (7): the data is used to create predictability into a similar content arrangement. It is done based on the final pricing of timeframe and exclusivity of the content which is also determined.

Line extensions (8): Netflix is partnering with global companies especially hotels to provide high-speed content free from interruptions on hotel televisions.

Differentiation (4): its services are perceived to be unique and innovative because of its frequent upgrading of the store and online rental services among others.

Overall leadership cost (1): they provide their services at a relatively lower price compared to their competitors (Jacobsen, 2009).

Large entry barriers (3): Netflix has introduced shipping facilities to enable them to reach the customers in just one business day.

Sky TV Strategies

High content (2): have invested in delivering the best variety of content across the portfolio of services.

Market leading innovation (3): they harness modern technology for the purpose of offering consumers the best viewing experience regardless of their location.

A customer focus (5): Sky TV are led by consumers on what they require by use of expertise in service delivery.

Driving efficiency (1): focuses on operating efficiencies thus consistently lowering costs.

Scaling nearby businesses (6): aims at opportunities in other sectors to grow revenue.

Selling more to customers (4): aims at expanding the variety of services and products to promote sales

Increasing pay TV penetration (8): they use the headroom for pay for growth to satisfy customer needs.

Investing for the long term (7): helps to create a business which is long-lasting.

Comparison of Netflix and Sky TV Strategies

Both the two firms have used the strategies which focus on customer needs in ensuring that they are adequately addressed. For instance, Sky TV use their expertise in service delivery. On the other hand, Netflix uses data analytics to determine the most desirable content for customers.

They also engage in investments to increase their capital base. The Sky TV is investing in long-term projects to establish strong businesses while Netflix is working on developing its studios.

Driving efficiency and overall leadership cost compare as well. The Sky TV aims at consistently reducing costs to improve customer’s welfare. Netflix uses the strategy of low costs to offer services at relatively low prices than its competitors (Ogbonna, 2006)

Sky TV strategy of markets leading innovation compares to Netflix's technological advancement plan. They aim at enhancing the viewing experience and massive streaming for customers.

The Contrast of the Strategies

Netflix uses significant entry barriers by introducing shipping facilities for the purpose of attending to customer’s conveniently in a single day. On the other hand, Sky TV uses growing pay TV penetration to ensure maximum access by clients in a day using a combination of cable and satellites.

Netflix is focusing on the production of differentiation by providing unique products and services while Sky TV strategy of selling to more customers aims at increasing sales to their current portfolio of clients.

How the Two Firms Can Gain Competitive Advantage over Each Other

Either of the company may choose to move to the west by reducing price levels thus placing its products in a high position because it is above the old value (Roosa, 2016)

Moving North by increasing customer value perceptions through more efficient market signaling and communication (Steiner, 2014)

Moving North West also increases value and lowers price hence the only move that guarantees significant market share.

Bibliography

Doyle, C. (2011). A dictionary of marketing. New York: Oxford University Press.

Jacobsen, M.-L. (2009). The art of retail buying: An insider's guide to the best practices of the industry. Singapore: John Wiley & Sons.

Ogbonna, E. (2006). Strategic Direction. Iniating strategic planning, 22(5).

Roosa, S. (2016). Strategic Planning For Energy And The Environment. From the Editor: Strategic Planning, 5-7.

Simerson, B. (2011). Strategic planning: A practical guide to strategy formulation and execution. Santa Barbara, Calif: Praeger.

Simerson, B. (2011). Strategic planning: A practical guide to strategy formulation and execution. Santa Barbara, Calif: Praeger.

Steiner, G. (2014). Strategic Planning. Free Pree.

Twyford, L. (2012). Strategic planning (1 ed.). Adelaide: Law Society of South Australia.

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