Netflix Inc Information Technology - Essay Example

? Netflix Inc. Information Technology [Part Introduction Netflix is the largest video entertainment industry in the US, and was founded in 1997 by Reed Hastings (Nelson and Quick, 2012). The company has tremendously grown over the years and has managed to beat up stiff competition in the fragile industry by combining old and new strategies to meet a wide range of its diverse customers. The company’s market divides into groups like DVD vending kiosk, mail delivery services, online rental and sales, as well as video demand services that are accessible through vast devices. Advancement in technology has boosted the video entertainment industry, with companies like Netflix gaining the most because customers can now access videos straight from home through computers, TVs, Smart phones, and even tablet devices (Nelson and Quick, 2012). The first part of this paper will analyse Netflix products, its competitors, the company’s competitive strategy as well as its value chain. Part two of the paper will evaluate how Netflix applied art and science through various information communication technologies to boost its operations. Netflix products Netflix has more than 33 million subscribers in 40 countries that can rent DVDs or download movies for a monthly fee through Netflix.com. The company also has mail delivery services where movie deliveries takes place through the US Postal services from distribution centers that are located in the major cities in the country. More so, the movies streaming reaches800 devices that include PCs, TVs, and mobile application (Nelson and Quick, 2012). This means that the company’s products and services are DVD vending, and selling physically and through the internet, mail delivery services and video demand services online. Netflix competitors Netflix has long held the leading position in the online video streaming industry, an advantage that became possible through vast factors that include its originality, the amount of content and its ability to meet the increased demand. However, the competition seems to stiffen further due to emerging competition from smaller but growing services like Redbox recent version called Coinstar that joint ventured with Version (Nelson and Quick, 2012). However, the version’s instants streaming has less one-third content compared to Netflix. The other competitors Amazon prime, who freely ships on millions of items and rented eBooks. The problem that Amazon prime has is that customers are required to purchase an entire year of prime for $ 79; hence discouraging customers (Nelson and Quick, 2012). To add up the competitor list is HBO GO owned by Time Warner, who offers unlimited access via website login. In spite of HBO Go great web interface, it still tethers to the cable networks. Vudu, Wal-Mart partner has also joined the industry, adding up the competitor list and it allows subscribers to stream instantly on Walmart.com. What is Netflix competitive strategy? The main competitive strategy that Netflix uses to beat competitors is product differentiation. This is the case because the company offers old products (movies) in new modernized ways. For instance, the company still mixes the old mail delivery and online streaming in movie delivery, which helps it target diverse customers (Nelson and Quick, 2012). This is exceptional because no other company in the industry uses the old mail delivery; hence creating a differentiation. This strategy not only creates a differentiation to the customers but also eases customer’s delivery of movies because most customers get the movies at the comfort of their homes through mail and still return them through the same mail. This convenience is a great attraction to customers who end up becoming loyal to Netflix. Netflix value chain analysis Every business should look forward to reducing logistical costs as well as perceptive sales, which eventually keep the company viable. Netflix has strategically organized its value chain because it is cable to accurately, forecast demand given that its revenue primarily comes from subscription. More so, its products are not extremely under threats by seasonality because its products keep evolving through new movies and TV shows. [Part 2] ICT tools and components used by Netflix Internet Scholars define the internet as a global network connection that connect millions of computers and other related devices in exchange of data, opinions, information, and news. To begin with, Netflix is a leading internet subscription service for watching movies and TV shows (Nelson and Quick, 2012). This means that Netflix offers internet video streaming of selected movie titles to computers and other compatible devices. Prior to Netflix using the internet to offer a variety of movies to the customers through vast devices, the internet also helps in enabling analytics and data collection processes (Davenport and Harris, 2007). Database A database is a collection of data that organized in a manner that its contents can easily be manageable, updated and accessed or retrieved. Netflix uses a Netflix’s No SQL database to store or record information on Netflix customers’ searching behavior, preferences, and movie rankings. Acquiring information first takes place through analytics, a scientific process used to transform data into insight, which helps Netflix make the right decisions. Since Netflix has over 30 million streaming customers, the company can review their behavior and preferences through the help of analytics (Davenport and Harris, 2007). Once the information is gathered and stored as a database, the data later undergoes analysis through cinematch and Netflix’s algorithm, where the preferred movies and other related information can be retrieved and utilized (Davenport and Harris, 2007). E-commerce Scholars define e-commerce as activities relating to the buying and selling of goods and services over the internet. Netflix is renowned for its e-commerce services since its invention in 1997. Though the company still uses the postal services as part of its competitive strategy, its vast customers are based on the internet, which means that the company carries out more e-commerce than paper work (Davenport and Harris, 2007). This is the case because Netflix sells its products in terms of movies via the internet and payment takes place via the same network through subscriptions that involves filling up relevant information. Collaborative Technologies “Collaborative technologies” is an obvious concept that means a collection of vast techniques put together for a purpose. Netflix is a company whose business falls under the technology industry. This means that for Netflix to be successful it must have collaborated vast technologies to place it ahead of the game (Davenport and Harris, 2007). According to our analysis, Netflix combined technologies like the internet, database, analytics, e-commerce, cinematch, algorithm among others. Therefore, Netflix success became possible through strategic application of the collective technologies put together and appropriately utilized. Conclusion Netflix is indeed an outstanding online video streaming company that has overcome stiff competition in an extremely fragile industry. Analysts claim that the company strategized on various competitive strategies that include product differentiation. More so, the company’s capability through its visionary CEO, to collaborate art and science helped the company retain its market position (Nelson and Quick, 2012). Therefore, (ICT) information communication technology is an extremely vital aspect to consider when venturing into the technology industry. This is evident because Netflix understanding as well as the proper utilization of ICT has granted it the advantageous position. References Davenport, T. H., and Harris, J. G. (2007). Competing on analytics: The new science of winning. Boston, Mass: Harvard Business School Press. Nelson, D. L., and Quick, J. C. (2012). Organizational behavior: Science, the real world, and you. Mason, Ohio: South-Western. Read More