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Netflix business, market strategies, global expansion

Netflix is an OTT platform that provides a wide range of TV shows and movies. In the year 1997, Reed Hastings and Marc Randolph started an online DVD rental mail company called Netflix, to exploit the growing demand for online services.

In this post, I tell about how Netflix improve their technology and early adoption help them to grow as compared to it’s their rival’s offline retail-chain stores like a blockbuster, Hollywood videos, and Movie gallery. if you want about Pepsico strategies and its business, then click here.

Netflix Business Strategy

Actions took by the company to reduce its costs

Netflix introduced new technology to reduce its cost. In 1997, mostly all companies used VHS tapes to watch movies which are costlier and bulky. VHS tape was expensive to store, pack, ship and then Randolph finds a solution and introduced an optical media DVD in his company which was new in the market.

Hastings found that DVD working well and both they decided that it helps to reduce their packing, shipping, and storing cost in the coming years.

Actions

  • Netflix creates its own transportation and shipping system with U.S postal service. Randolph’s team deeply understands the working structure of the U.S postal service and creates a good relationship with postal department employees. Employees from both postal service and Netflix work together they found an easy way to deliver rental DVDs to the public.
  • Another problem faced by the founder of Netflix is the unreliability of DVDs because large numbers of DVDs broke in packaging while transfer from one place to another. Netflix team worked on this problem. They devised a new method of packaging three-part mailer, which is made of light cardboard that can hold up to 3 disks at the same time.
  • Netflix reduced the dependability of electricity produced by non-renewable resources as they not directly connected to renewable resources to produce electricity. In Netflix larger part of the energy is used in an indirect way because its energy is used by partners who provide clouding services like AWS (amazon web services) and the google cloud platform, as well as servers, provide by the ISP network. Netflix reduced the cost of electricity by using energy created by renewable resources.

One interesting thing is that According to Wikipedia, 7 million users increased every year on this OTT platform. Now , it is available in every Country in the world except one

Netflix Strategies

Benefits the company received and action resulted in a benefit

Due to changes in the material they used to store media from VHS tape to DVD help them to reduce the cost of shipping and storing. As an early adaptation of DVD as a comparison to other competitors help them to rule the market and increase the sale of rental movies.

U.S postal services and Netflix both work together which helps them to deliver DVDs economically and on time without any breakages. This is the main factor that helps Netflix to grow rapidly in this sector. Netflix’s team sorted the DVD deliveries into 27 bags by zone and delivered straight to post office freight docks.

By innovation of new three-part mailer light cardboard help Netflix by reducing the breakage of DVDs and provide more space to place 3 disks at the same time which helps the company to reduce its operational cost.

The energy created by renewable resources helps the company to achieve sustainability because electricity produced by these resources is less carbon emission as compared to non- renewable resources. Due to involvement in sustainability Netflix joined the Green Power Partnership Program in which they commit to use green power for some or all of their operations in which electricity is used.

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