How Did Netflix Build Its Sustainable Competitive Advantage? -Business Strategy and The Key Success Factors
In the year 1997, two technology entrepreneurs Reed Hastings & Marc Randolph came together and started an online DVD rental by mail company called Netflix, to exploit the growing demand for online services. The odds of the company surviving against offline retail-chain stores like Blockbuster, Hollywood Video, Movie Gallery were slim. Yet Netflix outlived them. A dot-com storm buried many well-funded technological startups. Netflix somehow withered the storm.
As the ‘online DVD rental’ was picking up, Walmart and other giant retail chains entered the fray. Amazon too explored the potential opportunities. Yet Netflix overcame those challenges and slowly established market leadership. In the last two decades, Netflix‘s global subscriber base grew to 140 million. The next competing brand is yet to reach half of Netflix’s subscribers.
What are the reasons behind Netflix’s growth? How did the brand build its sustainable competitive advantage?