Netflix Competitive Strategy

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Competitive Strategies
Sharlae Bevelle
Professor: Dr. James Glenn
Business 508 Contemporary Business
November 3, 2012

Determine how each corporate culture differs from the other In today’s society there are many companies that historically compete in order to maintain a significant share in the marketplace. Two companies that are well known competitors that will be discussed are Blockbuster and Netflix. Even though Blockbuster and Netflix are targeting the same group of people (movie lovers); their cultures still remain very different.
At Blockbuster, diversity means respecting and valuing differences in age, ethnicity, gender, sexual orientation, education and work/lifestyles, as well as people with disabilities. Diversity is an integral part of their business, from customer satisfaction and workforce development, to supplier relationships and community involvement. Blockbuster is dedicated to creating and maintaining an environment based on respect and inclusion for all of their employees and customers. At Blockbuster, diversity means valuing differences. It is a corporate value that must be continually developed, embraced and incorporated into the way that they do business. Originally, Blockbuster exclusively just offered DVDs in a rental environment where families could physically go out and pick the movies of their choice. Considering technology has changed and they started to receive competition, they decided to change it up a little and offer movies online as well. Blockbuster still maintains some store front buildings, but the focus of their business is now Blockbuster Total Access, which is the direct business model with DVDs and BluRays by mail and a pay as you go streaming option.
The culture of Netflix is somewhat different than Blockbuster in some ways. According to research, “From that first day in 1997, Hastings focused on the startup's culture, making it a place he enjoyed coming to every day, with people who pushed him intellectually, and a company of which he could be proud” (Copeland, M. V. 2010). He is still remaining this culture still this today. For example, the entire executive team at Netflix has been in the organization for more than a decade. They believe that the key to the company’s success stems from the trust they have with one another. This is not very likely in a lot of businesses in today’s society but Netflix has made this a part of their culture. Research shows that there was a public PowerPoint presentation titled “Freedom and Responsibility Culture” in 2009 that was drawn in by entrepreneurs all over the internet (Copeland, M. V. 2010). Within the presentation it shows that Netflix does not offer vacation policies and there are not strict compensation rules. They feel as though their employees can take the time that they need off work as long as their work is completed. When pertaining to compensation, employees of Netflix were able to choose their own stock-to-cash ratios. Their culture is actually very different from many organizations.
Analyze three (3) ways that each unique culture has benefited by the other’s competition There are many different ways in which each unique culture has benefited from the others competition. A competition between Netflix and Blockbuster has been going on for the past few years even though they are both leaders in the rental movie industry. One way that Blockbuster’s culture benefited from the competition of Netflix is that when Netflix originally started, their pricing remained cheaper and had no late fees. Research shows, “The company finds itself losing market share to a resurgent Blockbuster, which began offering a cheaper DVD-by-mail service last year—one that also lets users pick up new DVDs at any of the company’s 5,000 stores” (Gunderson, A. 2007). With this being said, Blockbuster used the tactics that Netflix was using against them. Blockbuster benefited from their competitors due to the gain of customers they received. Netflix’s
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