Netflix Blue Ocean Market Strategy and Red Ocean Market Essay Sample
This essay sample shall deal with the application of the blue ocean market strategy in Netflix, blue ocean market features, and a discussion on the Red Ocean Market.
The Blue ocean market represents the unknown market that has not been discovered yet. It is an empty non established place with no competitors to challenge. There is no customer demand and players in the market.
One needs to discover the market area and use it for the advantage of their business. They need to get hold of the market to become the king of it with no competition.
They need to create a new market and industry by seeking new opportunities and targeting people directly. They become the first creator of demand among the people and suppliers of the services demanded.
Successful application of Blue Ocean Strategy in Netflix
Netflix became the first streaming online content provider which was an unknown concept before. It provides content including web series, tv shows, movies, films, documentaries, etc.
The organization creates its own market and create demand of the customers for their services. It gives options to the subscribers to watch any content of their choice.
Netflix has used the blue market strategy really well by innovating their own ideas and techniques to promote online content and creation of market demand. It has the best possible opportunity to grow its profit margin. It has created its own brand name worldwide in the online selling of content.
It has eliminated the stores that used to sell DVDs of movies and illegally downloaded content of films etc. Suddenly shifting from such market to online movies was a big move for them. It involved major risks and had the risk of backfiring of the plan.
Online movies with minimum subscription plans by people have reduced the need of storage capacity and easy accessibility. The price of the licenses is lower than the cost of DVDs for the number of customers that Netflix has.
People have online accounts and the website is personalized and details are not shared with others unless they are sharing your account. They have a monthly subscription to watch any content or movies without any limit and suggestions are provided on the basis if your previous preference.
DVD selling and lending stores required proper venue in the physical market which increases the cost of the product. They need to purchase movies and pay for the license. It has been successfully replaced by online content providers.
Netflix has reduced the market cost by resigning from the expenses. It provides high quality diversified movies with easy access.
Amazon Prime, HBO, and other service providers have also entered the market with the same offer for the people.
Guardian Hastings, CEO of Netflix believes that they have no competitors in the market by creating another blue ocean in the same market.
Though the blue ocean strategy has few drawbacks like this market eventually becomes a red ocean by allowing new competitors. It has huge market risks that are involved as it requires huge investment.
Customers need to made aware and educated about the benefits of the new services and it requires a lot of time.
Only a few organizations have made their name and become successful with a blue ocean market strategy and Netflix is one of them.
Features of Blue Ocean Market Strategy
- Strategic planning and the models are based on theories and not on its execution. While blue ocean strategy involves not theories but rather proven data, a survey of the market, and well-researched ideas and plans.
- The aim of the organization following the blue ocean market is to reduce the boundaries of the industry and working in a new space making the competition irrelevant.
- Consumers’ identification of value and demand and cost-efficiency. They can afford the services while keeping their value it is called “value innovation”.
- Companies can test the ideas and their viability to help them devise new ideas and opportunities with the minimum risks in the blue ocean market.
Features of Red Ocean Market Strategy
- Red ocean market strategy includes all the already existing industries in the market which make it competitive. It is an already established market with the demands of the consumers and the supply of the services.
- All the existing competitors are chasing their goal of fulfilling consumer demands and chasing for their money. Providing quality services may not be even criteria of consideration by the sellers.
- They all are in a cut-throat competitive market where they need to make the best sale and create a high-profit margin. The market competition makes the ocean red.
- Since the red ocean is an already established market the competitors have clarity of demand in products and services with no requirement of research.
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