Netflix competes on a Differentiation/Cost Leadership strategy as their target scope is broad and they offer a fairly unique service to their customers, but also appeal to frequent renters as a low cost alternative to a traditional video rental store. They have very efficient distribution channels as well as a reputation for innovation.
2. Add two to three other competitors to the matrix. For your organization or those competitors focusing on differentiation or focus, what are the specifics?
Amazon has a cost leadership strategy as they sell a wide variety of products at very competitive prices. Blockbuster employes a focus strategy to differentiate themselves from Netflix. Since they generate a large portion of their revenues from physical stores, they have a narrow market segment, but as I mentioned in my previous post, they have moved into online DVD rentals, so they are attempting to emulate Netflixs' unique service offering, but most likely would have not done so on their own.
3. How well is your organization positioned? How might your organization be at risk (or not be as well positioned)? Why?
Netflix is positioned well on Porter's matrix, utilizing both a low cost strategy to attract and retain "heavy users" of their service as well as a differentiation strategy for those customers who don't want to spend time going to an actual store to rent DVD's. Additionally, the rating system Netflix uses suggests other videos a customer may be interested based on the unique ratings of past movies they've seen.
Netflix may be at risk to lose the low cost aspect of their business with increasing pressure from Amazon as well as profit erosion caused by increasing postage rates.
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