Our focus this week is on choosing a strategic direction that will set your organization apart from competitors in a way that enables you to stand out from everyone else. Jack refers to this as “changing the game.” Sherman refers to it as “breaking away from the pack” (Chapter 11).
Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.
Ist person to respond to is
Hello Dr. G. and Class,
Using the company you selected for your course project, identify a potential game-changing move that you believe will create a sustainable competitive advantage. This move should derive from one of the seven common moves first introduced in last week’s lecture notes.
My potential game-changing move that I believe will create a sustainable competitive advantage is a combination of Moving Into Adjacent Product Segments and New Distribution Channels (JWI, 1). My idea is for Netflix to expand into an adjacent product group and leverage its existing strong brand connection with customers while uncovering a new distribution channel that can gain access to new markets without significantly disrupting its core business and current function (JWI, 1). This will be done by offering a complimentary secondary service called “SweatFlix” which is an add-on service for $4.99 per month that offers an expansion into the home workout arena featuring a variety of exclusive workout programs created and curated by some of Netflix’s biggest stars.
This potential move should represent a possible new move the company should consider for creating even more competitive differentiation. In other words, it should not be a specific move that the company has or is currently implementing.
When evaluating this strategic option one of the questions our lecture notes ask is, “is it big” (JWI, 2)? According to the Business Research Company, the global online virtual fitness industry is expected to grow from “$11.39 billion in 2021 to $16.15 billion in 2022 at a compound annual growth (CAGR) of 41.84%” (3). Another question that should be asked is, “is it time”? With exponential growth from 2021 to 2022 as indicated in the article, now is the time to join the wave of online virtual fitness momentum caused by the COVID-19 pandemic (3). The third question to ask is, “is it us”? While fitness is a new foray for Netflix, by utilizing existing Netflix stars to work with trainers to create exclusive fitness programs is a way to leverage existing relationships and branding by offering it a reduced rate for existing Netflix subscribers and playing off of the branding aspect.
Briefly summarize how the move will fundamentally shift the playing field to the company’s advantage and beat the competition.
Our lecture notes stress that endless deliberation is not an option and that strategic decisions involve risk (1). The video streaming market is highly competitive, but no major streaming application has combined its entertainment offerings with a virtual fitness component. Amazon leverages its existing products and services base to lure viewers to its streaming platform. Netflix has brand recognition and is an industry trailblazer that can create a whole new market segment and revenue stream, one that is growing exponentially (BRC, 3).
Explain which of the four positioning categories described by Sherman (Breakaway, Reverse Positioning, Blue Ocean or Disruptive Innovation) best describes the move, and why.
I would argue that this strategy would fall into Sherman’s Breakout Positioning option (specifically the breakaway positioning). I would suggest this breakaway positioning option because it redefines how customers see Netflix by borrowing features from an already expansive virtual fitness market (4). It is a way to “imbue” Netflix’s offerings with “products and attributes are never before seen, thereby creating a uniquely appealing and sharply differentiated customer value proposition” (Sherman, 4). By combining its already significant user base, Netflix can attract new customers and new revenue streams by offering a lower-tiered combination pricing of Netflix and Sweatflix at an additional $4.99 per month or by offering Sweatflix on its own for $8.99 per month. I have chosen the $8.99 stand-alone per month price point as it is slightly cheaper than some of the other popular virtual fitness applications such as Beachbody and Centr Fit, which retail around $120 to $150 CAD per year (about $10 to $15 per month from personal experience). It is important to consider pricing in this strategy to combine two successful platforms and leverage Netflix’s significant brand recognition.
2nd person to respond is
JWI 540 Week 7 Discussion
Nikola is a designer and manufacturer of zero-emission battery-electric and hydrogen-electric
vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen
station infrastructure, driven to revolutionize the economic and environmental impact of
commerce as we know it today (1). In the past few years, with company leaders admitting to
ethical misconduct, our reputation as an industry leader has been marred. However, due to
those close-knit relationships we have been able to garner over the years that know exactly who
we are at our core and trust in our capabilities, we have been able to sustain thus far. Nevertheless, we
want more for Nikola. It is time to get our heads out of the sand but on our body armor and fight
for the future of this company.
The world is heading towards a low carbon economy; therefore, the decarbonization of fossil
fuels is increasing in importance. The trend towards decarbonization and climate change is
influencing government, businesses, and society to embrace new
technologies coupled with alternative green, renewable energy sources. With that being said, no
single energy pathway will solve the challenges associated with decarbonization, but the science
supports that hydrogen has a definite possibility to be a game-changer. Here at Nikola, we have
already embraced the technological advancements of hydrogen, as we just released our first
Hydrogen FCEV truck, Tre, in Q1 of 2022, purchased by Anheuser Busch LLC, who is so
pleased that they are promising to order up to 800 trucks once Nikola’s new facility is complete
and production officially begins (1). Nikola is also currently in talks with other strategic partners
and currently evaluating various supply chain arrangements. Furthermore, although we now see a
glimpse of sunlight behind those dark clouds that had been hovering over us, we cannot accept
the status quo; we must proceed with renewed vigor beyond the
transportation industry and place our oars in the domestic hydrogen sector with a diverse range
of applications across various venues such as a residential, commercial, and industrialized energy
sources. Nevertheless, we will need help.
Alone, we are fragile, but with the suitable mergers and strategic alliances, we can change the
playing field. We can create a new and innovative pathway to growth. The right combination of
established reliability and innovation can create “economy of scale drivers were larger
enables Nikola to negotiate better deals with suppliers and distributors, manufacturing and
selling more significant quantities of our current and future products, gaining traction in hydrogen fuel cell
infrastructure to create better-operating margins (2). But, even more so, it will also our access to a
new market segment (Energy) that would take longer/cost more to develop organically (2). Not
only will delving into the domestic hydrogen sector help to diversify our portfolio, but it will also
afford us access to research and innovation that we would not necessarily be privy to that can
also help facilitate growth in our hydrogen FCEV market, creating a more competitive edge.
The change initiative considered could be described as breakaway positioning, a sub-category of
breakout positioning. “Breakaway positioning redefines how customers see a company’s services
and products by borrowing attributes from different products/service categories to upend traditional
perception (3) completely.” With a new leader at the helm of the United States government, the future
of hydrogen fuel is looking even more promising. New investments (IIJA law), hosted by the
federal government, have created unprecedented opportunities to extend the United States’ domestic
hydrogen economy, creating opportunities for the deployment of hydrogen hubs. “The bipartisan
Infrastructure Investment and Jobs Act (IIJA) that was signed into law by President Biden on
November 15, 2021, included an unprecedented $9.5 billion federal investment in clean hydrogen,
with the vast majority of this investment ($8 billion, to be exact) directed towards the creation of a
program aimed at facilitating the development of at least four regional clean hydrogen hubs
(the Clean Hydrogen Hub Program) (4).” These endeavors would involve creating a dream team of
diverse industry leaders to bid for the development of a hydrogen hub.
1. Nikola Content Team. (2022). More game day cheers, fewer emissions: Anheuser Busch
delivers a new beer era with an innovative zero-emission fleet. Nikola Motors.
2. JWI 540 Week 6 Lecture Notes
3. JWI 540 Week 7 Lecture Notes.
4. Friedman, E. and Reiter, B. (2022). Hydrogen hubs are coming. Nixon Peabody.