Depend on innovation to create a differentiated

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depend on innovation to create a differentiated product and services which are difficult to imitate provide an organization with a competitive advantage (Teece, 2010). Already leading OTT providers to deny competitor license for steaming their original content which gives them monopoly as in the case Disney plan to show future episodes of "Star Wars" in-house (Lee, 2017). As more and more content producers shit to this approach, it may be difficult for streaming service providers that are not producing their shows to cope. Furthermore, if Netflix is not interested in keeping original content in-house, it can make a profit by licensing its shows to its competitors. To stay competitive and avoid IP rights issues Netflix has acquired film production organization to boost its position in developing original content. The company acquisition of Millarworld a popular comic book publisher improves its ability to create more original content from in science fiction and fantasy genre an provides the company with the chance to expand in consumer products (Richwine and Medhora, 2017). Therefore with a comic book that offers the
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NETFLIX ORGANIZATION ASSESSMENT 4 potential to adapt character into shows together with the organization massive spending in production as has plans to buy ABQ Studios is set to improve its productions in coming years (Shaw, 2018). Such acquisitions are in line with the organization goal and objective of producing original content. Today most critics are concerned with the cost of creating original content however they fail to note that this approach helps Netflix cut down on licensing fee and even if the return might be limited in the long run the company will benefit from this investments. Netflix Financial Competitive Strategy The soaring debt of Netflix is among the issues that critic of the organization cite to spurt their claim that Netflix is using unstainable strategy. However, the company has demonstrated that it can continue to thrive even with negative cash flow. First, when Netflix is creating original content, they are making long term investments unlike when acquiring from other producers. This strategy ensures that Netflix acquires permanent assets with more value while short team projects are temporary assets that cover the license duration. Lee (2017) observed that Netflix continues to show a profit as it uses accounting rules that allow entertainment companies to factor in production cost after the release of their content. Therefore the long project invested in production will be counted only after completion and publication of such shows which allows Netflix to operate with negative cash flow. Also as Netflix continues to invest in more quality content, there is an increase in the number of subscribers despite the tight competition in the industry. The increase in number subscribers can be attributed production of high-quality original content that helps promote customer loyalty (Fragata & Gosseli). Even with the high debt, Netflix can take pride from the high number of paid subscribers that the organization has
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