Evaluating the Environmental Opportunities of Netflix

Environmental threats a can be used as opportunities. These opportunities are to neutralize the threat using various strategic methods. Both the threat of rivalry and the threat of substitutes can be neutralized in similar ways. A firm can compete on dimensions other than price and improve product attractiveness in comparison to its substitutes by means of methods such as cost leadership, product differentiation, cooperation, and diversification. 

Netflix is arguably the cost leader in the movie rental industry due to the fact that you can access an unlimited amount of movies for a low monthly fee. Netflix also seems to take the lead in product differentiation. Netflix offers a multitude of ways to rent movies. Costumers can access movie rentals via snail mail or using any device with internet capability. These devices include but are not limited to computers, blu-ray players, Nintendo Wii, Playstation 3, and many apples products such as the iPad, iPhone, and iPod. Netflix also cooperates with Amazon, a competing firm by using Amazon servers. A interesting article on this "coopetition" can be found here. 

Source: Jay B. Barney's Gaining and Sustaining Competitive Advantage