...Netflix: Past, Present, and Future Innovation Entrepreneurship & Innovation Strategy: Section #2 Chuck Culp, Mike Friedman, Graham Lincoln, Quentin Reeve, and Matt Zepernick 1 Introduction Netflix is an interesting company because it sits in an ever-changing ecosystem populated by old and new economy players. On one side, you have movie and TV studios that produce feature-length movies and serialized TV shows that are, in many ways, identical to the movies and TV shows that were produced when the medium was invented. On the other side, you have a rapidly-evolving set of computer-enabled devices and data transmission systems that allow consumers to access the studios media content in virtually any location with a power source and a fast Wifi connection. As a distributor, Netflix has been forced to evolve with these changes, and changes in content consumption methods have had a major impact on the home entertainment ecosystem and the profitability and power of the players involved. The paper is organized into three sections. The first section investigates the circumstances and decisions that helped Netflix launch successfully in 1998. The second section looks at Netflix’s approach to and experience in the internet video streaming business. These sections were selected because they offer rich case studies on entering and managing an evolving ecosystem. The final section considers the future of the Company and the steps that they can take to increase value capture in the future...
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...Analysis 4 Porter’s Five Forces of Competition Analysis of Netflix 4 1.2 Opportunities and threats (Partial SWOT) 5 Part 2: Internal Analysis 6 2.1 Value Chain Model 6 2.2 Competencies Framework 7 2.3 VRIO Framework 8 2.4 Strengths and Weaknesses (partial SWOT) 9 Part 3: Netflix Issues and Challenges……………………………………………………………………………………………..10 Part 4: The selection of strategic options 11 4.1 Strategy Clock model and the Porter’s Generic Strategy Model 11 4.2 Strategic Options 12 Part 5 – Conclusions 14 References 15 Appendix 17 Introduction Netflix, set up in 2000, is a television show and movie rental Company. It slowly became a leader in this field by offering DVD-by-mail and online video streaming services. It provides a subscription based model. According to this model the customers utilize the products and services of Netflix through a monthly fee rather than a pay as you use rate. Netflix has been expanding its reach of providing services to other geographies with its two service lines to places like the UK, Ireland, Canada, Latin America and the Caribbean. Among the Porter’s generic strategies, Netflix has adapted the Differentiation/Cost Leadership strategy as their target customer base is broad and they also provided to renters a low cost alternative to the otherwise traditional video rental stores. The major stakeholders of Netflix are the content owners who provide video content to Netflix, the subscribers of this content and the equity owners. ...
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...Strategy & Technology a gallaugher.com chapter provided free to faculty & students for non-commercial use © Copyright 1997-2008, John M. Gallaugher, Ph.D. – for more info see: http://www.gallaugher.com/chapters.html Last modified: Sept. 13, 2008 Note: this is an earlier version of the chapter. All chapters updated after July 2009 are now hosted (and still free) at http://www.flatworldknowledge.com. For details see the ‘Courseware’ section of http://gallaugher.com INTRODUCTION Managers are confused, and for good reason. Management theorists, consultants, and practitioners often vehemently disagree on how firms should craft tech-enabled strategy, and many widely read articles contradict one another. Headlines such as "Move First or Die" compete with "The First Mover Disadvantage." A leading former CEO advises "destroy your business,” while others suggest firms focus on their "core competency" and "return to basics." The pages of the Harvard Business Review declared “IT Doesn’t Matter”, while a New York Times’ bestseller hails technology as the "steroids" of modern business. Theorists claiming to have mastered the secrets of strategic management are contentious and confusing. But as a manager, the ability to size up a firm's strategic position and understand its likelihood of sustainability is one of the most valuable, yet difficult skills to master. Layer on thinking about technology – a key enabler to nearly every modern business strategy, but also a function...
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...Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These developments in turn require businesses to re-evaluate the value propositions they present to...
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...Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These developments in turn require businesses to re-evaluate the value propositions they present to...
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...Models, Business Strategy and Innovation David J. Teece Whenever a business enterprise is established, it either explicitly or implicitly employs a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms it employs. The essence of a business model is in defining the manner by which the enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit. It thus reflects management’s hypothesis about what customers want, how they want it, and how the enterprise can organize to best meet those needs, get paid for doing so, and make a profit. The purpose of this article is to understand the significance of business models and explore their connections with business strategy, innovation management, and economic theory. Ó 2009 Published by Elsevier Ltd. Introduction Developments in the global economy have changed the traditional balance between customer and supplier. New communications and computing technology, and the establishment of reasonably open global trading regimes, mean that customers have more choices, variegated customer needs can find expression, and supply alternatives are more transparent. Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. These developments in turn require businesses to re-evaluate the value propositions they present to customers...
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...IMAX and digital film. These new developments have changed the way that movies are made and affect the cost and method of film production. New cameras and recording methods are required in production and this is forcing the directors, actors and other staff to adapt their techniques. Due to the vast array of technologies that can be utilized for movie production there are low barriers of entry for suppliers. The production industry has been able to maintain leverage over these new corporations through their economies of scale and their ability to influence the end user of the product. Another important technological development is the digital streaming and downloading of videos. This new technology is having both positive and negative effects for the filmmakers. The ease of digital proliferation has allowed production companies to widen their brands and make more films and television programs. This has created greater revenue for the industry. Digital streaming has made way for a new kind of company focused on this delivery method. The improvement of digital animation has also increased the profitability of production studios by lowering the operating budgets of projects without losing revenues. This new technology has bred new studios and an entirely different genre of films that cater to a specific market segment. Some of the major production studios have moved quickly to integrate these new studios. On the negative side there is an inherent danger of increased piracy...
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...on page 5 | 5 | Value Chain Analysis | 6 | 2.0 Business & Corporate level strategy | 7&8 | 3.0 Alternate strategy * Critical reflection | 9 & 10 | Bibliography/Harvard referencing | 11 & 16 | Supporting Appendices | Total word count : 2725 Inc titles/subtitles. Amazon’s Strategic Positioning. 1.0 Introduction This assignment is to establish Amazon’s strategic positioning in Europe in correlation with value innovations that may have contributed to Amazon’s success from 1995 to 2012. About Amazon Amazon is an eCommerce business based in the U.S and was started back in 1995 selling books, CD’s and other media. However Amazon’s profits were only noted in 2002 and to this day have annual sales equal to or more than $40billion with a customer base of nearly 144 million in purchase accounts and over 2 million market seller accounts. In 1998 Amazon also extended their market to the UK with an agreed takeover of Bookpage.co.uk and has since managed to establish their second biggest and most successful market overseas. Value Innovations. Since reporting profits in 2002 Amazon has invested in innovations that add value to the customer, keeps interest and encourages ease of purchasing. Some innovations that have aided in the success of Amazon tend to allow ease of use and convenience, this combined with special delivery discounts such as “super saver delivery” give customers a better or higher sense of value and satisfaction when...
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...Table of Contents Company and Background....................................................................................................................................4 Rationale..................................................................................................................................................................4 Target Audience.......................................................................................................................................................4 Company History.....................................................................................................................................................5 Legal Status..............................................................................................................................................................5 Company Issues.......................................................................................................................................................5 Vision Statement......................................................................................................................................................6 Mission Statement....................................................................................................................................................6 Ethics.....................................................................................................................................
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...| 2012 | | Prof. Gervais Victoria Skarbinski | [Netflix] | A case analysis on the movie rental company Netflix. | The major portion of revenue that Netflix derived came from its unlimited streaming plans that included either one, two or three DVD’s out at a time from the mailing system. Netflix began as a DVD rental provider that allowed customers to use the internet to select the DVD’s they wanted to rent. Netflix’s strategy so far has included offering various plans that incorporate unlimited streaming to a viewing device from the internet and a mail order system that sends physical DVD’s to the customer for an unlimited amount of time without any additional fees (so long as they still have a subscription with the company). With consumers moving toward the digital era, which Netflix has embraced, Netflix has to focus on continuing to be an innovative leader in the movie rental industry. 1. Identify the key elements of Netflix’s strategy. What competitive advantages is Netflix trying to achieve? Netflix strategy consists of at least six major elements, but its key elements consist of: * Providing subscribers with a comprehensive selection of DVD titles. * Giving subscribers a choice of watching streaming content or receiving quickly delivered DVD’s by mail. * Offering nine different variations of their service with subscription costs ranging from $4.99 to $47.99 with a free one month trial on any service. One of the most basic features that...
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...activities. In the second part, Supply Chain Management, we turn our attention to entities external to the firm and examine the activities of sourcing raw materials and delivering goods to consumers. The components are detailed below: Part I: Business Process Analysis and Improvement. We begin our study of business processes by first playing the “Lego” game. Through this exercise, we will have an overview of a simple assembly line as well as the fundamental concepts in process management, such as capacity, bottleneck, etc. Then, we study how to analyze the operational process using the case “Kristen´s Cookie Company” and further evaluate the financial value of operational improvement. In the following sessions, we will introduce Toyota production system as well as it implication in service context. We will also study the tools of quality management. We finally study the operations strategy and the product-process matrix using “Shouldice” case. Part II: Supply Chain Management: In this part, we turn our attention to the interfaces between an organization and its external environment, more specifically, to the management of relationships with partners and customers. We begin with the newsvendor model, a key tool which helps capture the trade-offs in matching supply with demand. Then, we study the coordination among supply chain partners using the case “Bose”. We will further use the Zara case to see how an innovative supply chain performs more competitively compared...
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...NETFLIX Inc. Case Study BMGT500 Submitted by: Moid Ahmad Under guidance of: Mr. Roger L. Powell Introduction Netflix Inc. is considered to be in the video entertainment industry, which distributes to consumers through movie theaters, airlines, hotels, and in-home (Netflix, Inc; 2009). Netflix and its competitors serve in-home consumers specifically through a number of alternative channels, making up the different strategic groups or segments of their portion of the entire industry which includes brick and mortar (Blockbuster) and DVD vending machine rentals (Redbox), mail delivery (Netflix and Blockbuster), and online rental (Netflix, Amazon, and iTunes), pay-per-view video (available from specialty suppliers such as HBO and Showtime through your cable provider), and on-demand services (VOD; those offered through digital cable providers), as well as brick and mortar (Wal-Mart and Best Buy) and online purchasing (Amazon and iTunes). Historically speaking, this industry began as stand-alone brick and mortar rental stores such as Blockbuster and the later entrant Hollywood Video/Movie Gallery (which for the most part were all corporately-owned, with small portions of franchised locations) and local rental businesses. They started in VHS and progressed to DVDs along with technology and household adoption. They would typically carry about 2,500 titles and performed better when copies were rented and out of the store—the longer period the better. (Spinola) This would...
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...process Chp3, 5, 7, 11&12, 13, (15&16), 17 Chp3 Page 4 Types of Performance Measure Important categories of organizational performance measures: 1. Financial 2. Customer and Market 3. Quality 4. Time 5. Flexibility 6. Innovation and Learning 7. Productivity and Operational Efficiency 8. Sustainability Exhibit 3.1 The Scope of Business and Operations Performance Measurement Measurement is the act of quantifying the performance criteria (metrics) of organizational units, goods and services, processes, people, and other business activities. Good measures provide a “scorecard” of performance, help identify performance gaps, and make accomplishments visible to the workforce, the stock market, and other stakeholders. Financial Measures • Often take top priority in for-profit organizations. • Traditional financial measures include revenue, return on investment, operating profit, pretax profit margin, asset utilization, growth, revenue from new goods and services, earnings per share, and other liquidity measures. Customer and Market Measures • Customer measures: Customer satisfaction, customer retention, gains and losses of customers and customer accounts, customer complaints, warranty claims, measures of perceived value, loyalty, positive referral, and customer relationship building. − A customer-satisfaction measurement system provides a company with customer ratings of specific goods and service features, and indicates the relationship between those...
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