Question:
Discuss about teh Business Strategy and Work Culture of Netflix.
The main purpose of this business report is to discuss the business strategy and work culture of Netflix as the primary themes of business analysis. Netflix is one of the famous American entertainment companies which was initiated in the year 1997 and is specialized in providing live streaming video(Ir.netflix.com, 2017). The video on demand online service and selling of DVD are the two primary sources of income for Netflix.
The company has its headquarters at Los Angeles in California and follows few of the effective business strategy themes in order to increase their popularity within the target group of customers. The main purpose of the business strategy of Netflix is to provide online video service and also improve upon the working culture for the employees within the organization that will ultimately help to improve upon the organizational performance.
As the company is increasing its business in other nations across the globe, it has to implement effective business strategy and also increase the cultural diversity within the workplace of the organization that can ultimately help to increase the range of market and also improve upon the brand reputation. In the recent times, the Netflix Company has expanded the business in production of film and various television series. Hence, with diverse range of business within the entertainment industry it is important for Netflix to implement effective’s strategy as the main theme of their business and culture that can ultimately help them to increase their profit level in all over the globe.
The main purpose of the business strategy of Netflix is to fulfil their objectives of the business. With the help of the aggressive forms of business strategy of Netflix that is totally dependent on the use of the technological infrastructure, it is possible to raise the level of brand awareness among the people. The company mainly uses the forms of digital marketing that is one of the important parts of the business strategy that will ultimately raise the popularity of the business among the target groups of customers. With the help of the internal and external analysis of the business, it is possible for the management of Netflix to implement the best possible business strategy (Weill and Woerner 2013).
In the current stage, Netflix has 44 million subscribers for their online service in the United States and almost another 30 million scribers in all other 190 countries in all across the globe. With the dominance over the online digital entertainment industry Netflix has been implying aggressive forms of business strategy that is aimed to improve upon their business reputation in all over the globe. The total turnover of the company was calculated to be of $60 billion in the financial year of 2016-17 (Ir.netflix.com, 2017). In the last part of the year 2016, the company has decided to expand their business to nearly 130 nations and hence the service is able to raise their popularity.
The main business strategy that has been applied by the company is totally dependent on the technological infrastructure that is applied by the company. The company in the past has invested several technological improvements that have helped them to provide with high quality of video streaming service. The company currently has effective methods of marketing that mostly uses the digital and social media marketing, which allows the company to communicate with wide range of target customers. As in the recent years, the company has expanded in the international nations, the range of videos that distributed by the company has to be increased. The company has been able to use the strategy of mass media marketing that has enabled them to gain significant popularity in all the nations in very brief period time. The mass marketing that has been used by the company as a part of their business strategy has been one of the major cause of success in the recent times. The company also has been able to get the exclusive copyrights of several of the popular television shows.
Bushnellet al.(2015), have mentioned that with the help of the business environment analysis, it is possible for all the organization to analyse in details about all the internal and external factors that can contribute in the growth of the business in different types of market. Both the external and internal factors can also contribute in the overall growth and the expansion of the business.
In case of Netflix, both the internal and external factors have significant influence over the business strategies that has been implemented in the past years. There are various tools that can be used by the company that can be used to analyse the both the internal and external factors. The PESTEL analysis is one of the popularly used tools that can help the business organization to get detail information about the external market analysis. Few of the important parameters of this tool include the following:
Political factors:This external factor includes the operational activity of the company that depends on the regulation and business laws implemented by the government of the local region. As Netflix is one of the major global brands, it is important for them to analyse the political factors of all the local government in different nations. It is important to carefully review all the political factors that can influence the business. Business strategy of Netflix have enabled them to overcome all the barriers at the entry level in the new market in both National and local areas. They are also able to of deal with the challenge violating movable legal protocol in all the major Nations.
Economic factors: the economic Trends of the external market have also a major contribution in the business strategy implemented by Netflix that includes the consumer income level and also the current rate of inflation and interest rate. The management of the Netflix Company has gathered detailed information about the economic condition off the market that has enabled them to play a greater role in fulfilling the needs of the client and employees. The pricing of the online service has been decided upon the economic background condition of the consumer market.
Social factors: The management of Netflix has to analyse the social and cultural aspects of region in order to provide the proper kind of entertainment show that is needed. The business strategy also needs to include the proper way of analysing the technological infrastructure present within the society in order to provide the online service.
Technological factors: This is one of the major contributing external factors of business that has directly affected the strategies taken by Netflix. The total process of marketing operation and business activities of Netflix is dependent upon the technological infrastructure of the market. With the advancement of technological infrastructure and also growing popularity of the digital media has been one of the major contributing factors for growth of Netflix Company. Hence, the technological infrastructure of any local market has direct implication on all the major business strategies executed by Netflix. With advanced level of Technology is one of the major factors that have helped Netflix to gain significant competitive advantage in the entertainment industry over the past many years (Abraham 2013).
Environmental factors: In Spite of the fact that the business policies of Netflix has no direct link with environment it is important for them to implement their business strategies that will cause no harm to the local environment and ecosystem.
Legal factors: The business laws that are implemented in a market also have played a significant influencing factor for deciding the business and marketing policies for Netflix. It is important for the company to manage all the legal challenges in the external business environment in order to ensure the reputation of the company is not affected (Gomez-Uribe and Hunt 2016).
It is also important for the company to analyse the internal business environment in order to understand their strength and weakness that can have significant impact on all the major business policies. Being the largest entertainment online company in the world, Netflix has their own internal strength and weakness that has helped them to make use of the opportunity that is available in the entertainment industry and also overcome all the major threats that can compromise upon their business reputation. The swot analysis tool can be utilised in this case in order to identify the internal strength and weaknesses along with the threat and opportunity that exist within the market (McCord 2014).
One of the most important core business strategies of the company is to grow in the sector of online media. One of the major strength of the company in this context is that they are able to develop an ecosystem where, they are able to provide online streaming service in all devices that are being connected with Internet. Hence, they are able to encourage more people to subscribe on their online media service. With growing number of online subscribers currently Netflix is the largest company in the world that provides online video streaming service. As more people are preferring to watch the latest movies in their mobile and computer equipment’s the popularity and demand of the service of Netflix is growing tremendously in recent times.
One of the major weaknesses of the company is due to the fact that most of the online services that are provided by Netflix are highly expensive and hence, they are not able to afford the service. Nevertheless the company has to provide huge amount of cost in order to purchase the licence for the latest movies and other television shows, which thereby increases the cost of the service that they are providing. The price of subscription for online membership has also increased tremendously in the past few years. Moreover, since 2013 the DVD and Blue Ray service of Netflix has declined totally due to the fact that people are able to watch their online shows with the help of Smartphones and other digital devices. Another major weakness that has affected the business strategy of Netflix is due to the fact that where service is limited to market areas only where there is high Internet bandwidth available (Aversa 2014). Hence, they are not able to expand their market in various remote areas due to the fact that the technological and digital infrastructure is limited.
With expansion in the international and global market Netflix has able to gain excellent business opportunity that has influence upon their business strategies. By conducting online customer service in various market areas Netflix has been able to get the idea about the popular television and movies that are popular in any particular area. With the aggressive mode of business strategy this possible for Netflix to provide their online service in all types of digital devices that are available in most of the households. Moreover, as the business strategy of Netflix includes promoting their service through digital marketing, we are able to gain popularity among wide range of customers without having to spend huge amount in marketing activities.
In the recent times Netflix accounts for nearly 30% of the daily Internet traffic (Gomez-Uribe and Hunt 2016). However, with neutrality laws that are implemented in Internet service Netflix can face the threat of huge debt and thereby has to cut cost on their expenditure. The company also has to face threat from other online media service provider, who is providing with live video streaming that includes Amazon Prime and YouTube. The high price of purchasing online licence for various movies and television shows has also been one of the major threats that reflected on the business strategies implemented by Netflix (Afuah 2014).
Hence it can be said that all the major business Strategies and policies implemented by Netflix in the recent times is directly influenced by all the major internal and external factors that has helped them to develop a worldwide market in the entertainment industry. In spite of tough level of competition in the respective domain, Netflix has been able to gain a reputation among the target group of customers in all the major nations of the world.
Netflix is a great workplace, which combined stunning colleagues with hard problems. The culture of the organization remains on how the people works together to grow and serve their members. Continuous improvement is embedded in company’s culture. The company’s culture has been instrumental to the success, upon which the improvement is a continuous process. As a result the organization is able to retain potential employees and attract others, which also help to work people with satisfaction here. Two core elements of the company’s culture are “freedom and responsibility”, which promotes employees to seek excellence in a collaborative practice (Trompenaars and Hampden-Turner 2011). Like many other company Netflix is striving for hiring the best employees, while valuing the excellence, integrity, respect and collaboration of the entire Netflix team. The core philosophy of the organization is “people over process’; it means that the organization is working with a trustworthy employees as a dream team. This approach helped the organization to be more flexible, stimulating, inventive, creative, fun loving and successful organization. The Netflix culture is unique and special compared to others, in the following terms:
The organization defines its seven aspects of Netflix culture that are as follows:
Alike other organizations, Netflix also has some specific values, which are nourished by their management in their employees. For instance, the organization is particularly giving value to some behaviors and skills in their employees, which are demonstrated in the people who are being hired or promoted in the organization (Chaney and Martin 2013). Therefore, it can be said people, who poses these attributes, are potentially nourished in this company. These core values of the company are demonstrated below:
The people in the organization need to make wise decisions despite ambiguity, have to identify root causes and get beyond treating symptoms, people are good at using data to inform his intuition, employee need to strategically, be able to articulate, the key roles and responsibilities of each employees and most importantly the employee should make decisions in a long-term manner (Becker 2013).
The employee need to have good enough communication skills, need to concise and articulate in speech and writing, should listen well and seek to understand before reacting to any circumstances. The employee should maintain calm poise in critical contexts in order to draw out the transparent thinking. Versatile language knowledge should be gathered, for instance, employees need to adapt such a communication style that works well with people from diverse cultural and linguistic background, who cannot share the native language. People also need to provide honest and timely feedback to their colleagues (Howson 2013).
Innovation is one of the key elements for continuous improvement process in the business. Thus, like any other company, Netflix thrives for innovation. The organization creates new ideas, which are useful for the organizational growth and sustainability. In order to deal with critical problems, the employees can re-conceptualize issues for finding out best solutions. To challenge prevailing assumptions and suggest better approaches, the organization and its team is giving their best effort (Slocum and Buller 2014). People who are thriving to minimize complexities and finding the ways to simplify things are most welcome in the organization. Change is the key to involve innovation in the organizational culture. Thus, people who admire change can sustain in the organization in a long term way.
In this company, people can learn rapidly and eagerly; are able to contribute out of expertise work with great potentiality. Here, people seek to understand the members around the world, like strategy, market, customers and suppliers; and the ways to entertain them; through seeking alternative perspectives (Hitch 2012). Employees need to broadly knowledgeable about business, technology and entertainment.
Courage is one of the elements that a potential employee should possess. Employees should show enough courage to say what he thinks; even it is harsh or controversial. Taking risk is a crucial characteristic trait of potential employees. Thus, employees should be able to make confident and tough decision without agonizing (Hitch 2012). They are able to be vulnerable, in search of truth. Employee should take action aligning with the company’s values.
It is one of the most crucial traits that an employee should possess. At Netflix, employees are known for transparency, authenticity and non-political trait. Employees should admit their mistakes. The employee should posses that much of honesty to say things about fellows on their face. They need to be non-political, while disagreeing with others.
For the employees working in Netflix, work and responsibility should be their passion. They should be care intensely about each member, in order to achieve success. An employee should have the passion to inspire others with the urge for gaining overall excellence in organizational services (netflix.com 2017). Employees are tenacious and positive. In order to achieve collaborative success, the employees need to be confident and humble enough.
The employees are effective enough to collaborate with people belonging from diverse cultural background. In order to make better decision, employees nurture and embrace differing perspectives for making the best decision. However, if it is noticed that someone is being marginalized, the employee would intervene the procedure. Instead of focusing upon the similarity of a person with the standard trait, they focus upon the talent of the employee, aligning with the value (Vogel and Fischler-Strasak 2014). Employees are able to recognize the biases the members have and work to eliminate them. It is also important to understand how different backgrounds affect at work, instead of pretending that they are not affecting the business actually.
People at Netflix think for the organization, instead of thinking for them. Instead of doing the best for him, the employees give their best effort to meet the best things for the organization. For searching the best ideas, employees are open-minded. They are enough collaborative to have times for helping colleagues, while sharing information in an open and proactive way. Helping others is the core element of being collaborative (netflix.com 2017).
Employees at Netflix work with their decisions, after thinking about the impact upon the organization. They accomplish important works, while demonstrating strong performance consistently, so that the fellow workers can trust on the leaders and management of the organization. All the procedures here are done for making colleagues satisfied (netflix.com 2017). Here, through collaborative work, employees focus on impacts of the organizational procedures.
The organization is sustaining its continuous growth and success on the basis of some basic elements, aligning with its core values. These are demonstrated below.
Dream team is built when the employees are highly efficient in collaborating with each others. According to the Netflix culture, an great organization is not a place that includes big office, frequent parties, great gyms, sushi lunches etc, but a great organization should include such a dream team, where people have common goals, for which they spend enough effort (Hitch 2012). Being a part of this team, employees perform best, learn the most, improve fastest, have enough entertainment and accomplish the most.
Netflix attempts to train its employees in such a way that they can feel a sense of responsibility for doing the correct thing for assisting the company at every domain. The goal of the organization is to inspire people more to manage themselves than managing them by the organization (Hitch 2012). The organization attempts to develop the sense of responsibility, ownership and initiative to develop responsive behaviors, which are rising naturally.
In the organization, for each potential decision, Netflix provides a responsible captain, who is able to make a judgment, understanding other’s views (netflix.com 2017). The organization does not thrive for making decision by a committee vote or something; but when the captain is significantly confident and correct; the decision is processed into action.
The organization gives employees enough freedom to control their own decision. The organization seeks employees for being great decision makers and consult with the managers, if they are facing trouble for right decision. The leaders need to set clear context at every level, which drives the information to the fellow employees, to take their own decision (netflix.com 2017).
Conclusion
With the help of effective business strategy and market expansion, it is possible for Netflix to gain significant reputation in the online digital entertainment industry. As the company has expanded in almost all parts of the globe, it is important for them to have unique marketing policy in order to deal with different type of business environment. Has the demand for online video streaming service have increased among the people of all age, video streaming service have increased among the people of all age, the business of Netflix has easily been able to expand in their range in almost all the nations of the world. The use of digital media marketing along with social media marketing has enabled Netflix to gain wide range of popularity in very short period of time. With detailed analysis of external environment of business Netflix has been able to make full use of all the business opportunity that is available in the entertainment industry using online media. By using the tools of external market analysis, Netflix has successfully been able to imply effective marketing strategy that has enabled them to gain significant competitive advantage in the entertainment industry and thereby have enabled them to deal with all the challenges that exist in the external business environment. The company also has been able to use their strength to greatest advantage that includes popularizing their online media service in all types of digital gadgets that are available in almost every household. Nevertheless, the high cost of Internet service and also lack of technological infrastructure has been few of the major barriers of the business strategies that have been implemented by Netflix. It is also evident from the fact that, with various new competitors in the entertainment industry, Netflix has to face to challenge in their respective domain in order to maintain their popularity among the target group of customers.
On the other hand, the workplace culture of Netflix has been able to diversify in wide range due to the fact that there are employing workers from all across the globe. With the code element of company’s culture, it is possible for Netflix to gain white popularity and reputation as one of the trustworthy agency to provide secured jobs for the employees. As the company is able to encourage the workers to participate in all the important decision making process that ultimately help in the business strategy, it is possible for them improve the work culture and also create a healthy atmosphere within the workplace of the organisation. The overall work culture within the workplace of Netflix has enabled them to have effective organizational performance and also have high level of motivation among the workers.
Reference List
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