Assessment of Netflix

Choose an industry you have not yet written about in this course, and one publicly traded corporation within that industry. Research the company on its own Website, the public filings on the Securities and Exchange Commission EDGAR database (http://www.sec.gov/edgar.shtml), in the University’s online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.

Write a six to eight (6-8) page paper in which you:

1. Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion.
2. Analyze the corporate-level strategies for the corporation you chose to determine the corporate-level strategy you think is most important to the long-term success of the firm and whether or not you judge this to be a good choice. Justify your opinion.
3. Analyze the competitive environment to determine the corporation’s most significant competitor.  Compare their strategies at each level and evaluate which company you think is most likely to be successful in the long term. Justify your choice.
4. Determine whether your choice from Question 3 would differ in slow-cycle and fast-cycle markets.
5. Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.

The specific course learning outcomes associated with this assignment are:

• Identify various levels and types of strategy in a firm.
• Use technology and information resources to research issues in business administration.
• Write clearly and concisely about business administration using proper writing mechanics.Table of Contents

  Introduction to the Innovation: 2

  Corporate level strategies. 3

  Differentiation- analysis of the selected innovation. 3

  Entrepreneurship and Start-Up Potential: 3

       Commitment to grow and sustain business. 4

       Out of the box thinking. 4

       Meeting customer demands. 4

  Business level Strategies. 4

  Application of Business Analytics: 5

  Competitive environment 6

  Conclusion. 7

  Works Cited. 8

   

   

   

  
  

  Introduction to the Innovation:

  Netflix has introduced, disruptive technology, in the traditional world of video and movies. Disruptive technology is described as the introduction of the technology through which smaller businesses can outperform their competitors especially the big rivals. Using disruptive technology, new markets and networks are created through which existing market share is captured while displacing established competitors.

  Netflix taking the advantage of the disruptive technologies announced that it would split its DVD by mail business from streaming business. Due to the change in the strategy, number of video rental businesses such as Titan and Blockbuster went into bankruptcy. It was a strategic move by the Netflix as it had started to serve underserved users of the Blockbuster and Titan. Netflix offered affordability, quality, accessibility, wide video selection, all you can watch, higher quality, low cost and high convenience to underserved customer who immediately switched to Netflix. Hence, the major share of the market was captured by Netflix while outperforming all major competitors in the market (Ostrower, 2014). Netflix has simply transitioned into everyone’s life and brought revolution in the consumer’s life (Richardson, 2011).

  Currently the stock of the Netflix trades at $ 186.82 per share, which is 300 times higher than the stock price just 3 years ago. There are number of corporate level, business level and functional level strategies which enabled Netflix to attain this position. Some of the remarkable moves are as follows:

  Corporate level strategies

  Differentiation- analysis of the selected innovation

  Netflix is considered a successful model especially with regard to outperforming the video streaming industry. For Netflix, Ex Ante phase was designing a blue print for the video streaming which is cost effective and user friendly. Initially the idea was to innovate the video/film industry by creating something of value and different so as to bring a sophisticated model to replace the traditional mode of video watching. Innovators brain stormed several business ideas and finally concluded to replace the CD with the digital streaming. Ex Ante planning was brining revolution in the industry. The evaluation method for this was based on the estimation (artificial) that video streaming would convince customers to switch to better options and prediction that 20% customer would move to new mode of technology in first six months (McCord, 2014).

  Implementation phase was exactly as predicted i.e revolution in the video streaming and wiping out all the major businesses from the industry. This was the mind lowing innovation from the Netflix and the market wasn’t expecting such innovation. The evaluation method for this was actual volume (naturalistic) of sales and Netflix’s market share. Netflix realized that the actual volume of customers switched from traditional modes to latest streaming was far higher than the estimation. Resultantly, Netflix outperformed the market and the major players in the industry (Ostrower, 2014).

  Entrepreneurship and Start-Up Potential:

  Usually startup businesses have higher potential for growth but very few businesses are able to survive and sustain. Starting a new venture is not at all easy task as it requires strategy, financials, administrative skills and commitment. In USA, IT startups are usually successful because of the innovation and customer demands. Some of the pertinent issues Netflix addressed and made part of the corporate strategy are as follows (McCord, 2014):

  ·         Commitment to grow and sustain business

  ·         Out of the box thinking

  ·         Meeting customer demands

  In order to have disruptive technologies, innovators have to be cognizant of the fact that their offering must be extraordinary enough to appeal customer. The primary strategy is to evolve an appealing business model which could convince customer to buy your offering. Business model has to be such which accounts for readiness of the products, friendliness and availability. Further, once the product is designed successfully, the next option is to focus on marketing and sales strategy i.e. social media marketing and cloud based solution to boost marketing (Richardson, 2011). Corporate level strategy is by far the most critical strategy which decides the fate of the business. In the case of Netflix, company outperformed because it was focused and well aligned with its strategic objective. Hence, corporate strategies helped company grow smoothly.

  Business level Strategies

  Entrepreneurs are very concerned about their business idea and selling propositions. Hence, commitment to innovate and invest something new is always in their mind. In order to revolutionize business, businesses must be able to adequately address customer’s needs. This could all be possible if there is out of box thinking in the business.

  Netflix formed a business level strategy i.e. to capture existing market share using the disruptive technology tool. Corporate level strategy was to create something different and business strategy was to capture share. It was perceived that disruptive technology would create a “PULL
  shift in the market and most of the customers would automatically shift to the new technology without incurring much marketing cost at the company’s end.

  As predicted, after the roll out of the disruptive innovation, few marketing efforts were needed by the company to create awareness. Most of the customers were already aware of the new technology, hence, demand of the disruptive technology suddenly increased massively. Netflix did these using motivated and dedicated teams. Only committed workers can outperform the business. Further, innovation has to be such that it could lead to development of sustainable competitive advantage.

  Application of Business Analytics:

  Business analytics can help business in identification of problems, inventing new fields of business and projecting ex ante and ex post phases of product life. The major benefit of the business analytics is designing an innovative product. Product/service can only be designed if problem is timely identified by the innovators and objectives are clear to the inventors. Innovators can only invest things if they are clear as what are their objectives and outcome expectations (McCord, 2014).

  Second major benefit of the business analytics is management of innovation. Efficient management of innovation is pertinent for the successful formation of the product/service. Innovation has to design in a timely manner so that competitive advantage could stay with the innovators, once the product is designed, me too businesses can easily copy it in developing countries. Hence, timing of the innovations are very important as in the case of Netflix, it replaced the CDs with the streaming quickly and efficiently without letting competitors design their own products. Hence, timing is very critical to the success of the product and innovation (Chakravorti, 2014)

   

  In order to make the product a successful, it is recommended that user satisfaction is properly identified and analyzed, analyze previous record of revenue generated from different products, how efficient and effective the business model is to the customers and what features make the product stand unique from the rest. Further, effective customer relationship management is another important component to make the product a success (Ostrower, 2014).

  Competitive environment

  Overall competitive environment in the USA of the video business is highly competitive. After shifting to the online mode of business, Netflix has to compete with major players such as Amazon, Apple and Google for the market share. Though Netflix was able to grasp reasonable market share of the traditional market but it has yet to prove its standing in the presence of the big players. Hence, competition in the USA got fierce. Competitive environment demand sophisticated logistics of moving DVDs and to negotiate with the Holly wood studies as the supplier power in this industry is very high and they exert high pressure on the buyers of the movie (Kopytoff, 2014). Following graph depicts the strength of Netflix in terms of its market share.

  Conclusion

  Netflix is a case study of “disruptive technology” for upcoming generations. Netflix had a competitive advantage over others in terms of inventing something new at an affordable cost and accessibility. Further, Netflix was able to lead the technology enabled market by inventing state of the art offering. In order to be successful and to employ a disruptive technology, customer orientation and relationship management must be critically analyzed. Primary task of the innovators is to (a) invent on time (b) retain the competitive edge by modifying products (c) meeting the customer needs. In the case of Netflix, all major requirements of customer relationship management and invention were adhered effectively (Richardson, 2011). 

  References

  Chakravorti, B. (2014). The New Rules for Bringing Innovations to Market. Retrieved December 2, 2017 from https://hbr.org/2004/03/the-new-rules-for-bringing-innovations-to-market

  Eggers, J. (2015). Focus On the Customers You Want, Not the Ones You Have. Retrieved December 2, 2017, from https://hbr.org/2015/06/focus-on-the-customers-you-want-not-the-ones-you-have

  Kopytoff, V. G. (2014, September 26). Shifting Online, Netflix Faces New Competition. Retrieved from New York Times: http://www.nytimes.com/2010/09/27/technology/27netflix.html

  McCord, P. (2014). How Netflix Reinvented HR. Retrieved December 2, 2017, from https://hbr.org/2014/01/how-netflix-reinvented-hr

  Ostrower, D. (2014). Netflix Instant Video Streaming: A Disruptive Innovation That’s Disrupting Netflix. Retrieved December 2, 2017, from http://www.altitudeinc.com/netflix-a-disruptive-innovation-thats-disrupting-netflix/

  Richardson, A. (2011). Netflix’s Bold Disruptive Innovation. Retrieved December 2, 2017, from https://hbr.org/2011/09/netflix-bold-disruptive-innovation

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