Management Assignment: Case Analysis Of Netflix
Question
Task:
To prepare management assignment, you are required to choose any company (MNC or SME) of your choice from any country. Students are encouraged to choose company based on their specialisation of study and write a management report
Answer
1. Introduction
Netflix Inc., selected in the present context of management assignment is an American production company, previously known as Kibble iswell known for producing over-the-top content. It is one of the most eminent organizations that is headquartered in Los Gatos, California. The organization was founded in the year 1997 by Marc Randolf and Reed Hastings in Scott Valley of California. The primary operations of the company are subscription-based service for streaming that gives the facility to stream online from a plethora of films and series which also includes the in house produced series. The initial business model of the organization was included the sales and rental of DVDs by mail. The company has its office in different countries like Canada, Brazil, France and Netherlands, Japan, India, United Kingdom, and South Korea. Netflix is also a member of the Motion Pictures Association (MPA) who are involved in distribution and production of content from all the nations all across the globe (Gregory, 2021). Since the year 2012, Netflix has played an active role as a distributor and producer of both television series as well as films. They also offer varieties of “Netflix Original” content.
2. Swot Analysis
The Swot Analysis of the Netflix organization will help in identifying the strengths, weaknesses, opportunities and market threats of the company that will help to figure the future growth strategies of the company keeping in mind the present market threats and opportunities. As one of the topmost streaming companies in the world, it has several strengths (Kim, 2018). The company can make use of opportunities for negating the threats of the market so that the business can continue thriving.
Strengths
As one of the renowned and largest online streaming company Netflix holds a huge brand reputation. It has gained high demand by streaming some of the well-known television series which helped the company to grow exponentially in recent years. The Netflix Company also has a worldwide presence and it is reasonably priced which makes it easier for the people of the South East Asian countries to afford. This has proven to be advantageous for the company which helped them to change the market scenario successfully (Kumar & Dixit, 2020). The contents that belong to the Netflix Original production team allow opportunities to a lot of budding talents like actors and filmmakers. The audiences have continued to enjoy the content that is presented by the Netflix Original.
Netflix has higher adaptability which makes it one of the biggest strengths of the company. Netflix keeps modifying its services based on the choices of the viewers and the market preferences. This is one of the prime reasons why Netflix is high on demand.
Weaknesses
Along with the strengths the Netflix Company also has a set of weaknesses that creates a hindrance for their growth in the market, one of the biggest weaknesses is having limited copyright that creates a toll on the revenue, and also the debt of the company is escalating. There is also a deficiency of original content in some countries. As a reason, they experience fewer demands for the expensive subscriptions in some of the countries. The organization's main customer base is in North America (Marple, 2017). Netflix also lacks active customer care executives which in return affects the customer care services and hugely affects the satisfaction level of the customers.
Opportunities
Due to the growing demands of the customers, the Netflix Company has got an opportunity to continually grow in the market. The demands for the OTT platforms are also growing which is a good sign for the organization and can help the company to expand and since Netflix signs up for the Netflix-only content. They can also help in expanding their other product lines like the inclusion of comic books and video games. Having a global presence allows them to strengthen their base of subscribers with the help of strategic partnerships with the local markets which help in capturing the local markets. The company can also opt for platforms other than the OTT platforms (Hazlett, 2020). Netflix has also turned down the offer of the traditional based advertising model of business.
Threats
All organizations have specific threats in the market. The market offers a whole lot of OTT services and the consumers are chosen based on their parameters. One of the biggest threats of Netflix is that they are not only OTT platforms in the market. There are several kinds of threats that Netflix is exposed to. The current situation of the pandemic has highly affected the production of original content like movies and series. Like all other industries of entertainment Netflix is also deeply affected by the pandemic, they at high threats of content piracy and a low customer base since many of the subscribers are sharing the accounts simultaneously (Lambert, 2019).
3. Ethics approach that can help the company in ethical decision making
Ethics is a discipline and a practice by which values have applied to the behaviour of human beings that results in meaningfulness. Four ethical approaches are known as the ethical decision-making frameworks. Adopting which a company can make effective decisions. The four kinds of ethical approach are Utilitarian Ethics (based on outcomes), Deontological Ethics (based on duty), Virtue Ethics (based on virtues), and Communitarian Ethics (based on community).
The utilitarian Ethics Approach is an ethical approach that thinks about the impacts of the business actions on the people. The Utilitarian Ethical Approach helps The Netflix Company is doing a cost-benefit analysis where money is considered to be the least common denominator. The parties of Netflix are expected to perform their duties ethically with integrity (Lee & Jeong, 2020).
4. CSR approach used to manage the stakeholders
CSR holds a lot of importance in every business organization. For considering the fulfilment of the CSR activities in any business four primary approaches are taken. They are the societal approach, the environmental approach, the stakeholder approach, and the economic approach. The Netflix Company can take the Societal Approach. Taking a societal approach can help the Netflix Company to set up good relations with external stakeholders like the customers. Netflix should encompass the legal, ethical, and discretionary hopes of society. This means returning to society for the consumption of these resources. On taking the Societal CSR approach Netflix should be aware of this and must try to organize food drives for the people of the local community, donate emergency relief funds and food to the people in need (Leonidou et al., 2020).
5. The way a company can instil 4 key elements to a plan
To thrive in the market the Netflix Company needs to create a strong business plan. The key elements to a plan are the analysis of the market, the competitive analysis, the market plan, and the Sales strategy. Market Analysis plays a key role in a business plan as that helps in gaining knowledge about a specific market and that the Company is planning on entering. A proper market analysis also helps in reaching out to the target customers. A good plan also presents a vivid comparison of the business with its competitors. A company shall always be aware of its competitors which can help them to strategically plan their following step (Pittinsky, 2020). The next step is a market plan that helps a company to present its services to the target customers and lastly, the Sales strategy is important for a business plan as it helps in determining how to sell the product in themarket.
6. An aspect of company culture and the way the chosen company can utilise it
Caring is an aspect of company culture. It means caring for the employees who are working in the company and also caring for the success of the company. Netflix can utilise this aspect of the company and can show more care towards their employees and by helping them grow and keep motivating them. They must be keeping inspiring their employees and also celebrate their wins (Mier & Kohli, 2021). Netflix should extend a helping hand towards their colleagues and share information proactively.
7. Ways how the chosen company can achieve unity of command, centralisation vs. decentralization, and the appropriate organizational structure
Netflix could achieve unity of command that entails achieving the subordination of the members in an organisation by integrating the major supervision under one head or maintaining the supervision under respective major executives for the diverse regional and international global viewers.
A centralization strategy would best assist Netflix to operate and induce proficient and effective functioning of all the related departments that includes functional groups for the online and offline operators, divisional groups for the diverse operational and product types, and geographical divisions for managing the multiple regional markets. A centralization strategy would help in driving economies of scale despite costly operations from the center to the regions as well as help in coordination across all the levels of the operations (Bustamante, 2016). While the divisional structure helps in catering to the operative varieties of the company, functional units provide effective integration of the functional aspects to market its online streaming services to the prospective customers and the geographical team empowers Netflix in achieving the marketability and convenience of the products offered according to the regional demands.
The span of control could be accentuated by delegating the responsibilities effectively to the eligible personnel, inducing extensive communication across all the levels and divisions of the organisation as well as tracking and monitoring all the activities ongoing in the organisation to better manage the wide-spanning operations and functions. On the other hand, formalization could be incorporated in the company by laying out a proper code of conduct that demonstrates the formal norms, disciplinary actions, responsibilities, decorum, protocols and policies of the organisation which must be abided by all the organisational members.
The most appropriate organizational structure for Netflix would be the Unitary Organisational Structure. This is because, with 84 executives and 3 subsidiaries, the organisational structure of Netflix is hierarchical though underpinned with a highly flexible structure to make the organisation capable of adjusting and adapting to the changing needs of the global market and viewers in respect to the on-streaming services. This flexibility could be very well retained with the help of the unitary organisational structure as that encompasses direct executive control across the organisation with a flatness of the structure that eliminates multiple intermediary managerial levels and facilitates feasible and speedy communication and implementation of responsibilities and instructions (Anderson, 2019).
The strategic factors that went behind the choice of the structure include the organisational tendency of expanding its operations across the world aggressively with its evolving department and teams of content making, marketing teams, and production. Furthermore, this organizational structure would enable Netflix in gaining a competitive advantage over all the potential rival media companies through proficient structured management of all the departments and functional units as well as the divisional units (Dotan, 2021).
Figure 1: Organisational structure of Netflix
(Source: Anderson, 2019)
8. A leadership theory and a motivational theory that can help Netflix in motivating the employees
The contemporary leadership theory that could be incorporated by Netflix to organize, lead, influence, and motivate is the transformational leadership strategy. This is because as per the reportage of Putter (2018), the employees in Netflix have been suffering from a “demoralising” “dysfunctional”, and “ruthless” organisational culture for fostering accountability, honesty and transparency in the organisation that ought to demotivate the employees to the core. Therefore, to address the employees’ concerns, dissents, and dissatisfactions, transformational leaderships would be appropriate as it would empower the organisational leaders in imbuing inspirations, idealised influence, intrinsic motivations, and individualised considerations (Ghasabeh, Soosay, &Reaiche, 2015).
Figure 2: Maslow’s Hierarchy of Needs
(Source: McLeod, 2021)
Maslow's Hierarchy of Needs is a well-known theory of motivation which defines the five different categories of human needs that controls the human behaviour. They are the physiological needs which refer to the need of food, water and shelter. At the next level of the pyramid comes the need for safety and security, at the third level of the pyramid comes the need of belongingness and love, then follows the need for self-respect and lastly comes need of self-actualisation. It has been estimated that as soon as one need is fulfilled an individual craves for another need. The person attains full satisfaction when he reaches the top of the pyramid. Keeping this in mind the managers of Netflix Company prioritize the needs of their employees so that they remain motivated and committed to the company (Alajmi et al., 2019). The manager must take care of the fact that an employee feel safe and secure at the workplace and that his needs of self-esteem are also met. If all the basic needs of an employee is fulfilled he will automatically feel very motivated to work for the organization.
9. Recommendations
To grow in the next 5 years, Netflix can strengthen its revenue by undertaking an advertising-based business model. The company can also try to enter a new market to expand its customer base globally (Lobato, 2019). Netflix can still enter many new countries and expand the number of subscribers with their services. They should start with targeting those countries where Netflix is yet to reach out. Many customers do not like original content they have different tastes so they must make an effort to understand their preferences and try to produce contents that can attract the customer's attention.
10. Conclusion
Netflix is one of the most renowned online streaming companies. As one of the most renowned companies, they have gained a huge customer base all across the globe and they have millions of subscribers which act as their strength. For continuing to thrive in the market Netflix must undertake the appropriate Ethical and CSR approaches as these approaches can help in decision making and building healthy relationships with their stakeholders. The Netflix Company is already present in many countries but they are yet to enter new markets so to grow in the future they must try to expand their global customer base and lend out their services to their new customers.
References
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