Case Work Project

Lopez

Jasmine Lopez

Netflix Case Strategic Audit

Group 2

MGMT 479

April 5, 2021

PART 1

Internal Environment

Strengths and weaknesses (SWOT)

Corporate Structure

Unitary organizational structure or also known as U-form is the corporation structure that Netflix uses. “Netflix Inc. has a U-form or unitary organizational structure that involves a hierarchy for maintaining executive control and direction throughout the organization. However, this corporate structure is relatively flat compared to many businesses that have a hierarchical organizational architecture. For example, in Netflix’s organizational chart, all the main business executives directly report to the CEO.” (Netflix Inc.’s Organizational Structure & Its Strategic Implications - Rancord Society", 2021). Their decisions marketing authority is decentralized into many unites. The main characteristics of Netflix’s corporate structure are Functional groups for online and non-online operations, Geographical divisions for managing regional market, and Divisions for various product types and operation types. The structure is clearly understood by everyone in the corporation. Most of the middle management has been eliminated thus helping the business communicate more efficiently and faster. The structure of Netflix is current with the objectives and strategies. Netflix has division for domestic and international streaming. This allows for the company to reach more customer and grow the business. “Netflix Inc.’s corporate structure is based on the business need to make rapid decisions as a way to respond to changes in the online entertainment market. This organizational structure allows the company to effectively perform against strong competitors, such as Amazon, Walmart, Apple, YouTube (Google), Disney, and HBO, among others.” ((Netflix Inc.’s Organizational Structure & Its Strategic Implications - Rancord Society", 2021).

Corporate Culture

Netflix has a set of core values for its employees; Judgment, Communication, Impact, Curiosity, Innovation, Inclusion, Courage, Passion, Integrity, and selflessness. “Netflix notes that many organisations claim to have certain values, but that they are mainly for show. At Netflix, employees who follow these values to the letter are the ones who are most likely to be promoted. The values are fully expanded upon in the manifesto, giving employees a clear road map on how to behave.” (Peakon) According to Glassdoor, Netflix has a 4.1 out of 5 stare rating. On Netflix’s website under careers, they talk about their culture and values and what they expect from their employees as mentioned before. They talk about creating the dream team and push for employees to want to do their best. “Our core philosophy is people over process. More specifically, we have great people working together as a dream team. With this approach, we are a more flexible, fun, stimulating, creative, collaborative and successful organization.” (Netflix) As of 2019, Netflix has published a report titled “Environmental Social Governance” that reports its environmental impact. “Netflix effectively sources all of its electric power from renewable sources. Where no direct source of green power is available, the company purchases renewable energy certificates (RNEs) to make up the difference. In this way, green energy powered Netflix's entire internal power consumption of 94 gigawatt hours (GWh) in 2019.” (Nasdaq)

Netflix’ diversity does reflect on the culture they present. The company has published data reflecting its diversity since 2013. “Women make up half of our workforce (47.1%), including at the leadership level: directors and above (47.8%), vice presidents (43.7%) and senior leadership (47.6%). Nearly half of our U.S. workforce (46.4%) and leadership (42.0%, director level and above) are made up of people from one or more underrepresented racial and/or ethnic backgrounds, including Black, Latinx or Hispanic, Indigenous, Middle Eastern, Asian, and Pacific Islander backgrounds. The number of Black employees in the U.S. doubled in the last three years to 8% of our workforce and 9% of our leadership (director level and above).” (Inclusion Takes Root at Netflix: Our First Report) The company does take into consideration other cultures and nations. One way they do so is by streaming certain shows and movies that reflect their culture. They provide popular shows for customers to watch. “etflix (NFLX) offers its streaming movie and television service in more than 190 countries.1 However, the content you watch at home is not always available when traveling between countries.” (Investopedia)

Corporate Resources Marketing

When it comes down to Netflix marketing strategy, they seem to be pretty successful. Their free 30 day monthly trial is probably what catches most customer’s attention. According to Statista, Netflix currently has 203.67 million subscribers. They use strategy and innovation to be successful. Again going back to their objectives and values, they carry out and execute their performance and budgets. “Netflix had 203.67 million paid subscribers worldwide as of the fourth quarter of 2020. Most Netflix subscribers are based in the United States, with the U.S. accounting for over 73 million of Netflix’s total global subscriber base.” (Statista) Netflix increases profit in many different ways. One way they do is by making predictions on certain shows or movies they release. They predict the number of people will watch a TV show or movie. Then they will queue up the cost of investment with the prediction.

Netflix is the world’s biggest online streaming services. Their performance goes above and beyond the marketing mix. The product is always reliable, it can accessed from most parts of the world where there is internet access, and the promotion continues to grow. The company operates in 190 countries around the world with the Unites States being its number one market. In the past, Netflix started off as a movie rental company where customers could subscribe and rent movies and video games. They then evolved to online streaming. This provided the company with a competitive advantages because there went any online streaming companies at the time. Netflix is constantly putting customer experience up front. Their performance has improved over the years. They have added new functions such as downloading a movie or show where you can watch offline. They change up the shows and movies every month. On top of that, Netflix now produces “Netflix Original Movies”. This alone is an advantage from competing companies because many of the customers can only watch that movie or show on Netflix. They would have to subscribe the company. They also offer content that is similar to what the viewer likes. Before Disney Plus, Netflix had a majority of the Disney movies and show. However, that has now changed. Netflix would pay the rights to stream shows and movies while the customers would pay a monthly fee that covers the profit from Netflix.

Finance

Netflix’s objective, strategies, and policies and programs are based off of Porter’s five force model. They have been a leading competitor in the streaming industry. They are consistent with the corporation’s mission, objectives, strategies, and policies with internal and external environments. The corporation’s performance is outstanding. According to the stock analysis, their revenues increase every year exponentially. No negative trends were shown on the analysis proving that they will continue to predict growth in revenue in the future. Netflix compared their business model that of Spotify business model, generic strategy, and intensive growth rates. However, within the past few years, competition has been growing. Competitive such as Hulu, Amazon Prime, and now Disney Plus have come runners up in that order. Netflix is still the number one streaming service yet.

Work Cited

Netflix Inc.’s Organizational Structure & Its Strategic Implications

2019 English David Anderson Rancord Society from

https://www.rancord.org/netflix-organizational-structure-design-organizational-chart-characteristics

Workplace Spotlight: Netflix Company Culture Focuses on “People over Process”

2021 English Ross Brooks Peakon, a Workday company from

https://peakon.com/us/blog/employee-success/netflix-company-culture/

Glassdoor https://www.glassdoor.com/Reviews/Netflix-Reviews-E11891.htm

Netflix https://jobs.netflix.com/culture

Netflix Just Started Reporting Renewable Energy Use and Content Removal

2020 English The Motley Fool Nasdaq from

https://www.nasdaq.com/articles/netflix-just-started-reporting-renewable-energy-use-and-content-removal-2020-02-09

About Netflix - Inclusion Takes Root at Netflix: Our First Report

English About Netflix from

https://about.netflix.com/en/news/netflix-inclusion-report-2021

Why Netflix Content Is Different Abroad

English Investopedia from

https://www.investopedia.com/articles/investing/050515/why-netflix-content-different-other-countries.asp

Netflix SWOT Analysis (Internal & External Strategic Factors)

2019 English Anthony Rivera Rancord Society from

https://www.rancord.org/netflix-swot-analysis-internal-external-strategic-factors

Netflix subscribers count worldwide 2013-2020

2021 English Statista Statista from

https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribers-worldwide/#:~:text=Netflix%20had%20203.67%20million%20paid,Netflix's%20total%20global%20subscriber%20base..