Executive Brief for Netflix - Case Study Example

Netflixs Executive Brief for: Netflix Re: Executive Summary The study will be focusing on the potential opportunities that Netflix might have in its business, through value creation strategy. This strategy will be applied, based upon the specific requirements of the given case. Additionally, opportunities as well as challenges that Netflix might face while creating business values will also be correlated in this study. This will be supported by certain sets of recommendations, along with its benefits and results. Consequently, actionable steps will be provided to achieve these recommendations so as to ensure that outcomes are derived as anticipated. Opportunities to Create Value Through __________ Strategic Area: Opportunities to Create Value: Challenges to Create Value: Decision Sciences Netflix has a huge opportunity to address, the changing requirements of its customers through software features delivered by Amazon Netflix has been highly dependent on software features delivered by Amazon, due to which it cannot make decisions independently Technology Netflix has grown into renowned brand in Silicon Valley, due to its software applications, as it tests the resilience of its systems Netflix’s software applications have opened doors for its competitors for instance, eBay and Intel Finance Netflix has a huge opportunity to induce stability in its financial operations and increase its market share The company has an opportunity to learn from its inaccuracies in order to increase its stock price value Its share price has moved from an upward curve position, to a scribble position The overall stock of Netflix, has been trading at a lower rate, which has negatively affected its price earnings (P/E) ratio Management Huge opportunity of customer value creation through brand differentiation in partnership with Amazon Web Services Opportunity for upgrading its cloud servers through effective usage of engineering tools Excessive usage of extra servers creates certain barriers for its managerial functions to reformat movie files Complex relationship between Netflix and Amazon have made the decision making process quite problematic Marketing Potential opportunity for expanding its subscribers base Opportunity for replicating its business model so as to enter into a different geographical place Excessive limits levied on Netflix due to its domestic market size Huge decline of returns on its services and contents Barriers to enter into the overseas market of ‘Latin America and Western Europe’ Opportunity and Challenge Overview As mentioned above, Netflix can capitalize on the software features, provided by Amazon, by providing tailored services to its customers. However, due to its dependability on Amazon for delivering service features, it is considered that Netflix cannot make vital decisions independently. The software application used by Netflix has created certain values for the company in its domestic market i.e. the United States. However, it has created opportunities for its competitors such as such eBay and Intel to take complete advantage of this application. Netflix has a huge opportunity to expand the market share through effective financial operations, but its share price has been declining significantly. Netflix’s stock has been trading at a lower rate, but the company can increase its stock price value through productive measures. Customer value creation is a potential opportunity for Netflix to increase its market existence through Amazon Web Services, but this particular aspect has adversely affected its managerial functions, due to excessive usage of web servers. Netflix through its relationship with Amazon has increased opportunities to upgrade its cloud services, whereas the decision making process has been problematic to a certain extent. The overall size of its domestic market is relatively smaller due to increased competition, although it has created opportunities for Netflix to expand its subscriber’s base. The average rate of return on services and contents provided by the company is continuously declining. Nonetheless, Netflix has a huge opportunity to replicate its business model and enter in overseas market for greater effectively. Recommendations RECOMMENDATION #1: Understanding Market Behavior Benefits and Anticipated Results Understanding market behavior is quite important for each and every company to sustain in the market for a long term. Thus, it is suggested that marketing managers of Netflix through performing a thorough market research might understand the market behavior as well as customers’ expectations and respectively, cater the needs of customers effectively. This, in turn might ensure that the declining share price of Netflix can recover to its maximum extent. Action Steps Action Steps Who When Outcome 1. Performing a thorough market research Marketing managers While providing services to the customers Better understanding of customers behavioral pattern regarding the service availed Increased satisfaction among the customers 2. Develop customer insight to a greater level Customer Relationship Manager While interacting with the customer Improved customers loyalty Better insight of customer purchasing behavior RECOMMENDATION #2: Enhance its relationship with Amazon through equal cooperation and collaboration Benefits and Anticipated Results A company in order to cater the changing preferences of the customers requires developing an innovative policy of value creation. Thus, it is recommended that successful evaluation of the existing relationship with Amazon might actually benefit Netflix to improve its services and contents development in order to meet the customer expectations. Developing proper coordination with Amazon might ultimately result in creating better infrastructure for Netflix and help in allocating both its human and financial resources to attain greater profitability as well as efficiency level. It is anticipated that an interlinkage might be created between Netflix and Amazon, which will eventually result in coordinating the activities of both the companies and create a better platform to compete in the global market. Action Steps Action Steps Who When Outcome 1. Evaluating the existing relationship with Amazon Board of Directors Board Committee Meeting Smooth operational integration amid Amazon and Netflix Competitive advantage in global market 2. Developing proper coordination Stakeholders While decision making process Better quality and high level of satisfaction High profitability and level of efficiency Conclusion / Closing Comments Value creation has been one of the most important aspects for Netflix, but there are certain opportunities and challenges that the company faces in its way to value creation. Opportunities includes increasing its market share through inducing financial stability, creating maximum value for the customers through Amazon Web Services and entering into the overseas market which will ultimately expand its subscribers base. Challenges include unorganized managerial functions, continuous decline in share prices and barriers to entry into global market. Thus, in order to capitalize on opportunities and minimize challenges certain recommendation such as understanding market behavior and enhancing relationship with Amazon has been provided. It is anticipated that these recommendations will help the company to cater the requirements of global customers and attain a global competitive advantage. Work Cited Vance, Ashlee. “Netflix, Reed Hastings Survive Missteps to Join Silicon Valley’s Elite.” Bloomberg Businessweek. 2013. Web. 17 Jul. 2014. < http://www.businessweek.com/articles/2013-05-09/netflix-reed-hastings-survive-missteps-to-join-silicon-valleys-elite> Read More