Strategic Management : The Evolution of Netflix - Essay Example

During the early 2000s, Netflix started developing various partnerships and alliances with major movie producers such as Tri-Star Pictures and Warner Home Video under revenue sharing agreements. Revenue growth as a result of alliances and partnered agreements led the business to issue its first common stock to shareholders in 2002. This gave Netflix better financial capital and the ability to expand its business. Today, Netflix has evolved to offer customers, for a price of $7.99 per month, the ability to view unlimited streaming content which changed the supply chain for the company and its distribution systems.

Customers today pay for the service using a credit card, which gives Netflix instant access to needed revenues which improves their capital availability that can be used to improve their service delivery and available library of films and other video content. As of the start of 2012, Netflix had grown from its original staffing of only 30 employees to a total organisational staff of 2,348 employees (Netflix 2012). Netflix was required to staff enough employees to handle its physical DVD-by-mail business, support information technologies, and also fulfil customer relationship management and customer service.

Growth for Netflix was due to its lower pricing models, changing consumer preferences that made competitors such as Blockbuster quickly obsolete, and the ability of the company to give instant access to a variety of films through streaming video technologies. Between 2009 and 2011, revenue growth tripled as a result of a company that could satisfy customers through pricing and being able to give customers a much larger selection of films that was created through various partnerships and contract agreements with major film production studios.

This report looks at Netflix from a strategic view. The report