...Running head: FAILURE ANALYSIS AND CHANGE STRATEGY 1 Failure Analysis and Change Strategy LDR-531 January 2014 FAILURE ANALYSIS AND CHANGE STRATEGY 2 Failure Analysis and Change Strategy In today’s business market, for a business to succeed, they have to be open to change, be flexible, be technologically savvy, and be able to re-invent themselves to reflect what is happening in the market at the time. “Over the past decade, policy makers and the public have become progressively more concerned as success in information markets has led to a concentration of market power that allows a few firms to dominate what is increasingly seen as a commodity essential to modern life,” (Wright, 2009). The success of the economy is dependent upon the success of businesses. When a company fails, the economy will be affected by the loss of sales, consumer purchases, income, and spending cuts due to the loss of jobs. When a household has more income, spending increases; but when the income decreases for whatever reason, they will tighten the reins on spending which will results in fewer sales. This paper will analyze some of the things that have led different companies to fail and to succeed, and then how they try to apply the lessons learned to avoid repeating the events and strategies that led to failure. Part 1: Failed Business Analysis – Borders Books Business Failure Analysis Former Executive of Borders, Andi Lobdell (2012) states, “As a former executive of Borders...
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...essential evaluation that every company should consider utilizing. It reviews phases and elements of a company with the purpose of showing what aspects are working well and which ones need to be improved. By applying the SWOT analysis to Netflix, I have concluded that their strengths are, the easy stream and the accessibility that the service offers to its customers. Subscribers can enjoy their favorite shows and movies in the comfort of their home, on the go, during their lunch break and even on their mobile devices or computers. Another strength that Netflix has is their affordable monthly subscription that ranges between $7.99 and $11.99 per month which includes unlimited movies and TV shows. The additional benefits of a membership depend upon how much you want to pay each month. With the improved development of internet speed, more customers are preferring to watch their movies and TV shows online thus decreasing the usage of DVDs. This is considered a weakness of Netflix, because the company decided to separate their services into two categories: the streaming Netflix and DVD.com, a Netflix company which offers physical DVDs that are delivered by mail. The DVD by mail operations have decreased considerably in recent years and the decline of memberships is expected to continue in the future. On the other hand, a big advantage Netflix has compared to other similar services, is the growth of International markets. Netflix is present in more than 200 countries and has always been looking...
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...2014 REPRINT R1401E Trust people, not policies. Reward candor. And throw away the standard playbook. by Patty McCord How Netflix Reinvented HR SPOTLIGHT ON TALENT AND PERFORMANCE This document is authorized for use only by Janet Hughes (JAH612@LEHIGH.EDU). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. SPOTLIGHT ON TALENT AND PERFORMANCE Spotlight ARTWORK Freegums, Good Vibrations 2011, acrylic on wood, 8' x 15' This document is authorized for use only by Janet Hughes (JAH612@LEHIGH.EDU). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. FOR ARTICLE REPRINTS CALL 800-988-0886 OR 617-783-7500, OR VISIT HBR.ORG Patty McCord is the founder of Patty McCord Consulting and the former chief talent officer at Netflix. How Netflix Reinvented HR Trust people, not policies. Reward candor. And throw away the standard playbook. by Patty McCord S heryl Sandberg has called it one of the most important documents ever to come out of Silicon Valley. It’s been viewed more than 5 million times on the web. But when Reed Hastings and I (along with some colleagues) wrote a PowerPoint deck explaining how we shaped the culture and motivated performance at Netflix, where Hastings is CEO and I was chief talent officer from 1998 to 2012, we had no idea it would go viral. We realized that...
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...Netflix was founded in 1997 in Scotts Valley, California by Marc Randolph[12][13] and Reed Hastings, who previously had worked together at Pure Software along with Mitch Lowe. The idea of Netflix came to Hastings when he was forced to pay $40 in overdue fines after returning Apollo 13 well past its due date.[14] The Netflix website launched in April 14, 1998 with only 30 employees and 925 works available for rent and brought a more traditional, online pay-per-rental model (US $4 per rental plus US $2 in postage; late fees applied).[15] Netflix introduced the monthly subscription concept in September 1999,[16] but then dropped the single-rental model in early 2000. Since that time the company has built its reputation on the business model of flat-fee unlimited rentals without due dates, late fees, shipping and handling fees, or per title rental fees. Netflix initiated an initial public offering (IPO) on May 29, 2002, selling 5.5 million shares of common stock at the price of US $15.00 per share. On June 14, 2002, the company sold an additional 825,000 shares of common stock at the same price. After incurring substantial losses during its first few years, Netflix posted its first profit during fiscal year 2003, earning US $6.5 million profit on revenues of US $272 million. In 2005, 35,000 different film titles were available, and Netflix shipped 1 million DVDs out every day.[17] Netflix developed and maintains an extensive personalized video-recommendation system based on ratings...
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...Module 3 Case Study Analysis Netflix: Push and Pushback in Streaming Video MBA 530 Abstract Netflix is a company that dominated the DVD rental market in the past. In more recent years, Netflix has stepped up their game and entered the world of streaming unlimited TV, and movies over the internet to its consumers at home by using their TV’s, PC’s, and gaming consoles. Netflix is available to stream with over 200 devices in the United States. According to the website, Reed Hastings and fellow software executive Marc Randolph co-found Netflix in 1997 to offer online movie rentals. Each year since, they have tried to remain up-to-date with technology and tapping into new markets to stay ahead of their competition. Case Study Analysis – Netflix: Push and Pushback in Streaming Video Like most organizations in today’s business world, there are challenges that must be faced. Netflix has transformed their business model from DVD rentals to subscriptions for online streaming. In doing this, they have encountered some challenges. It’s important for the company to keep moving forward and grow their business to stay successful in today’s growing technologically dependent world. Four Major Challenges Online streaming video appeals to a young audience that is difficult to reach on traditional television owing to their light television viewership and heavy usage of technology to avoid advertising (Kelty, 2011). Because more people are using their mobile devices, gaming...
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...Duane Lefevre Netflix Case Analysis Summary To “Netflix” is fast becoming a common word in today’s society. Everyone knows it, because it is very famous for its service of online movie. It has replaced the traditional DVD rental store and all the rental process can be done through internet with a higher image quality. Reed Hastings incorporated in 1997 and starting movie rental service in 1999. In 2012, there was already over 23 million subscribers and more then 120,000 titles available for online streaming, majorly competing with Hulu Plus and Amazon prime instant video. Analysis Porter five forces analysis The Porter’s five forces model is often used to analyze companies’ level of competition within an industry and business strategy. The rivalry among existing competitors is intense. There are a large number of firms in the movie rental industry and the competition is very high. Several methods for consumers to choose from in-store rental, online rental and mail delivery or video on demand and low level of product differentiation also increase rivalry. There are low switching cost which also lead to aggressive competition and comparable product can be found at many different places. In brief, Netflix major competitors have large levels of capital and also achieved economies of scale. The threat of new potential entrants of Netflix is soberly low...
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...would you describe Netflix’s organizational culture? Explain Netflix has a performance culture. Everything about the company’s employees is based on performance. Netflix has extremely high standards for all their employees. Employees know if they do not perform well and do their job incorrectly then they will lose their job. Just like most companies; even if they are doing their best but not meeting the company standards is a means of being terminated. 2. If you were hiring people at Netflix, what questions would you ask applicants to determine if they would fit into the corporate culture? Generate three to five questions. How many years of experience do you have in working with technology and delivery? Do you naturally strive to be the best? How do you feel about being evaluated by everyone in the organization? (peers, managers, supervisors) Can you admit to mistakes? How well do you perform under pressure? What do people often criticize you about? 3. What are the specific human resource practices that Netflix is using to recruit and retain high-quality employees? Explain why they are effective in this context. One of the specific human resource practices that Netflix is using to recruit and retain high quality employees is an annual 360-degree Assessment. This means that the performance appraisals will be done by peers, subordinates, customers, and yourself. Another human resource practice that Netflix is using is flexible time management. By allowing employees...
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...organizational behavior within any organization is intriguing. Success relies on many factors that involve leadership, strategic vision and a motivated team poised for the challenges of the day to day operations of the organization. Blockbuster Video skyrocketed to the top of the movie entertainment empire. A Leader in the entertainment industry, Blockbuster Video was plagued by challenges and failures that eventually led to their ultimate demise after a short lived 25 years. This research paper will attempt to answer how the King of the video entertainment empire withered away, even after years of company acquisitions and finally merging with Dish Network. Blockbuster Video faced fierce competition in the latter part of its lifetime, namely, Netflix and Redbox, although some would say that Blockbuster was its own competition with a poorly executed strategic plan. The organization was plagued with customer dissatisfaction, a poorly directed leadership, and a lack of innovation. Towards the end of the era, desperation led Blockbuster to join forces with Enron; which eventually withered...
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...Company Analysis: Netflix 04/28/2011 Executive Summary Netflix Inc is a by mail DVD rental company and online streaming video webpage service exclusive to its paying subscribers. There are currently 2,180 full-time employees that manage a company with more than 20 million clients (mergentonline.com). Netflix is known for its innovative and sustainable business model based on unlimited service for a flat fee subscription. It distributes DVDs and controls inventory efficiently, to a point where costumers are completely satisfied with the service received (Freed). Throughout the years, Netflix has been operating by providing DVDs by mail to costumer’s households from its strategically located shipping warehouses. Additionally, Netflix started to offer online video streaming in 2008 to expand their services and appeal to a younger audience. This shows how Netflix adjusts in changes in the industry. The video rental industry was slowly loosing its appeal, in which companies like Blockbuster Inc. and others had a hard time making a profit using the usual classic video rental method at physical stores. But Netflix did not suffer from the industry losing its appeal. Netflix’s source of revenue comes from the monthly fee its millions of subscribers pay. Even when the economic environment was not at its peak the last few years, Netflix managed to sustain growth. Its unlimited service plans has kept demand buoyant, and it is one of the few movie rental companies that profits go...
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...Google, the world's most powerful brand, endeavors to purchase Netflix, the largest U.S. based online movie rental service provider. This acquisition is consistent with the Google focus on improving how people connect with information. The acquisition will address a strategic opportunity to deliver more diverse online content to the world, where the graphical and video display-ad market is estimated to grow to $200 billion (Efrati, 2012). It will also further build on the expansive Google acquisition model strategy and use of capital (Rosoff, 2012). Google enjoys proven success and market dominance in online advertising. With its graphical and video advertising successes through its YouTube platform and thousands of other sites, the company has established a significant competitive advantage in the market of display-advertising. With Netflix, Google would leverage its ad expertise to pair advertisements with video search requests and video themes/genres. This acquisition will continue the Google growth model of winning loyalty across every facet of the internet experience which translates into "overall time spent on Google services,[...]more time (for consumers to be) exposed to ads, [and] increased brand loyalty (Young, 2011). The acquisition would provide a diversified monetization model of membership/fee based service which provides strong direct customer and revenue competition to Hulu (streaming video currently offered only to users in Japan and the USA and its overseas...
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...Netflix case study CASE STUDY HOME ENTERTAINMENT Extended Diploma in Strategic Management & Leadership Units: U7 Strategic Marketing Management U12 Strategic Planning U13 Financial Principles and Techniques April 2013 CASE STUDY HOME ENTERTAINMENT Extended Diploma in Strategic Management & Leadership Units: U7 Strategic Marketing Management U12 Strategic Planning U13 Financial Principles and Techniques April 2013 Student’s Brief Scenario You are employed as a marketing consultant in the home entertainment sector. You have been asked by Netflix, Inc. to undertake a strategic audit in relation to the organisation’s: * core competencies * competitive advantage * value proposition You have also been asked to consider how Netflix, Inc. can remain competitive in the context of developments in technology, rising competition and changing consumer behaviour. Consideration should be given to the organisation’s financial position, its strategic risks and mitigating strategies to overcome these risks. Edited Extracts from Chartered Institute of Marketing (Case study: June 2011) Contents Introduction 4 Movie and TV programme licensing and distribution 5 Netflix, Inc 6 Netflix – advertising and marketing 7 Netflix’s competitors 7 Top ten movie download services 10 Data protection issues 10 The future for the industry 11 The future for Netflix 12 References 13 Home Entertainment Introduction Total...
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...What is entrepreneurship? Introduction Entrepreneurship is also known as helping to create healthy and profitable competition in the market, but what is the entrepreneurship? There is no standard answer. The purpose of this article is to defining the entrepreneurship by integrating the existing theory. At first, reviewing the origin of entrepreneurship, nothing generated without reason, critically analyzing the origin will promote to understand the meaning of entrepreneurship. Secondly, defining entrepreneurship by combine the different theory and taking examples to support definition. The origin of entrepreneurship Entrepreneurship was developed from “entrepreneur”, with the development of economic, how to operate a firm and how to do better than a chief executive officer was consider in 16th century, economists made attempt to study in depth about chief executive officer and come up with “entrepreneur”. Although at that time, this word “entrepreneur” was not existent, economists still realized this phenomenon and tried to describe it. As a factor in microeconomics, entrepreneur, was study by several scholars and until the 1723, this word was represented by Cantillon (Muljadi Paul, 2000, p.5). The economic development promote to establish a company, therefore, the word “entrepreneur” was born. Cantillon (1755) indicated that entrepreneur is a risk taker and profit taker, they try their best to make profit by grabbing the opportunity. Cantillon was a pioneer of study entrepreneur...
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...FACTORS PORTER‟S FIVE FORCES Page 3 Page 3 Page 3 NETFLIX, THE COMPANY PROBLEMS FACEBOOK BLOCKBUSTER Page 6 Page 8 Page 9 Page 10 CONCLUSION Page 11 RECOMMENDATIONS Page 12 EXHIBITS Page 14 APPENDIXES Page 18 1 INTRODUCTION Netflix entered the video rental industry in 1998, being pioneer on the online delivery channel. They were the first conceiving the digital format that was able to faster the delivery process at the same time it abolished several costs related to the physical points of sales. Being pioneers and developing technologies on which they had patents over could initially be seen as a competitive advantage. The fact of being the first ones operating under this format permitted them to come up with several services before competitors, as the streaming video, the disc rental, the original programming and the household profiles. Not only for being pioneers, but also for the valuable services offered, at accessible prices and with high variety of content, the image among consumers about Netflix was constructive. The share of mind among users was on a general perspective positive and of satisfaction relating to the services they were paying for. Netflix had a great brand awareness and in a positive sense. However, more recent happenings are changing this position. With the years competitors of the industry developed their services, competing more and more directly with Netflix. As so, over the years, in order to survive, the company...
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...With more than 13 million members, Netflix, Inc. (Nasdaq: NFLX) is the world’s largest subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. For $8.99 a month, Netflix members can instantly watch unlimited TV episodes and movies streamed to their TVs and computers and can receive unlimited DVDs delivered quickly to their homes. In February 2010 the American Customer Satisfaction Index (ASCI) named Netflix the number one ecommerce company for customer satisfaction. Netflix has been named the number one retail Web site for customer satisfaction in ten out of eleven surveys since 2005 by ForeSee Results. In December 2007 Netflix was ranked the number one online retailer by Nielsen Online. In January 2007 Netflix was named the Retail Innovator of the Year by the National Retail Federation. In the fall of 2005, Fast Company magazine named Netflix the winner of its annual Customers First Award. In December 2008, Time Magazine named the Roku Netflix ready device one of the top ten gadgets of the year. Services play an increasingly important role in the economy and in individual organizations. Services are particularly relevant in industries where competitive pressures are forcing companies to find ways to create competitive differentiation. (Davey) Marketing a service is not exactly the same as marketing physical goods. It has been called "selling the invisible" - delivering intangible services as a core "product" offering . However...
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...EXECUTIVE SUMMARY Netflix began in 1997 as a revolutionary idea by CEO Reed Hastings and software executive March Randolph. Before long, in 1999 Netflix launched its major line of business, the online subscription service, which radically changed the way consumers viewed movies and television. For a young company in an innovative and growing industry, Netflix has set itself up for a tremendous journey. The company has had much success due to its adaption of a modern business model and strength in operations management. Its continued reliance on and improvements of operation management principles is necessary to continue growing and bringing in profits. The following analysis focuses on operation management principles attributable to the online video streaming sector of Netflix, as well as its DVD-by-mail rental service. Today, Netflix streams on demand videos from nearly any web-enabled device to over 30 million members world-wide. In order to do so, Netflix utilizes all of the key elements of Operations Management. This analysis evaluates those key elements currently in place and offers areas for improvements. INTRODUCTION What makes a company successful? This broad, open-ended question is one that analysts and strategists devote their life to answering. The answer lies in a deep analysis of the operation management principles of a company. Netflix’s long, fundamental strain of standards regards operations and productivity, operations strategy, project management...
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