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Operations Management of Netflix

In: Business and Management

Submitted By Sophie1234
Words 4276
Pages 18
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, forecasting, quality, statistical process control, capacity planning, location and layout strategy, and inventory management. Netflix operates in the entertainment services industry, most specifically, the online streaming service industry. The highly competitive industry with low switching costs places importance on effective and efficient operation management principles. Because of the...

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