Netflix Strategic Decision

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NETFLIX STRATEGIC DECISION 2

Netflix Strategic Decision

It is the goal desire of all investors not to run at a loss by the end of each of the financial

period and in order to do so, proper strategies and planning that enhances the decision making

process are put in place. The greatest fear of major and majority of the investors is failure and to

be specific failure to make profits (Canzer, 2016).

To overcome the fear of failure, to develop some degree of confidence in the growth and

progress of the business entity, combinations of various strategic forces are brought forth and

upon deliberations on them, the most suitable one is considered. Upon consultations, the

company’s mission, value statement and vision that are in line with the required goals and

objectives are reached at.

Competitors’ position in the market are analyzed and proper strategies to counter them

are proposed and agreed on with an attempt to protect the company from being phased out of the

market by its competitors. The need and desire for growth and progress of the company drives

the investors into SWOT – Strength, Weakness, Opportunity and Threat analysis of the

company. This paper therefore seeks to analyze factors that contribute to either failure or success

of business strategies and performing the Netflix Company’s SWOT analysis with a clear

intention of evaluating and knowing the SWOT’s effects on the corporation’s strategic planning

(Belew & Elad, 2017)

What Contributes to either Failure or Success of the Business Strategy?

Strategies are the scope of every company in both short and long term planning.

Strategies give the company the direction to follow and point the way towards achieving the

company’s objectives and goals. Methods and explanations on how the company wills attain its

goals and objectives are both wrapped in the company’s strategies.

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Strategies may either fail or succeed but that will solely depend on the organizational

policy implementations. In order to avoid the collapse of the business or company, one has to

man himself with the skills of implementing the company’s policies. The most essential

components of policy implementations are the company’s value statement, mission and vision.

To add on top, discipline of oneself and determination to execute the strategy (Canzer, 2106).

Importance of the formation of Values Statement, Mission and Vision in Company’s

Strategy.

The values, mission and vision of any company, organization or institution, usually

speaks volume about their objectives. Vision can either as the long or short term dream about the

future of an organization. Vision therefore stipulates the desires of the company in the future as

far as achievement of its objectives and goals are concerned.

When the vision is clear, achievable, measurable and realistic then it calls for the

commitments of employees and sooner or later, they achieve it. Without a vision, companies

stumble and phased out. To move into the correct direction and higher position, the company

must have a vision (Clark, 2016).

It is also through vision that company’s strategy becomes visible and achievable. Good or

proper visions are always consistent, clear, descriptive, creative, realistic, ambitious and

inspirational. Where the implementations of the company’s vision are poor, the business fails

and when the company’s vision is actualized then the business entity or organization succeeds

both in strategy and prowess.

The companies’ mission gives them the reason to exist and its plans to better the

provision of stakeholders’ services. Mission of the company explains the process of

accomplishing the company’s vision thus separating it from its competitors. Mission statements

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provide a platform for creating and building a relationship between the stakeholders, suppliers,

customers and employees (Clark, 2016). Mission is always considered to be inclusive, outcome

oriented and concise. The future of the company is determined by the clarity of its mission.

Mission forms the foundation of the decision making process. Business strategy will definitely

fail when the company’s mission isn’t clear.

The principles and values of an organization help in desired character and behavior

development within the company. Characters and behaviors are the forces behind delivering

services to clients or customers of the company. Customers’ interest comes first in every

business deal thus values will enable the company to deliver their services in accordance with the

clients demand (Belew & Elad, 2017).

Quality service, honesty, teamwork, accountability and transparency enhance

understanding thus improving techniques of meeting the customers’ demands. Principles and

values are vital when it comes to achieving the company’s goal. They are the propellers that gear

the company’s vision and mission. For competitive service delivery, employees must adhere to

the company’s values and principles. This in-turn will be the centre of attraction for customers.

Values cannot be assigned an optional tag for a company to achieve its desired goals and

objectives.

To maintain the high value standards, effective and efficient service delivery will uphold

thus aid in meeting the mission which in turn helps in achieving the company’s vision. When the

company’s ethics are disobeyed, immorality creeps and roots in the company and this definitely

gives birth to acts such as corruption, trust issues emerges from customers and low self-esteem

issues emerges among the employees. This leads to imminent losses, failure and the company

may then dies a natural death without remedy.

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In summary, value statement, vision and mission are important drivers for success in any

business strategy. For example, creation of inconsistent, unclear and non-realistic vision will lead

to strains of the company’s resources thus leading to failure of the company’s strategy as well as

improper implementations of the company’s mission (Betz, 2016).

When there are combinations of proper principles and values like professionalism,

teamwork, transparency and accountability, the company is thus promoted to meeting its mission

hence leading to automatically goal and vision achievements. When these three tools are

carefully studied and understood, the company is set to succeed. Achieving the business strategy

is pegged on setting both long term and short term missions. When business operations are fixed

on its vision then it’s also set to thrive and blossom faster.

Leadership Team and its Importance in the Business Strategy

The effective implementation of the company’s strategy requires its leadership to be in its

correct place so as to help the company in meeting its goals and objectives. All the employees of

a company, irrespective of the position one is holding, plays a vital role during the strategic

implementation process (Davis, 2017).

Senior employees become role models to junior employees thus when it comes to

influencing the junior employees to accomplish tasks and meet deadlines, senior employees are

key factors to be incorporated in the equation. Everybody within the company’s enterprise is a

champion of the company’s strategy.

When the attitude of employees towards the company’s strategy is positive then

achieving it becomes so easy and the reverse is true. A sign that the company will achieve its

strategy is when all the employees are walking the talk of the strategy. It’s therefore a solemn

role of the senior employees to motivate and help the junior executives grow. Motivating the

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junior executives can take the form of empowering, inspiring and even teaching them new skills.

It therefore becomes so very easy to implement the business strategy when everybody is having

the desired skills for its achievements (Davis, 2017).

The company executives should also involve junior executives or other employees in the

process of decision making for this will help to reduce resistance that might crop among the

employees. Another known weapon that indeed can help in spearheading the smooth adoption of

a business strategy is the leadership buy-in. When employees are required to be champions for

change within an organization then they must be informed of the changes for by so doing they

become better company ambassadors. Another thing is with the issue of goals and values which

should also be regularly communicated, this will promote accountability and transparency within

the organization.

Leaders should also be responsible for failure or success of the implementation of the

company’s strategy. Encouraging all leaders to effectively participate in the business strategy

implementation is in order. History has it that when some leaders form a parallel group or

resistance then they act as stumbling block and bumps during the implementation process thus

ineffective business strategy implementation hence failure.

To conclude because concluding I must, the success of any business strategic

implementation stems from leadership buy-in policy. Its main importance is pooling all the

employees together, to work as a team with a common goal, obligation and duty.

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Performing a situational analysis analytical tools

It’s not a sin but rather a necessity for the company, organization or an institution to fully

understand both its internal and external environment. This enables the company to realize its

competitors, customers, business environment and potential. PESTEL, Porter’s five and SWOT

among others are the key situational analysis. These analytical tools are the known remedy for

coming up with a strategy in an organization since they will help to assess the competition level

in both local and international markets.

SWOT Analysis

SWOT is just an abbreviation that stands for:-

S – Strengths

W – Weaknesses

O – Opportunities

T – Threats that pauses challenges to the affectivity of the business. SWOT helps in

better understanding of both the external and internal Netflix company environment. It helps in

faster achievement of the company’s goal or objective.

Weaknesses and strengths are deduced from within the company, they are those factors

that hinder effective and smooth business operation. Strengths tend to explain elaborately what

the company is good in compared to its competitors. Strengths also include the identification of

undiscovered or unique selling points as well as identifying and taking the advantages of the

competitors’ weakness.

When the company’s strengths have been identified, Netflix Inc will then be able to

formulate policies that will beat its competitors. Netflix Inc has a comparative advantage that

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stems from its reputation of customer base, capital base and branding. These are Netflix Inc

strengths that they capitalize on and make unbeatable profits.

Weaknesses analysis revolves around poor performance areas. In the case of the Netflix

Inc, it’s reported to be in the departments of execution of the strategic implementation plans that

perform below average, insufficient capital and occasionally poor or low quality of goods and

services. Weakness majorly causes the backward development of the company.

Opportunities refer to technological, socio-cultural, and economical and the political

changes that favors the growth and development of the business. Opportunities examine current

market forces and gaps that Netflix Inc should take advantage of so as to realize its smooth

development. This is also where new innovations are analyzed, innovations that Netflix should

bring into the current market but not those that are already operational and run by other

companies.

Lastly, threats faced by the business. Every business entity is entitled to some degree

threats because they are exposed to the world where technology, socio-cultural and economical

factors as well as political factors pauses threats each and every day. Netflix Inc is not an

exceptional when it comes to threats. Just like any other business with an exemption of the

Kenya Power and Lightning Company in Kenya (KPLC), Netflix Inc has competitors that are

trying to phase it out of the market. Competitors are doing things that impacts Netflix Inc

negatively thus delaying some of its strategic implementations. Fully understanding of the threats

paused, enables the company to adjust and overcome.

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PESTEL Analysis

PESTEL is also just an abbreviation that stands for the analysis of:-

P –Political

E – Economic

S – Socio-cultural

T – Technology

E – Environmental and

L – Legal factors that affects the smooth operation of the company. PESTEL analysis

basically is considered incomplete when some of the external macro-environmental factors are

not fully examined.

A government policy is just but one political factor that influence and have an impact on

the operation of the business. Such policies may include but not limited to employment laws, tax

policy, political stability and even the international trade policies. The structure of the

government also has an impact on the operations of businesses (Dine, 2016).

Economic factors include exchange rates, economic growth, unemployment, inflation and

interest rate. They affect business performance in a given country. Assessing and fully

examining these factors helps in formulating policies that will work best towards the betterment

of business development. (Hill & Hult, 2017).

Factors that have an immense effect on the consumers’ needs are the socio-cultural

factors. They also affect the company’s market size. These factors includes age-demographics,

education level, people’s culture, religion, career attitude, health consciousness, people’s

lifestyle and the general population growth among others. Socio-cultural factors have an

influencing factor on the spending habit of the population, their buying habit. When these factors

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are properly analyzed, the company will be able to identify some of the goods and services that

are highly in demand by the consumers thus high sales will be realized.

The technological developments, automation, technological change, research and

development are some of the technological factors with influence on the decisions made by the

company. Efficient analysis of technology is important as it impacts the production unit and it’s

also capable of influencing the quality of services and goods produced by the company.

Climate change, environmental pollution and environmental regulations are some of the

environmental factors that are analyzed so as to enable the company’s stakeholders to make

decisions and policies that ensure the swift operation of the business. It’s important to know how

slowly or fast the environment can affect the business operation.

Business operations are also affected by the legal factors such as competitive law,

employment law, consumer law, environmental law and discrimination law. These factors have

an influence on the strategic operational planning of the company and lawful atmosphere of

competition. It is therefore advised to fully examine the legal framework of a country that the

company intends to invest in (Hill & Hult, 2017).

Porter’s Five Forces

The main reason why Michael E. Porter developed this kind of business model is to help

in evaluating the ability of the company to compete fairly and squarely. It’s a theory though but

with strong affirmative roots that are deeply grounded on the five forces that determines the

competition level of a business in the market.

These five forces also help in determining the profits that a new product or service in the

market can or is likely to generate. It also points out the weaknesses and strengths to be

improved on and capitalized on respectively. These forces includes the bargaining power of both

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the buyers and suppliers, threats paused by new entries, threats by substitute services or products

and lastly existence of rivalry among firms or companies.

The bargaining powers of the suppliers solely depend with the suppliers of a particular

company to raise or lower prices of raw materials. It becomes extremely easy to manage the

business when the company is capable of ascertaining the costs incurred from switching from

one supplier to the other, number of suppliers, and the uniqueness of the inputs since deviation in

input price causes a deviation in the profit margin (Johnson, Whittington, & Scholes, 2011).

Any company can only exist in the competitive market when threats of substitute of

services and products are analyzed and carefully examined. When substitute commodities are

identified in the market then it means that their level of satisfying the consumers’ needs should

be examined. Their presences in the market have an effect in implementation of the company’s

strategic planning. The company must therefore come up with new strategies to curb the

incumbent threat paused by the product substitute. Lowering of the product’s prices and

improving product quality are some of the strategies that help the company to beat its

competitors and achieve its strategy (KROGERUS, 2018).

New entrants into the market are another threat that is experienced by almost all business

entities. It therefore needs to be successfully evaluated. The most common factor that attracts so

many companies into a particular market is the high profits fetched from that market. When so

many companies entre the market then the market shares are reduced. So, not unless this factor is

examined, the company may not actually come up with strategic planning to bar other companies

from entering the market. The most commonly known ones are product differentiation, patents,

and economies of scale among others. When strong barriers are created, they become

impenetrable by other companies to access the market.

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Competition among the rivalry firms also is a bigger issue that requires keen analysis.

The strengths and weaknesses of the competitors should be analyzed and be made known for this

will help the company to channel and prioritize their strategies well. Identifying the real

competitors in the market enables the company to make the necessary adjustments thus

becoming more competitive.

The buyers’ bargaining power is just impossible to ignore. Customers can demand for

qualities of a particular product to be improved and can also bargain on the prices of

commodities. This will definitely lead to decrease in profits or just losses. In the strategy agenda,

company must incorporate standardization of prices for the commodities as well as expanding

their clientele or customer base. These five strategies when coupled with some other policies will

ensure longevity of companies in the market (Ball, 2013).

SWOT Analysis for Netflix Corporate Company

Netflix Inc is ranked as one of the best providers of entertainment services via the

internet. Netflix Inc is known of its provision of television documentaries, streaming movies and

internet subscription. All its services are provided via the internet. Customers also benefits from

the DVDs sent to them via mails. It enables customers to watch their favorite documentaries, TV

shows and movies from the comfort of their zones. Netflix Inc is operational in over 150

countries across the globe with an increasing customer’s base that includes both female and

males from all age groups.

Netflix Inc is an internationally recognized company for its online services in the

entertainment industry. Most clients have chosen to do business with them because of their brand

and exemplary services to customers. Their services have equally attracted so many customers

because of their fair prices pegged on their product packages. Watching from the comfort of the

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customers’ zone is another reason why so many have chosen to buy from them. These are the

major strengths that have kept Netflix Inc Company in the market cycle and has enables them to

continually expand their customers’ base. Their increased customers base have given them the

bargaining power and incase of new products, Netflix Inc can sell them and made it known to so

fast to the majority of the world’s population. The company is also trusted for providing the

original contents hence the best to do the business with thus high annual yields.

Just like any other company, Netflix is not an exemption; it has weaknesses too that

includes low power in pricing. It is the studio that usually determines the prices of movies

especially when there is a new movie that should be made available to the public. Netflix

therefore sits on the acceptance bar where it has to agree with the price set by the studio. Netflix

also suffers from non-exclusive terms of the movie contents.

Competitors of Netflix are allowed to access and probably even distribute the same

movies, documentaries, TV shows among others. This enables the competitors to plan to

outshine them in the industry. Licensing is way too expensive than even the content streaming

cost. The company is thus put in a very risky path and fights so hard to survive from collapsing

(KROGERUS, 2018).

Netflix also has been phased by strong opposition in attempting to raise fees for

subscription even though it is experiencing high costs of production. Customers always

threatened to unsubscribe and change to major competitors of Netflix such as Face book,

YouTube and Amazon every time it tries to raise the subscription fee. Netflix have therefore

resorted to maintaining the subscription fee for streaming the original contents irrespective of the

losses incurred.

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Through research, Netflix Inc Company is taking advantages of the new invention to

maximize its sales and acquire new business opportunities. They have even created departments

that major only in research and development. Because of this, Netflix has grown overtime to

become of the very most first site for reference when one wants to watch a documentary, TV

show and general movies. This has been of immense advantage to the company since they

become one of the major companies that can help in advertising new commodities and there is a

high degree of surety of the commodity made known to so many people. This is even an

additional advantage to the company since it advertises itself thus creating awareness in the

market (Rosplock, 2017).

Netflix is faced by the threat of competition from companies like HBO, You tube, Hulu,

Google, Face book and Amazon. These companies pauses a very stiff but healthy competition in

the entertainment industry via online portals hence slowly reducing the Netflix market notch.

Online streaming services have been greatly affected by technological changes thus for Netflix to

remain on top, huge expenses must be incurred in updating constantly its technology. Black

market that has taken the downloading form is equally a big threat to the company. Computer

gurus are on the verge of coming up with other ways of downloading movies, streaming TV

shows and watching documentaries for free.

Effects of Netflix Company SWOT analysis on its Strategic Decisions.

SWOT analysis has really been of importance to the company as far as decision making

and strategic plan implementation is concerned. Realizations of threats, opportunities,

weaknesses and strengths of the company enable the stakeholders to identify areas to capitalize

on and those to avoid so as achieving its objectives and goals. Branding is one advantage that

Netflix in enjoying, it’s using its branding to garner profit from the market. The company’s main

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agenda should now be to focus on continual developing of its brand. This will enable them not to

be easily phased out of the market over time. Just like they have been enabling the streaming of

original contents, they should also improvise the quality of services for this will attract more

customers. Their way of charging standardized prices attracts clients across the globe

irrespective of one’s social status (Hill & Hult, 2017).

However, if they can invest more on strategies that is geared towards the standardizations

of prices then more permanent customers will be attracted. This can be in the form of allowing

people to use their services on a loan basis. Large customer base of the Netflix Inc Company is

the source of its high sales turnover. The company should also advance in its marketing strategic

planning; this will also fetch clients that will never look back. Majoring on the original contents

in the long run should also be strategized (De, 2017).

There are several weaknesses that are facing Netflix Inc Company, these calls for

advancing or changing the strategies. In the case where the studios are dictating the market

prices, Netflix Inc Company should come up with a strong policy that will help them to

strategize and standardize their prices. Since their services are not wrapped in an all inclusive

terms and conditions, they must come up with policies that will enable them to only get into

business with studios that will give them better terms of doing business. This will prevent their

competitors from accessing same services that they also provide to their customers.

Netflix Company pays more on licensing, this should be minimized and therefore a

strategy should be in place to cub this even if it’s just through agreements. Strategizing on

customer base increment will definitely result in the reduction of powers that are being enjoyed b

bargaining customers (De, 2017).

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Threats and weaknesses of Netflix can be averted by the numerous opportunities that

keep on knocking at their doors for example, the world is going digital and this is a big

opportunity for the company to diversify their service provision to customers who awaits the

diversification. Their strategies should therefore revolve around promotion of service increment.

Some strategies should now be implemented like exploring and venturing in other countries.

After close analysis of the threats that includes the stiff competition, threats by new

entries among others, Netflix should now come with policies and strategies that will enable it to

capitalize on its weakness more than its competitors so as to outface them from the market. This

can eventually lead to monopolizing the market thus huge returns (Betz, 2016).

These policies should just be in place so as to capture the market. Less expensive

technological changes should form core of the research and development team of Netflix Inc

Company since t a lot of cost has been incurred or either upgrading or creating new technologies.

Still on the issue of technology, adoption of high performing machines should be implemented to

help in the swift adoption of technological change.

The black market is also threatening the daily operations of the Netflix Inc Company and

therefore a laid down strategy should be in place to help curb the pirates like protection codes of

the movies aired. Lastly, the biggest threat is loss of customers for without customers any

business venture is nothing thus strategic decisions should be made in honor of maintaining

customers even if prices are increased. This can be achieved by improving the quality of services

rendered to clients or subscribers (Rosplock, 2017).

In conclusion because concluding must be done, strategic decision needs to be

implemented in any business organization. Collapsing of most companies stems from poor

strategic planning. It is also advisable to frequently analyze businesses for the clear path where

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the business is heading. For any business organization to achieve its desired goals the realistic

policies should be put in place (Ball, 2013).

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References

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McGraw-Hill/Irwin.

Belew, S., & Elad, J. (2017). Starting an Online Business All-In-One for Dummies. Somerset:

John Wiley & Sons, Incorporated.

Betz, F. (2016). Strategic thinking: A comprehensive guide. United Kingdom: Emerald.

Burrow, J., Kleindl, B. A., & Becraft, M. B. (2017). Business management.

Canzer, B. (2016). E-business: Strategic thinking and practice. Boston: Houghton Mifflin.

Clark, P. (2016). Business management.

Davis, C. J. (2017). Servant Leadership and Followership: Examining the Impact on Workplace

Behavior. Cham: Springer International Publishing.

De, K. C. (2017). Strategic thinking: An executive perspective. Upper Saddle River, NJ: Prentice

Hall.

Dine, J. (2016). Suing the Company, Suing for the Company, Enforcing Director’s Duties.

Company Law.

Hill, C. W., & Hult, G. T. (2017). International business: Competing in the global marketplace.

Johnson, G., Whittington, R., & Scholes, K. (2011). Exploring corporate strategy: [text and

cases]. Harlow: Financial Times Prentice Hall.

KROGERUS, M. I. (2018). DECISION BOOK: Fifty models for strategic thinking. S.l.: W W

NORTON.

Rosplock, K. (2017). The complete direct investing handbook: A guide for family offices,

qualified purchasers, and accredited investors.

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