Organisational Change Management: Netflix Case Study (Essay Sample)

Organisational Change Management: Netflix Case Study
Name
I9mnstitution of affiliation
Date
Organisational Change Management: Netflix Case Study
Introduction
Netflix was founded in the year 1997 by Marc Randolph as a company that was distributing DVDs on the basis of every use (Bouchard, et al., 2009). By the year 1999 the company had grown and started a new system of customer subscription for the use of the DVDs. In the year 2007 the company introduced the Instant streaming activity to meet the needs of the customers and also minimize on resources (DataStax, 2014). The streaming ability was found effective with the ability to enhance instant service delivery to customers in a manner that is cost-effective for the company. By the year 2008 the company had 9.4 million subscribers. With the Internet TV streaming ability, currently the company has over 48 million subscribers in over 40 countries of the world. The number of subscribers has grown greatly, and currently it makes an average annual revenue of about $1.5 billion net revenue (DataStax, 2014). The paper will focus on analysing the case study of Netflix using the organizational level diagnosis model, the possible change interventions and the organizational learning from Netflix.
Organisational Level Diagnosis
Input
At the organizational level analysis of the Netflix Company, we shall focus on the general environment and the industrial structure. Netflix is among the first company in the film industry that had started the trading of the movies. The company’s first initial strategy was enabling members the ability to rent movies. The fact that the company had been in the industry long before the other competitors gives it a favourable competition factor. With the continued growth and advancement in technology, the company was able to adapt to the technological changes and also come up with new strategies that could meet customer demands in a cost effective manner. In the year 1999 the company introduced the movie subscription service. In the year 2000 it launched a personalized movie recommendation service called CinemaMatch. The online streaming ability was launched in the year 2007. To increase their customer base, Netflix partnered with electronic device producers to incorporate their Netflix streaming into the devices in the year 2008. The company started diversifying and increasing their market base and in the year 2010 they opened up in Canada. In 2011, it was launched in the Caribbean and Latin America (Countreras, 2014).
With the advancement in technology new entrants came into the industry offering similar services. The fact that there are no barriers to entry of the industry made it very possible for several people to venture into the business. Some of the major competitors include the Amazon Prime, which offers a subscription fee of $99 per year, unlike Netflix whose yearly subscription fee is set at $119.88 per year. Hulu Plus $ 95.88 per year and is Ad supported with the recommendations algorithm. The suppliers of films for Netflix are the same suppliers for the other competitor companies. However, Netflix has opted for the option of keeping in touch with individual filmmakers for their film supplies. In the current world, there is increased the level of piracy in the film industry, and this is a threat not only top the Netflix company but also to other competitor companies.
Design components
Every business enterprise has its culture and beliefs that drive its operations. The culture influences the way people work and how they relate to themselves and the organization (Schein, 2004). Netflix Company values nine key behaviours and skills among their employees. Judgment is based on the ability to make informed decisions. Communication is the ability to talk with fellow staff members and clients effectively in a professional manner. The impact is seen as the ability to accomplish tasks and keeping consistency in the accomplishments. Curiosity, people, learn faster from their desire to know something. Innovation is the ability to come up with a solution that best fits a specific challenge. Courage is based on the ability to speak up your mind even when you know that you are saying is wrong. Selflessness where employees are required to seek for what is best for the company and not what is best for them. Honesty and passion are among the nine valued behaviours. Apart from these expected behaviours there are seven culture aspects of the company that include high performance, freedom and responsibility, promotions and development (Netflix, 2013).
By the year 1999 Netflix had 120 employees who all worked tirelessly to ensure the success of the company. By the year 2005 the company had 567 employees. The number of employees increased tremendously from the year 2007 after the launch of the online streaming. The number of subscribers and users increased and, therefore, required more staff to help in accomplishing the objectives of the organization. Currently, Netflix has 2190 employees of whom nine of them are senior managers (MacroAxis, 2014). This has made the company among the top companies in Australia that has managed a high number of employees. The performance of the company has been alluded to its ability to meet customers’ needs and to adapt to changes in the dynamic world. Adoption of newer technologies in reaching and distributing their products to users has been a great strategy that has contributed to the growth of the organization.
Output
Being a technological company the company expanded and its number of subscribers grew beyond the anticipated number as from the year 2007. It leads to the emergence of newer business challenges and problems that resulted in poor performance of the organization. The amount of data that was received and the amount of data to disseminate to the customers could not be managed effectively by the company. All their data was stored in one place and, therefore, a single source of error resulted in the failure of the system. Several downtimes were experienced and this lead to the need for a new strategy to achieve customer satisfaction (Mccord, 2014).
The expansion and venturing into other areas related to the film industry have also led to the growth of the company. The increased number of video games and partnering with other media related companies including TV channels are among the basic factors that have also led to increased customers. The main challenge is not increasing the number of clients but how to manage the clients in the most cost-effective and timely manner. The planners of the organization had not foreseen this problem coming. However, they resolved the issue in the right manner. They adopted a new system that enabled faster data transfer to the clients and from the clients to the company (DataStax, 2014).
Interventions
The strategic interventions are key to achieving the Netflix’s organizational objectives in a manner that fits both the internal and external environment demands. The first approach in implementing the strategic intervention is by carrying out an examination of the operating environment. The strategy entails carrying out a thorough analysis of the existing market and analyse the preferences of people. Technology is very dynamic and, therefore, its influence on the business enterprise should not be ignored at all costs especially for Netflix. Some of the major things to examine in this stage is the number of competitors and the competitors’ strategies. Completion as one of the factors that can affect the business and therefore attention should be paid. Carrying out clear market analysis, determining the number of target customers and the target market can help come up with the expected strategies that can help the business encounter competition (Khatri, et al., 2010). Such after the diagnosis the Netflix Company should come up with the beast strategies. For instance to compete favourably pricing is one of the factors that customers will look at before they make a decision to buy a product. Pricing the product at a base that comparatively reasonable with the rest of the competitors in the organization will give it a favourable competitive advantage. Compared to other competitors their price is very high than the price of a similar product by different customers. With such a systematic analysis, Netflix Company can be bale to anticipate on the number of subscribers that they shall be expecting shortly. It can both be an increase and decrease in the number of subscribers. For an increase, clear strategies should be laid down to help manage the clients and also enhance service quick delivery by implementing a highly effective database management software and increasing the number of staffs. In case of an anticipated decrease the company can look up for strategies that can help them maintain their customers. One of the strategies includes decreasing process and offering promotions (Palmer, et al., 2006).
The second approach is the integrated strategic change interventions. The top management is solely responsible for making a decision that affect the operations of the business (Hayes, 2010). They should be provided with very clear information that can help them to come up with clearly informed decisions. These decisions should depict the understanding of the film industry and the internal operation s of the company. For their achievement to be effective, they must be things that can be achievable and hence need for very realistic plans. The decisions made by the top management is to be implemented by the middle and lower level managers. Therefore, they should be included in the decision-making process.
The third approach is to employ trans-organisational initiatives. These initiatives include partnering and forming alliances with other business organizations for a competitive adv...