Netflix-Pushback in Streaming Video
Introduction
The case study spotlights the exertions of Netflix to become a key player in the rising online video streaming market. In the case, Reed Hastings, the CEO of Netflix deems that the internet video streaming would gain favor over the online DVD rentals. As such, the CEO projects that this development would decline gradually, beginning from mid-2013. The negative effect would be the decline in revenues because of clients preferring movies sent straight to the internet as opposed to online DVD rentals. As a measure of avoiding the possible future business decline, Hastings comes up with a business shifting mechanism whose aim is to make more videos available online. However, the business transformation approach adopted by the CEO faces some managerial obstacles, which require a clear-cut strategy that would mitigate them and thereby enabling the organization to execute the supposed changes. Indeed, the business transformation challenges facing Netflix closely relate to the three managerial issues namely globalization, ethics and diversity management. The essay seeks to examine the case study by analyzing the barrier to business innovation as well as determine how they relate to the generic managerial challenges, namely globalization, managing diversity, and ethics.
Major Challenges Faced By Netflix
The proposed Netflix business transformation strategy occurs within the context of four key challenges. One drawback includes signing treaties with diverse video devices producers to install the appropriate machinery that is user-friendly and easy to access by Netflix streaming services. Netflix also faces stiff competition from gigantic business entities such as Amazon.com and Google, who have already expanded their niche in the video streaming business (Wayne, 2018). Usually, the three companies have demonstrated utmost rivalry, with each seeking to dominate in the digital market, more so in airing TV shows and films. According to Sales et al. (2018), competition is not appealing given that it leads to the encroachment on the turf mostly dominated by cable-and satellite-television providers. Netflix’s involvement in developing original programming is another challenge given that it threatens to wipe out the pay-TV industry, an innovation that serves as the primary source of income for key media companies across the globe. Being not happy with this initiative, most of these media organizations have made it difficult for Netflix to access their programming, thereby dragging its innovation plans. Ultimately, most studios have increased their content prices to make it difficult for Netflix to access them. The studios’ chiefs have decided to increase the fee because they believe that the pricing system Netflix is devaluating their content, and would gradually outshine them at the market.
Challenges Difficult/ Easy For Netflix to Handle
Of the mentioned challenges, developing original programming requires considerable resources and major investments to achieve, thereby making it difficult to address. Likewise, Netflix would find it hard to address the growing competition in the video streaming market (Sales et al., 2018). Overcoming competition requires outstanding skills and expertise that could outshine those of the competitors, which the organization can readily achieve if it doubles its R&D efforts. Nonetheless, paying increased fees is one of the easiest challenges to address. Pay the increased fee could generate the increase of Netflix’s price structure, and then attract more demand for its distributions service. Netflix will also find it easier to address the challenge of deploying new technology that is user-friendly, given that it has engaged in some deals with manufacturers in this field before. Overall, mitigating these issues by Netflix could entail teamwork effort, R&D intensification, and wide consultation with various experts in this field.
Generic Managerial Confronts and How They Relate To Netflix Challenges
Netflix challenges closely relate to the generic managerial confronts namely globalization, managing diversity, and ethics. The global market is rapidly evolving due to numerous factors arising due to the globalization effect. As such, organizations such as Netflix target to globalize their operations to facilitate them to compete effectively in the world market, which is gradually reducing to a global village. According to Nelson and Quick (2017), managers strive to overcome various challenges such as the cultural difference and sensitivities intrinsic in the global marketplace. For instance, the current workforce is diverse in various aspects such as age sexual orientations, religion, social status, culture and personality among others. As such, ethics, character and personal integrity among other attributes should feature in managerial decisions and actions. A manager or leader with these attributes will convince or challenge the people to remain just and accountable when dealing with different stakeholders.
Apparently, globalization, managing diversity, and ethics relate to Netflix challenges in various ways. Just like in Netflix, technology deployment is a common incidence amongst various manufacturers across the globe, same as the glowing competition in video streaming. Likewise, the development of original programming aspect has been a challenge, which threatens to displace major media, companies in not only the United States but in the entire world. According to Nelson and Quick (2017), organizations should embrace diversity as a measure of overcoming the current challenges, which would serve as an obstacle to its innovation plan. Given the global connections associated with Netflix, there is a need for the company to respond effectively to diversity issues while upholding ethics, character and personal integrity at every managerial level.
Conversion of Netflix the Current Challenges to Opportunities
Netflix Company endeavors to overcome the issues related to technology deployment. One measure the organization has settled on includes facilitating the steaming platform to large and expanding base of devices such as Microsoft’s Xbox 360, Internet-connected TVs, Apple TV, Google TV, and iPod touch among others (Wayne, 2018). For the organization to achieve more, it should continue in this direction. The company should come to invent subscriber attraction and retention strategies to enable them to shine above their competitors. Another alternative could entail ceasing from pursuing original programming. Such a decision would enable the company to focus more on its primary operation of distributing digital media. Dealing in both events translates to multitasking, the factor that could require more time and increase expenditure. Often, the increase in expenses would lower productivity and profit, the crisis that Netflix would easily avoid.
Advice on Handling the Pushback from Entrants and Other Affected Businesses
Netflix would do well in the digital market and overcome its rivals only if it observes the following measures. First, the company should focus on its core competency, which involves the distribution of digital media to the clients through the internet. Pursuing other related business can be destructive and would cause a massive decline in all aspects. The company should also strive for its reputation as well as address the dented affiliation with its content suppliers. Finally, Netflix should focus on observing quality in all its digital products to ensure that it retains the subscriber’s trust.
References
Nelson, D. L., & Quick, J. C. (2017). ORGB5: Organizational Behavior (5th Edition). Boston, MA.: Cengage.
Sales, T. P., Guarino, N., Guizzardi, G., & Mylopoulos, J. (2018). Towards an ontology of competition. In 12th International Workshop on Value Modeling and Business Ontologies (VMBO). Retrieved from https://www.researchgate.net/profile/Tiago_Prince_Sales/publication/323127269_To wards_an_Ontology_of_Competition/links/5a81c1f145851504fb3545e5/Towards-an- Ontology-of-Competition.pdf
Wayne, M. L. (2018). Netflix, Amazon, and branded television content in subscription video on-demand portals. Media, Culture & Society, 40(5), 725-741. Retrieved from http://journals.sagepub.com/doi/abs/10.1177/0163443717736118