Campbellsville University Netflix Organizational Analysis

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Business Finance

Campbellsville University

Description

Each student will write an 8-10-page paper on an organization of his or her choice. The submission must be typed, double-spaced, and have uniform 1-inch margins in 12-point Times New Roman font. The organizational analysis will contain the following sections:

  • Introduction of the organization, including history and background.
  • Organizational strategy.
  • Organizational design and your assessment of effectiveness.
  • Organizational culture.
  • Conclusion and what you would change about the selected organization for improvement.

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Explanation & Answer

Attached.

Running head: ORGANIZATIONAL ANALYSIS

Organizational Analysis
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Institution Affiliation
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ORGANIZATIONAL ANALYSIS

Overview
Founded in 1977, Netflix, Inc. is an American based company that provides media and
production services. The company's main offices are located in Los Gatos, California. Primarily,
Netflix focuses on subscription-based streaming services. These services provide online
streaming of a library of movies as well as TV programs. As noted by Kim and Shin (2017),
Netflix operates through three segments. They include Domestic DVD, International Streaming,
and domestic streaming. It is reported that as of April 2019, the company had about 148 million
paid subscribers across the world. In the United States, the number of paid subscriptions stood at
about 60 million. Netflix services are available all over the world, with the exception of some
countries in Asia and Europe-- Crimes, North Korea, Syria, and mainland China. Netflix also has
offices in Brazil, India, Japan, South Korea, and the Netherlands.
Netflix has been doing substantially well in the market over the past two years. However,
in 2019, the company's growth in various aspects has decreased. Despite the company's
popularity globally, Netflix (NFLX) Financial Summary (n.d.) reports that the U.S. serves as
Netflix's most important market, with 87% of total OTT video service users as of August 2019.
As of December 2018, around 60% of United States-based adults had a current paid subscription.
In the same period, approximately 77% of all VoD users were active Netflix subscribers (S., A,
2019). Another aspect that makes Netflix have the edge over the competition is its massive
wealth.
According to the company's financial statistics, Netflix's net worth is $155.53 billion (S.,
A, 2019). This is as of June 06, 2019. As of September, the same year, the company's market
capital was reported to be 117.37 billion dollars. Its revenue breakdown for the year 2018 stood

ORGANIZATIONAL ANALYSIS

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at 15.794 billion dollars. This amount was much more than what was reported in the previous
year. With 16.6 billion dollars estimated annual revenue, it is an indication that its global
reception is highly positive. According to a report by Yahoo Finance, Netflix's quarterly growth
rate is 26%, which is predicted to increase over the years (S., A, 2019). Its gross profit for the
2018-2019 financial year is reported to be 5.83 Billion dollars, which is way higher from the one
published in the previous financial year.
Organizational strategies
Corporate Level Strategies
The management of Netflix is committed to having the company remain relevant in the
market for eternity. In this regard, the management has come up with a steady process for
engaging investors in trusting them with their finances. One way is through the effective
allocation of resources and entering into partnerships. Partnerships with Warner Bros and
Nintendo help it to boost its revenues. The tangible rentals of DVDs and Blu-ray discs, as well as
the online streaming service, earn the company the most revenues. The success of online
streaming depends on the success of the DVD rental feature. With the increased popularity of On
Demand and online streaming, the CEO is confident that online streaming will become a massive
asset to the company.
Business Level Strategies
According to Kim and Shin (2017), Netflix's business model is a blend of different
business strategies, which include generic strategies, competitive strategies, and innovative
strategies.

ORGANIZATIONAL ANALYSIS

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Generic Strategies
The first generic strategy employed by Netflix is the cost leadership strategy. The aim of
this strategy is to help the company to be the leader regarding cost in the market it operates. In
simple terms, Netflix has strived over the years to ensure that it gives its customers the best
quality services at the lowest cost. There are some ways that Netflix has used to achieve the cost
leadership strategy. One way is by way of increasing profits by reducing cost and ensuring that
the product and service prices are falling under the average market prices. Secondly,...


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