ORGANIZATIONAL CHANGE

NETFLIX CASE STUDY

Casey Yakabuski, Alyssa Navo, Mankirat Bassi
 1. What environmental factors are driving change at Netflix?

Technological developments: Netflix has embraced technology to improve its streaming

capabilities and to make its consumers' access to its content faster and easier. For example, the
business has scaled up operations by investing in cloud computing infrastructure and
implementing new encoding techniques to increase video quality. The company has also
explored ways to make their shows more interactive, with select programs allowing the viewer to
choose the direction that a program goes. To allow their subscribers to view their favorite shows
on the go, they have added a feature for temporary downloads, therefore making access to shows
more efficent when there isn’t a connection to wifi or data.

Competition: Netflix is constantly coming up with new ideas and improving its offers as a result
of the escalating competition in the streaming market. Netflix has also given big budgets to
create and distribute original movies and shows catered to each of the countries they stream to.
For example, Netflix has been spending money on creating original content to set itself apart
from rivals like Disney+.

Consumer preferences: As preferences change, Netflix is modifying its services to meet the
needs of their consumers. The user interface of Netflix is easy to use and allows subscribers to
make their own list of what they want to watch, and rate their enjoyment which allows Netflix to
recommend other shows or movies that are similar. As a result, the business has increased the
variety of content genres it offers, such as reality TV and documentary programs.

Regulations: In Canada, Netflix has to follow The Broadcasting Act, however with the passing
of Bill C-11, modifications to the law may have an effect on how Netflix operates. Regardless of
the location of the business, the company must comply with local content control norms and
adjust to changes in privacy and data protection legislation as necessary.

Global expansion: As Netflix navigates various cultural, governmental, and technological

situations, the corporation is undergoing transformation as a result of its global development.
Accordingly, Netflix has both localized its user interface and content selection to better serve its
clients in different locales. The company has been able to achieve this goal by promoting
diversity within the company, by employing a wide range of employees who all come from
different ethnicities and backgrounds and are able to understand what the customers are looking
for in the company.
 2. What are the internal drivers of change at Netflix?

Innovation: Netflix is always looking for fresh, cutting-edge approaches to improve their
customer experiences and beat out the competition. They continually partner with different
talents such as directors, producers, actors and actresses, influencers, and even authors, to
promote and create programs that subscribers, old and new, would be interested in. In this
context, the company's decision to switch from DVD rental to streaming services was a
significant innovation that was responsible for uprooting the entertainment sector when it was
implemented.

Company Culture: Netflix's distinctive workplace environment promotes innovation and an

openness to change within its company culture. The company promotes the concept of freedom
and responsibility within employees, allowing them to take charge to experiment and utilize their
voices to express their ideas without hesitation. They believe that not making a contribution to a
discussion is an offense to Netflix’s company culture.

Making decisions based on data: Netflix uses data to guide change and make judgments. The
business, for instance, utilizes data to decide what original material to create, what licensing
agreements to get into, and how to improve its user experience.

Flexibility: Netflix is incredibly flexible and may quickly change course in reaction to market or
technology developments. Movies and shows are regularly added, and new content is regularly
teased and released. For example, the business' performance has been greatly influenced by its
capacity to quickly adjust to the emergence of mobile devices.

Focus on the Customer: Netflix is committed to providing customers with a great experience
and is always seeking for ways to do so. Netflix’s social media presence also allows them to
interact with fans of shows and movies that are available. Most countries have their own
“Netflix” accounts that are more catered to what is available in each country, especially local
programs that are available on the site. The organization, for example, is continually improving
its recommendation algorithm to better match customers with material they would enjoy.

3. Netflix faces strong competition from other organizations in

its sector. What is your assessment of Netflix's approach to
beating the competition?
Netflix approaches competition with other companies in the entertainment sector in a distinctive
way. The business was a pioneer in popularizing the now-standard industry practice of video
streaming. In order to differentiate itself from the competition and keep its position as the market
leader in the video streaming sector, Netflix has placed a strong emphasis on producing original
material of the highest caliber, like Stranger Things and The Crown.

The way that Netflix uses data and technology to compete is a crucial component as well. The
company uses data research to identify the kinds of episodes and movies that are most likely to
be well-liked by its members as part of its data-driven approach to content creation. As a result,
Netflix is able to concentrate its efforts on creating content that is likely to be popular, which
helps the business to remain competitive.

With Netflix producing exclusive and original content as well, it pushes subscribers to stay and
tune in to the shows and movies that are only found on Netflix.

4. To what extent is the organization culture at Netflix key to its

competitive advantage? Given the nature of the competition, what
changes to Netflix's culture would be advisable?
The competitive advantage of Netflix is significantly influenced by its organizational
culture. Netflix has a distinctive culture that is centered on innovation, taking
calculated risks, and having a strong customer-focused mindset. The company's ability
to be nimble and react fast to shifting market conditions is made possible by this
culture, which is crucial in the quickly changing entertainment sector. Another aspect
of Netflix's culture that contributes to its highly engaged and effective workforce is its
emphasis on trust, transparency, and outcomes.

But given the nature of the opposition, it could be wise for Netflix to alter its corporate
culture. The number of new entrants, many of which are larger and more established
organizations, is growing as the video streaming market continues to expand and
change. Netflix may need to take a more calculated and risk-averse approach in order
to sustain its competitive advantage while retaining its distinctive culture.

One potential shift for Netflix would be to place more of an emphasis on establishing
alliances and partnerships with other businesses in the entertainment sector. Netflix
could access new content and technologies, as well as reach new audiences, by
collaborating with other players. This would help the business keep its position as the
market leader. Additionally, this might aid in reducing some of the dangers connected
to market disruption and rapid expansion.