Answer To: STRATEGY AND CHANGE MANGEMENT You are required to write a 2,000-word essay for publication in a...
Soumi answered on Mar 10 2021
STRATEGY AND CHANGE MANAGEMENT
Table of Contents
Netflix 3
Introduction 3
Strategic Moves 3
Strengths 3
Weaknesses 4
Opportunities 4
Threats 4
McKinsey’s 7S Model 5
Key Performance Indicators (KPIs) 5
Amazon 6
Introduction 6
Strategic Idea 6
PESTEL Analysis 6
McKinsey’s 7S Model 7
Key Performance Indicators (KPIs) 8
Conclusion 9
References 10
Netflix
Introduction
Netflix was started in 1997 by serial entrepreneurs Reed Hastings and Marc Randolph in Scotts Valley, California. They dealt in subscription based streaming of television series and movies. In present time, Netflix has more than 160 million paid subscribers in almost every part of globe. It provides wide variety of shows in different languages (The Economic Times, 2021). It is a leading subscription provider.
Strategic Moves
Netflix always followed a strategic path to stay ahead in race. Netflix in 2007 understood the need of the hour and implemented change management system by letting customers watch content online. It removed DVDs from the market and make competitors shift their gears to a different platform. It sensed environment around it and reacted fast (The Economic Times, 2021).
It can be seen through the external analysis that the business environment audit informs a company about opportunities and threats, which can play a vital role while taking decisions related to marketing, new product development, allocation of resources (Yukl, 2012). The best way to external audit is to conduct the SWOT analysis.
Strengths
· Customers at global level: Customer base is in over 190 countries with around 167 million subscribers, which helps it to serve exclusive digital content (The Economic Times, 2021).
· Pricing: It has advantage over its competitors because of pricing. It offers service less expensive than cable service or watching movie in a hall.
· Content’s originality: It shows offers unique concept and fresh content, which gives highest quality satisfaction to viewers (Netflix, 2021).
· Award-Winning shows: No one is unaware of the popularity of shows at the global level.
· Flexibility to environment: It has adapted to the technology related to the various kinds of devices such as PCs, iPads and mobiles.
Weaknesses
· Debts- Investment of money in greater numbers to serve diversified content has added to long-term debt. This led to raise more money through iPods and external funding.
· Rigid subscription charges: Its pricing model consists of three levels- Basic, Standard and Premium, which does not allow customisation according to the need. Customers look for better flexible options regarding the same (The Economic Times, 2021).
· Copyrights: Netflix possess limited copyrights, which can lead to migration of existing customer base to other similar services.
· Over-Dependence: Even though Netflix is operation at global platform but it has over dependence on the North America market where saturation is quite near.
Opportunities
· Collaboration: Tie-ups with various telecom providers in different countries can bring bundle of new market opening to cater new clients.
· Expansion: Tapping the market of the countries where Netflix is not available will give access to unexploited markets (Netflix, 2021).
· Advertisements: Various advertising platforms such as Facebook, Google, Amazon and other similar services it can make more money by adverts. In addition, it will help to increase its visibility among audiences.
Threats
· Growing Competition: As many players such as Hulu, Amazon Prime, YouTube and Disney+ Hotstar are in the market, competition is tough. One has to sustain it by innovation only.
· International Growth: As global level is the new local, therefore, growing subscriber base internationally is a challenge (Robbins, De Cenzo and Coulter, 2016).
· Content Fragmentation: It can give rise to new age piracy. Ever competitor wants to be unique giving customers no common room to satisfy their needs.
Changes occur in the environment because it is the only constant thing in nature. Yukl (2012) stated that when the needs and requirements are shifting from one generation to the other, the entertainment needs are also changing. Earlier people use to watch programmes on cable services but with rise of technology smart phones, iPads came into use. This led to the birth of digital entertainment, which can be mobile at the same time. This transition was revolution in the industry and gave new platform to show creativity. This change was well take care by Netflix. This can be well explained by McKinsey’s 7S Model.
McKinsey’s 7S Model
1. Strategy: Netflix followed strategy, which gave it clear goal and helped it to handle competitive pressures. As defined by Robbins, De Cenzo and Coulter (2016), strategy is a technique that helps the company to cater changing customers demand, serve them accordingly and consequently, earn...