Reference no: EM133049936

Case : Netflix: Dynamic Capabilities for Global Success

The First Era: Founding and Early Days (1997-2006)

The Second Era: Online Streaming (2007-2012)

The Third Era: "Originals" and Globalization (2013-Present)

Strategic Approaches to Meeting the Challenges Facing Netflix

Abstract With over 90 million members in more than 130 countries, Netflix has proven itself to be a leader in the global Internet TV industry. This case study documents the firm's phenomenal rise from uncertain beginnings in DVD rentals to online streaming and original content. It highlights the role of dynamic capabilities in the company's global success, showing how the firm's strategy evolved over three key eras in its history. During the first era, Netflix focused on the establishment of a scalable business model in the form of DVD rentals offered to mainstream segments at a competitive price. It developed novel resources and capabilities in its second era with reliable online streaming and 'big data' algorithms that customized a variety of content to customer preferences.

Netflix has come a long way from its founding in 1997 as a small US-based online DVD rental company to the world's leading Internet TV subscription service, with over 90 million subscribers in nearly every country in the world. Central to its success were dynamic capabilities orchestrated by the executive team at Netflix. Specifically, this involved dedicating significant resources and capabilities to successfully innovate and achieve competitive success during all three eras of its existence, in the midst of rapid social and technological changes. The key challenge facing Netflix management was to evaluate whether the current strategic approach underpinning its growth was sufficient or needed modification to be successful in markets across the world, that was very different from its home market in both the production and consumption of video content. Other American behemoths of the Internet era such as Google and eBay have learned that strategies that earned them leadership in the US and European markets have needed to adapt to emerging markets such as China. To sustain its advantage worldwide, Netflix made adjustments and innovations to its business model and strategic approach through exercising dynamic capabilities that were not only valuable, rare and costly to imitate but also dynamically organized to ensure competitiveness.

Questions

1) In a table, compare the company's strategic approach in each of the 3 eras identified in the case.

2) Use the Resource-based model to identify the following IN DETAIL.

a. Resources (tangible + Intangible)

b. Capabilities (which resources did you combine to achieve the capabilities - identify at least 6)

c. From the list of capabilities, identify the company's core competencies (only 2-3) Do you think this core competency is sustainable?

3. Use Porter's 5 forces model to discuss the industry's competitiveness.

a. Conclusion: Is the industry competitive or not?

4. In your opinion, what would she be the company's corporate strategy for the next decade (2020 - 2030)?

a. How should the company proceed in terms of its business strategy in the different regions around the world?

5 references, please