Netflix Case

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I need the 3rd question answered.

This is what I wrote in the 2nd question for you to be in the same page, if you see anything wrong in the second one let me know

2a.) Conduct a Value Chain Analysis and draw the Value Chain for Netflix.

Use the case information to include detailed information for each part of the primary and secondary aspects. I.e. Don’t just use the label, “Outbound logistics”, discuss how the product gets to the buyer (either direct or through a middleman/store). For Purchasing (procurement), where do they get their products? You may need to relabel parts of the primary activities to fit the case.

2a.Support Activities

Firm’s Infrastructure

Co-CEO’s are Wilmot Reed Hastings and Ted Sarandos (also chief content creator). Netflix has many officers, directors and board members like: David Hyman (legal officer), Jessica Neal (chief talent officer), Spencer Neumann (chief financial officer), Greg Peters (COO and chief product officer), Richard Barton (director), Rodolphe Belmer (director), Mathias Dopfner (director), and many more. Netflix has a decentralized management structure. The CEO Reed has a managerial style in which he prefers to let others have a saying. He wants his employees to be leaders and take initiatives. Netflix has 7,100 full time workers as of March 2020 (IBIS World). Netflix has over 139.0 million subscribers in 190 countries (IBIS World).Their headquarters are in California U.S. They have different production hubs in places like England, Spain and the U.S. Netflix Products include streaming of several movies, series, and others. They also create exclusive Netflix originals for their viewers. Their business segments are domestic streaming, international streaming, and domestic DVD.

Human Resource Management

Netflix carefully selects their employees, so the process is slow. They hire highly qualified professionals. They also look for people with rare capabilities and specific skills that will help enhance the company. Netflix values hard work and encourages every employee to be a leader. They emphasize freedom but with responsibility. In Netflix, the vacations are not tracked but need to be informed to the team. They also give both maternity and paternity leave.

Technology Development

In order to maintain quality for their customers, Netflix has to invest money in their streaming media infrastructure and an efficient user interface. Netflix has a lot of data delivered through the internet to provide high quality movies, series and others to their users. To perform this they use an open connect content delivery network. This enables them to exchange content with internet service providers and it will be stored on that network which will deliver the content. As an internet service provider, Netflix has to make sure that the internet speed delivered is of good quality. It is crucial for users, if they see a slow moving network, they might change to another streaming network. the Netflix also uses data mining which enables them to know what customers prefer to watch. This helps them know what to add and what to take out. Netflix uses marketing strategies like research and development to understand each geographical location and their customers.

Procurement

Netflix acquires their content by licensing and agreements. They need to constantly negotiate for new licensings from filmmakers, tv producers and other content creators. The acquisition of this content is the greatest expense Netflix has. In 2018, the company spent over $13 billion in licensing, patents and producing netflix originals. For 2020 that number was estimated to be $17 billion (according to Investopedia and BMO capital market forecast). Other products that Netflix has are their “Netflix Originals”. Although Netflix produces many of these films and series, some of them are licensing too. They set them out as their originals because they are exclusive for Netflix users only. When they produce their own content they have more freedom and control. Netflix is focusing more on originals because of the control they have and because in the long run is a great investment for them. They have hired important creators to step their game such as: Ryan Murphy, David Benioff, D.B. Weiss, Guillermo Del Toro, Hannah Gadsby, Jenji Kohan, Nick Kroll, and others.

3- Examine and discus the inter-dynamic aspects of the value chain.

a) How do these relate to first-order and second-order fit? (For reference, see the article “What is Strategy?)
b) Do these connect to the business-level strategy? How?
c) If a competitor copied one particular aspect of the value chain, will they replicate Netflix’s success? Why? Why not?

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