Netflix has over 81 million viewers worldwide. It has the most viewership hence the leading internet broadcaster. It airs various productions including documentaries and series ("About Netflix"). The company, which is now flourishing in the internet and catalog retail industry, was started as a DVD mail service company by Reeds Hastings and Marc Randolph ("About Netflix").
Being mainly situated in the USA, as of May 2015, the company, as by the information from Forbes, has 2450 employees, and a net worth of 25.5 billion dollars (Netflix) as of 2007. With the use of the internet, Netflix provides both TV episodes and streaming movies over the Internet while still upholding its original role of distributing DVDs via mail (Forbes). Various segments of operations such as domestic streaming are used to run the company’s business. Content material is obtained from studios and various providers.
Netflix is well known not only for its economic success but also for the benefits that the company’s employees reap par year to its many rival companies. Its human resource policies have raised the brows of many worldwide. An example is its loose expenses policy, or the Unlimited Vacations Days' policy, which provides limitless vacation for the employees and paid parental leave. This policy is an implementation of one of Netflix’s human resource goals that states: “Our model is to increase employee freedom as we grow, rather than limit it to continue to attract and nourish innovative people, so we have a better chance of sustained success” (Netflix TPD, 2014).
However, this policy brings out a given idea on the nature of Netflix’s expectations on high performance. Here, the idea is that an employee cannot get promotions or salary raises just by being ever present in the office or working overtime. This means that the company does not put any attention into how hard the people in it have worked, so long as their tasks have been fulfilled. With careful assessment at the Netflix workplace, one can see that there are people who do a lot of work for the company but have adequate performance in their records. This proves to be a setback as they end up moving on while there are those who do not do much of the work but at the end of the day, they are rewarded with praise and raises together with job promotions (McDuling). This should not be the case and should be looked into that all the employees in every department be accounted for their struggle and the hustle they put into their jobs. The reason for this is that the above is a show of ignorance and negligence to the heart and soul poured into the ultimate goals, both for the company and for the individuals themselves.
Moreover, it mainly delves into the rational and logical thinking rather than the more preferable instinctive management thinking, hence the nudge management theory (Business Balls). For instance, it creates a form of philosophy and attitude within the workplace as many will believe that only those high up will reap all the benefits that they down below have sowed and toiled for and create resentment in the workplace. What’s more, it creates a sense of lack of job insurance as many workers who do not get their full work’s pay feel that the company will one day, whether today, tomorrow or even a week later, will eventually get fired. This is mainly because of the company’s human resource behavior of only employing the A grade players and with that, losing to a more qualified protégé seems imminent in the workplace.
In addition the company not only needs changes in the department, but also an overall change in many of its activities. This can clearly be seen by use of diagnostic tools that show not only the company’s progress, but also its readiness for changes as of current statistics. Here, one can use two tools that can be of great help in the analysis of the company, and these are the PEST and the SWOT analyses. The reason for these two is that they give the full overview and summary of all aspects of the company, pointing out its achievements in every sector, the world’s point of view of its journey, and also analyses the room for improvement for its failures and unachieved goals. In this essay, we shall deal with the SWOT analysis, which tackles both the weaknesses and the strengths of Netflix.
For starters are its strengths. The company, being rich in experience and information about its industry has flourished, with sales of 5.5 billion as by a survey by Forbes as of May 2015 (Forbes). It has made remarkable launches in Europe, especially Spain and Italy through the end of 2015, and Korea, Taiwan and Singapore also in the start of 2016. With statistics showing a count of losses peaking with the course of the year, its material profits are expected to rise in the start of 2017 (Haggiag).
Next are the weaknesses. Here it is evident to say that its international business are not yet ready to bring profits, despite the expansions in their company’s borders. For instance, in 2013 alone, they lost 274 million internationally and in the course of 2015, there was a loss of 81 million dollars with an estimation of 95 million lost in the end of the year (Haggiag). What’s more, the very expansions have shown to be of great risk as there is the introduction of a new value-added tax as of January 2016 under the European law (Haggiag). The company is evidently looking into long term performance over short term profit making.
However, despite all this, there are opportunities for the company to grow economically and globally. The main opportunity pertaining to this is through its bids for expansion. Proof of this can be seen in the launch to Canada in 2010, its subsequent growth in Europe and Africa ( through South Africa). As of now, its present in 50 countries and their analysts are working to make the number move into the 200s in 2017.
What’s more, Netflix has made breakthroughs in producing movies, and with its bid to continue making achievements in the Original Content business, the company will make great breakthroughs in the entertainment industry, producing TV shows and movies as well. Being able to make entertainment and also the medium people watch it through is a combination what is destined to make this company thrive into new heights
Finally in the analysis are the threats. With technology changing and getting updated, Netflix faces a huge threat not only in keeping up, but also with the level of competition it faces in the streaming service. The market is one that is constantly changing and due to its low barrier to entry, competition is a huge factor to be looked into, with major rivals being amazon prime, which offers free shipping all year and offers a huge variety of content. HBO is another streaming company which has an online subscription service, HBOGO, where customers can sign up without needing membership to the parent HBO Cable TV (Haggiag). Another issue of potentially great turmoil to the company is the black market. There is a high number of youths who download content with no charges whatsoever and this poses a consumer threat as they do not need to subscribe to the services offered by the company as they get all they need for free through downloads in the black market. In conclusion, it is evident that the company is one that is subject to change, but also can be classed to be a product of positive changes. With the assessment of all these, it is true to say that the company is one that needs change. However, its readiness for change can be seen as it is one that has been embracing change in the recent years. Its transition, for starters, from a DVD mail service to an internet subscription and online streaming giant is one that has revolutionized its profits and its global recognition all over the world. Secondly, its outreach into the world and its expansion into the other continents is a show of growth and zeal to become greater than it was in the past. What’s more, its bid to produce movies and TV shows is a show of its aim to expand horizons and its market not only in subscription and retail, but also in the entertainment industry. Another testament is its policies in the human resource department with the unlimited vacations policy being a show of its bid to make a comfortable and peaceful environment for its workers, which is a show of the management change theory known as the nudge theory, where management puts more into account the needs of the people before rationality (Business Balls).
Works Cited
Business Balls. "Change Management." n.d. www.businessballs.com. Web. 25 April 2016 <http://www.businessballs.com/changemanagement.htm>.
Forbes. "Forbes:The Most Innovative Companies ." May 2015. www.forbes.com. Web. 25 April 2016 <http://www.forbes.com/companies/netflix/>.
Haggiag, Ever. "Netflix SWOT Analysis: What Is There To Come In 2016?" 29 December 2015. iknowfirst.com. Web. 25 April 2016 <http://iknowfirst.com/netflix-swot-analysis-what-is-there-to-come-in-2016>.
"Legendary Ex-HR Director From Netflix Shares 6 Important Lessons." 30 December 2013. www.businessinsider.com. Web. 25 April 2016 <http://www.businessinsider.com/netflix-corporate-culture-hr-policy-2013-12>.
McDuling, John. "The Netflix effect: Your workmates are not your family." 26 October 2015. www.smh.com. Web. 25 April 2016 <http://www.smh.com.au/business/workplace-relations/the-netflix-effect-why-your-work-is-not-a-family-20151021-gkfeq1.html>.
Netflix. "About Netflix: Netflix has been leading the way for digital content since 1997." n.d. Netflix.com. Web. 2016 25 4 <https://media.netflix.com/en/about-netflix>.
TPD. "A Lesson from Netflix's HR Policies." 21 February 2014. blog.tpd.com. Web. 25 April 2016 <http://blog.tpd.com/big-lesson-netflix-hr-policy/>.
