Week 5 Assignment: The Most Innovative Companies
Netflix Organizational Challenge Introduction In 1997, Blockbuster Video was the dominate force in the home videorental business. Entrepreneur Reed Hastings noted there was a possibility of servicing a larger customer base in the DVD rental market by into expanding into the home rental market. Netflix Inc. made the strategic move to allow subscribed customers to receive movie to their home via the United States Postal service. Withthis innovative DVD delivery strategy, Netflix was able to surpass Blockbuster in the media rental business. Currently Netflix is facing the same problem in the media delivery business by other organizations and needs to make changes in orderto stay competitive. As stated in the text “Change in an organization can run the gamut from a modification to one small system, such as the processing of customer invoices in the sales department, to changes in the organization’s mission, vision, leadership, or culture, which are more significant in that they affect the fundamental way things are done across the entire organization”(London, Mone, 2012 p. 5.4). This paper will address the challenges Netflix faces from competitors and new technology. One of the distinguishing factors between Netflix Inc. and other video rental companies is their decision to bypass the traditional “brick and mortar” retail route
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NETFLIX ORGANIZATIONAL CHALLLENGE 3 and delivering their product from the warehouse directly to the customer. Netflix learned that they could cut cost by utilizing the internet for customers to decide which movies they wanted to rent. This initially involved Physical DVDs and Blu-ray disc. Netflix Has grown as a company, which now includes deals that the organization has made with various content providers, which increases its already impressive 60,000 plus titles. Netflix has over 50 million users in more than 40 countries. However, with proliferation of high-speed internet and the advancement of streaming content, Netflix has had to make transformational changes to its business model. In the text it states “Fundamental or transformational change is a radical change in the organization’s mission, vision, strategy, culture, or leadership” (London, Mone, 2012 p. 5.4). In order to have a clear idea of the change in the leadership climate and the future of the organization, it needs to have a clear vision statement. Reed Hastings, Netflix CEO made the following statement about the organizations vision “Becoming the best global entertainment distribution service. Licensing entertainment content around the world. Creating markets that are accessible to film makers. Helping content creators around the world to find a global audience” (Hasting, 2011). This vision addresses its plans for the future strategy of expanding
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NETFLIX ORGANIZATIONAL CHALLLENGE4its operations. Rival organizations often attempt to imitate the succe
