Introduction
Marc Randolph and Reed Hastings founded Netflix Inc. in the year 1997. It is a multinational company majoring in the entertainment industry, and its main headquarters are located in Los Gatos, California. Netflix specializes in the provision of streaming media and the various videos online and in the DVD via mail (Kerner, 2016). By the year 1998, the company had grown through the introduction of the DVD via mail business. In the year 2007, the corporation expanded its business by allowing online streaming of movies while retaining the DVD services. By the year 2010, the firm has expanded internationally by allowing streaming to be available in countries such as Canada. By the onset of this year, Netflix services were made available in over 190 countries. Importantly, the company entered the production business in the year 2013 after the introduction of its first series that was named, House of Cards. By October this year, the company had over 80 million subscribers with more than 40 million viewers located in the United States of America. Indeed, this paper seeks to analyze the business strategies, mission, and vision of Netflix Company. Besides that, it also gives a brief timeline of the corporation and explains the sales management approaches, as well as, customer service and turn offs.
Timeline of Netflix Company
Netflix Corporation is the leading provider of DVD rent-by-main firm in the world today. The corporation has over 1.1 million subscribers paying a monthly fee of about 20 dollars for unlimited services (Lafayette, 2016). The firm offers over 15000 titles maintaining an inventory of over 5 million discs. Notably, the company has come up with several ways of speeding its delivery by opening about 19 shipping centers in the United States of America. Thus, most of the customers receive the Netflix DVDs after two days of ordering them on the website of the corporation. As seen in the introductory section, the company was founded in the year 1997 (Lafayette, 2016). The DVD format offered by the firm stored high-quality films. However, at the time of the founding of the company, the DVD contained less than 1000 titles. During the time, the hardware that used to play the discs was quite expensive hence owned by few people in America. As a result, the founders of the corporation thought the discs had potentials to replace the bulk and the low-resolution videotapes that were common during the time. The firm took advantage of the small weights of the DVDs that could be shipped to the users at low prices. In the year 1998, the company opened officially for businesses and had over 30 employees, as well as, over 920 titles that were used for rent.
Delegate your assignment to our experts and they will do the rest.
The promotional sales of the firm were boosted in the year 1998 after making about 10,000 copies of a DVD that contained a testimony made by Bill Clinton in his alleged affair with Monica Lewinsky. The discs were sold for only 2 cents each and 2 dollars for shipping and handling of the DVDs (Lafayette, 2016). In the year 1999, Netflix collaborated with the All-Movie Guide that directed the viewers to search for a movie title and carry it to the Web site of the firm. Later in the same year, the corporation introduced another service into the market referred to as the Marquee Program. The service allowed the subscribers to pay 16 dollars a month for them to select four DVDs. Thus, this increased the number of sales for the company. CineMatch is another service that was released by the corporation in the year 2000. The service introduced compared the rental patterns of its customers looking for similarities in the taste of the movies hence recommending titles to various individuals. The company has been growing over the years introducing new services that would benefit the customers thus increasing its sales up-to-date.
Vision, Mission, and Strategies of the Company
In the year 2011, the founders of Netflix expressed their vision for the future, which was to become the best global program for entertainment distribution. Besides that, the company aims at licensing the various content of television worldwide and creating open markets for the filmmakers in the globe today. Further, the corporation aims at helping the filmmakers and producers to find a global audience that would be of help in purchasing the produced movies. The brand promise offered by the corporation is referred to as a quest making its mission statement, which is to guarantee stellar services to their clients. The company promises a valuable partnership with its suppliers. Moreover, the company promises a sustainable growth to its investors, as well as, the growth of employees. Some of the values of the firm include productivity, judgment, intelligence, creativity, honesty, selflessness, passion, reliability, and communication. Thus, the values, the vision and mission statement of the company have played a significant role in the growth of the corporation.
Sales Management Approach
Netflix realized the fact a majority of people prefer the internet TV as opposed to the linear TV whereby channels present programs at particular times and contain complicated remote controls. Internet TV has been in demand in the recent years replacing the linear television. One of the sales management approach used by the Netflix Company is the production of content that is preferred by a majority of people. In this year, the company hopes to spend 5 billion dollars on a P&L basis and about 6 billion dollars on a cash basis on the content loved by most individuals. The corporation has also set aside money that would be used in marketing and getting people excited to join and subscribe to Netflix. Importantly, the company has realized that people’s taste is quite broad in a single market. The internet has played a significant role in allowing the firm to offer a wide variety. Moreover, the user interface of the company’s website can learn and make various recommendations depending on the tastes of the subscribers. The company has gained from its experience in that it found out that the 20th documentary on bicycling would play a significant role in shifting the viewers’ attention from the other 19 such documentaries. The corporation strives to achieve the best in every category of entertainment. Thus, this shows that the firm curates its service instead of having as many movie titles as possible.
Contrary to that, the licensing of the Netflix Corporation is based on time. The corporation licenses content from a variety of suppliers in every market. Therefore, this mirrors the fragmented nature of the content industry. Since the year 2013, the corporation has been on a scale where it can economically content that is original. The offering has grown tremendously as the firm gains further confidence, as well as, scale. Every unique helps the business to learn what its customers require, ways of production and active promotion, as well as, the positive results of the original brand of the company. Regarding launching either a series or a film, the company has a significant advantage as opposed to its direct TV competitors because each show presented on Netflix does not compete for the limited time slots as in the linear television. Thus, this allows the company to devote itself to a whole television season rather than just a little episode. Therefore, the corporation provides a platform for a creative story telling thus attracting creative talents.
Through the personalization of content to the right members, the company has a large opportunity to promote originality regarding content without time limits. The slate of original series is rapidly growing in the corporation. The success of the firm is due to the creative execution of the Netflix team. Netflix offers focused and passion brands. Besides that, it does not allow its clients to pay to view any movie. Thus, the fact that the corporation provides a flat-free unlimited view has increased the number of subscribers of the company. In addition to that, the firm competes for spending and relaxation, unlike the linear TV networks. The company works towards acquiring new customers every year.
The company estimates its revenue every time to make decisions on what to spend the money on and the extent of margin wanted in that period. However, the competitive pressures in the bidding for content would lead the company to have a less content instead of the overspending its revenues (Eddie, 2015). In the contribution margin of the USA, the company has raised its spending on its content and marketing thus increasing its contribution to over 20 percent. In the trajectories made in the corporation, the company is likely to raise its subscribers to over 90 million members in the USA. The margin strategy of the organization is to grow and expand in the international market while remaining profitable as well. The Corporation first opened international markets in Canada, United Kingdom, Netherlands and Ireland. The companies in those countries are growing at a significant rate generating positive contributions. In the new markets, the company has increased its awareness allowing most people to subscribe to their services. Thus, this has played a significant role in attracting the high growth rate trends of Netflix Inc.
Further, Netflix promotes its sales through various marketing programs such as digital advertisements. Moreover, the corporation provides free trial periods for its new customers as a means of promoting their brands. In addition to that, the company supports its customer experience through improving its user interface. It has expanded its streaming services to the interrelated devices as well. The efforts made by the corporation has enabled the firm to increase the number of subscribers thus increasing its sales. The improved subscriber growth has played a significant role in improving the word-of-mouth brand promotion for the services offered by the Corporation leading to growth in the number of subscribed members. The increased in the number of subscribers results in an increase in the revenue generated by the business.
Customer Service and Turn-Offs
A few years back, the corporation published summaries of its philosophies of management. The theories played a significant role in increasing the revenues of the firm from a tiny DVD-by-mail to a multibillion-dollar company (Comcast Subs to Access Netflix Through X1 Platform, 2016). Thus, the company has boomed since its expansion. However, some aspects of the philosophy such as the policy preventing vacations of its employees, the outstanding employees’ plans, as well as, freedom and the responsibility granted to its workforce are quite controversial. However, it updated its culture and management philosophy that took into account two years of operational experience and the feedback received by the corporation on the philosophies that had been made before. Most people find the approach to talent and culture in the organization as compelling. The employees in the business get unlimited days off work, and they can carry out various activities without the need of getting permission and authorization from its managers. Besides that, the company does not conduct an annual evaluation of the performance of its workers, and the management pays the employees well. The company’s slogan indicates that it hires adults that are fully formed and treats them just as the slogan stipulates by giving them high amounts of freedom allowing them to take various risks and innovations in the corporation. However, the employees are expected to work at a fast speed.
Contrary to that, the corporation assumes that the employees have sound judgment, which is viewed as a solution to any ambiguous issue affecting the organization. Most employees have worked in the firm for a relatively extended period hence showing that the company has strategies of employee retention implemented. In addition to that, the Netflix Inc. Corporation has a culture characterized by the freedom and responsibility of the workers. In the past few years, the corporation has reinvented itself in a way that has allowed it to bounce back from its missteps. According to Berg, (2016), giving the workers a greater freedom and not paying attention to the tiny details has helped the company in its recent growth. The company believes in the fact that trusting the employees would enable them to develop their careers to greater heights (Hachman, 2016). Moreover, the workers ate the Netflix headquarters in California are aware that they are not judged by how hard they are seen to work but are judged by their productive nature. In the firm, working for long hours would lead to the firing of an employee while working for a short period and being highly productive would result in promotions. Therefore, Netflix is guided by that principle of freedom and responsibility of employees allowing it to rise from a DVD-by-mail company to being the world’s largest streaming video service raising its paid subscribers to 50 million in the United States of America.
In the year 2011, the company raised its price by about 50 percent upsetting its customers significantly. However, the company recovered from the misstep by declaring that it would separate the DVD-by-mail into a different company. The company lost over 800,000 subscribers, and its stocks tanked. Importantly, the company managed to raise its shares (Seitz, 2016). The company has always focused on what coming ahead and the various ways it needs to re-adjust itself to adapt to the change. Notably, Netflix management works only with a winning team of employees. The corporation acknowledges the fact that not everyone has a culture of high-performance since most of the workers value their stability more than their performance at work.
In the corporate culture of Netflix Company, the company hires only the “A” players and does all it can to make the workers happy. For all the full-time employees, the company pays them beyond the market rates. The company depends on the density of the talents hence they pay their workforce well. Moreover, the corporation thinks that high salaries would retain the employees since leaving the organization may lead to low income. Importantly, Netflix focuses on salaries of the employees rather than other benefits while believing that the workers have the right to choose the way in which they will use their incomes. Thus, the company does not offer any advantage or stock options to its workforce. Besides that, Netflix does not believe in tying the pay of its workers to their performances. Therefore, the high pay is responsible for the employee retention and the reduced turnover intention rates that are detrimental to a company.
Netflix Inc. is doing entirely different from other societies regarding performance reviews. The company focuses on telling about their performance instead of sugarcoating information. The company did away with the annual performance reviews but instead adopted the 360 system for reconsideration whereby the management holds conversations with the workforce regularly on the work they are doing getting rid of the traditional annual evaluation of the performance of the corporation. Thus, Netflix has an ongoing culture of holding regular conversations and honest communication hence keeping track of the daily performance, identifying the issues and letting the employees know the areas that require the change in the company. Another important thing to note about the enterprise is the fact that the management is responsible for the creation of a great team in the corporation. The managers envision themselves as the players by asking themselves of the various accomplishments of the team and the particular desired result. The answers given to these questions do not show what the firm can do but instead focuses on the various objectives and goals of the corporation. Thus, this challenges the managers to find out the different means of making a great team from its workforce. Besides that, the organization focuses on the capabilities of every member of the team and knows how to change their skills if it cannot help in reaching the desired goals. Therefore, the organizational policies and culture of the company, as seen in this section, has played a significant role in boosting the operations and the success of the Netflix Inc.
Recommendations
Some of the recommendations of the company would be to devise means of training and to boost the talent of the employees instead of firing the non-performers in the enterprise. Training would help increase the workforce while holding annual meeting would play a substantial role in motivating the employees to achieve the next year’s goals. Annual meetings are not necessarily for evaluating the yearly performance of the company but instead help in informing the workers of the various purposes for the next year. The meeting would be of help in informing the employees of the ways in which the next year’s goals and objectives would be achieved. Besides that, the company should come up with various means of motivating the employees of the firm to boost their performances. For instance, the company can opt to hold team-building activities that would help in creating unity and build a team spirit among its workforce as well. In addition to that, the corporation should give benefits to the employees since it would act as a source of motivation. For example, the managers should introduce the medical coverage of their employees.
Conclusion
Netflix is the world largest company that allows customers to stream online their favorite films and movies. Marc Randolph and Reed Hastings founded Netflix Inc. in the year 1997. The headquarters of the company are located in California. Netflix Corporation is the leading provider of DVD rent-by-main firm in the world today. The corporation has over 1.1 million subscribers paying a monthly fee of about 20 dollars for unlimited services. Netflix promotes its sales through various marketing programs such as digital advertisements. Moreover, the corporation provides free trial periods for its new customers as a means of promoting their brands. In addition to that, the company improves its customer experience through improving its user interface. Most employees have worked in the firm for a relatively extended period hence showing that the corporation has strategies of employee retention implemented. In addition to that, the Netflix Inc. Corporation has a culture characterized by the freedom and responsibility of the workers. Therefore, this paper has focused on Netflix Inc. by highlighting the timeline, sales management approach, customer service, as well as, turnoffs of the company. Besides that, this paper has given some recommendations that the firm can adopt to boost its sales.
References
Berg, M. (2016). Netflix Is About To Give You $800 Million Worth Of More Original Content. Forbes.Com , 1.
Comcast Subs to Access Netflix Through X1 Platform. (2016). Telecommunications Reports , 82 (14), 30.
Eddie, Y. (2015). What Netflix and Starbucks Know About Cash Flow. Harvard Business Review Digital Articles , 2-4.
Hachman, M. (2016). Confirmed: Only Microsoft Edge will play Netflix content at 1080p on your PC. Pcworld , 17-19.
Kerner, S. M. (2016). Symantec Warns of Malware Posing as Netflix Apps. Eweek , 1.
Lafayette, J. (2016). Netflix Stock Boxed In Despite Deals. Broadcasting & Cable , 146 (25), 4.
Seitz, P. (2016, July 5). Comcast Will Offer Direct Access To Netflix On Its Cable Box. Investors Business Daily . p. 18.
