Analyzing Operations Management in Tech Companies: A Study on Netflix versus Amazon
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This research proposal aims to analyze the contrast and connection between the operations management as tech companies, specifically Netflix and Amazon. It includes literature review, research methodology, and SWOT analysis.
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Table of Contents Introduction......................................................................................................................................3 Background to the organisation:......................................................................................................3 Aim and objectives:.........................................................................................................................3 Rationale for selecting the topic:.....................................................................................................4 Literature review:.............................................................................................................................4 Research methodology:..................................................................................................................12 References......................................................................................................................................14
Introduction Tech operations are the simple framework that is based on system, people, technology that is related to the organisation. Operations are helping business organisations to drive the value for customer and business. It is helping business organisations to optimise the work and value that is required for the purpose of maximization of present customer satisfaction level. The present dissertation proposal is based on analysing the way operations management that can help in the purpose of analysing the perspective of operations management by comparing it in two organisations that is Amazon and Netflix(Dias and Navarro,2018). For this purpose different frameworks and models will be applied to analyse and achieve the overall laid aims and objectives. There will be application of secondary sources of information for the purpose of collecting relevant information and data to reach to relevant recommendation and conclusions. Background to the organisation: Netflix:Netflix is a top content platform having its headquarters in California. It is a subscription based streaming service provider organisation offering online streaming from library of television series and films. It produces original series and has also played a prominent role in the process of independent film distribution. It expanded its business in year 2007 with introduction of streaming media and entered content production industry in year 2013. Amazon:Amazon is a multinational brand that is focussed on cloud computing, artificial intelligence and digital streaming(Rataul, Tisch and Zámborský, 2018). It is one of the big five brands across united states and information technology industry along with Facebook. Apple, google, Microsoft. It stated as a online marketplace but expanded to sell software, apparel, jewellery, games, toys and food. It is well known for worlds largest online marketplace and cloud computing platform as per market and revenue capitalisation. Aim and objectives: Aim:"To analyse the contrast and connection between the operations management as tech companies." A study on Netflix versus Amazon Objectives: To apply different frameworks related to overall competition in the market system and the way organisation can stay relevant.
To evaluate various marketing structures to from earliest forms to present day. To formulate different leadership styles and the way customer satisfactioncan be maximised. Research questions: what are thedifferent frameworks related to overall competition in the market system and the way organisation can stay relevant? What arevarious marketing structures to from earliest forms to present day adopted in Netflix and amazon? Identifythedifferentleadershipstylesandthewaycustomersatisfactioncanbe maximised? Rationale for selecting the topic: The main aim of selecting this topic is to understand the way different operations are being managed in organisation. The research work will assist in the process of enhancing the communicationandresearchingskillsthatisveryimportantforthepurposeoffuture professional development. The collected information as per specific requirement of the research work is going to help researcher in having sufficient information base to achieve the overall laid aims and objectives. Literature review: Different frameworks related to overall competition in the market system and the way organisation can stay relevant The connection and contrast between their operations management as tech companies. (Amazon Prime Video and Netflix) ConnectionbetweenAmazon Prime Video and Netflixare as follows: Amazon Prime Video and Netflix are United States based and hence they have originated from the same country. This makes theirplace of origin similar. Both the companies are providingaccess to movies or TV showsof different genreswith the help of online streaming OTT (over the top) platforms.
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Thetarget audienceofAmazon Prime Video and Netflix is also thesame. That is why they are called strong competitors in the marketplace. Also, both the companies arecharging a monetary amount as theirsubscription or membership feesto get the access over there platforms. ContrastbetweenAmazon Prime Video and Netflixare as follows:Basis BasisAmazon Prime VideoNetflix Entry in the market Device Support Membership Cost Supporttogaming consoles Fairly new in market, hence it is not having extensive range of content. Relativelylessdevices support. It is comparatively lesser than Netflix. Itdoesnotsupportgaming consoles. Havinghugeandextensive range of content. Moredevicessupportthis platform. Ithasahighermembership cost than Amazon. Itsupportsawiderangeof gaming consoles. SWOT analysis: NetflixAmazon StrengthNetflixishavingastrong brandreputationthathas depicted exponential growth in recent years(Lee and et.al., 2019).Itishavingahigh globalpresenceandoffers ample opportunities to budding film makers. Amazonishavinghigher brandvalueandastring market position. Amazonisamarketleader they are also having advance distributionandlogistics strategies.
weaknessNetflix is a limited copyright that tolls up on their revenue. Netflixlackscustomercare executives that may harm the customer satisfaction. Amazon is focussing on north Americanmarketsits emergingmarkethavebeen acquired by its competitors. Thereislossofrevenuein someareassuchasion shipping aspects. Many times amazon position intermsofcustomersafety and security is also questioned becauseofhigherexternal risksarsingbecauseof violation of security policies. OpportunitiesNetflix can expand its market sharewiththeenhancing demand of OTT platforms. Netflixisalreadyhavinga global presence the can further strengthentheirsbaseby formationofstrategic partnershipbasewithlocal marketstocapturehigher marketshare(Jørgensenand Pedersen, 2018). Amazoncandevelopits market presence in emerging marketsbyadoptionof technologypenetrationad enhancementinInternet access. Amazoncanfocuson improvementofecosystem. Thedevelopmentofamazon appstorecanhelpin acquisitionofhighermarket share. threatsCovid 19 situation has affected thereproductionoforiginal movies and shows, Netflix is affectedbythepandemic situation. Thereisaggressive competition that may affect the competitivepositionof amazon.Theinnovationand strategicpartnershipmay
Therearegovernment regulations that is preventing themfromfurtherexpansion (Yan,, 2017). threatenthepresentmarket share of Amazon. Thereiscontinuous cybersecurity threat that may continueitsstrategyand operations in the market. NetflixAmazon Bargaining power of suppliersThereishighinfluenceof bargaining power of suppliers thatpossesimpactonthe pricingpolicies.Suppliers posses a edge and there is high bargainingpowerbecause Netflixiscompetingagainst traditionalmediadistributors sothereisneedforhigher flexibilitytodealwithhigh bargaining power of suppliers (Jenner, 2018). Suppliers may also influence the decision making industry. A organisation is depended on large base of suppliers. There is higher influence of suppliers on e commerce business. Bargainingpowerof customers In present situation customers posses high bargaining power overotherserviceproviders. Thereishighbargaining powerofcustomersasthey posseslowerswitchingcost that provides them with option to cancel their subscription and switchtoothermedia providersthatleadstohigh Amazonlaysemphasison enhancingthecustomer satisfaction level and offering higher value. For this they are usingcustomercentric approach in terms of offering their services.
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bargaining power of customers in long run. Competitive rivalryTheentertainandmedia industryishavingintense competitionlevelthatis leadingtohighpressureon organisationslikeNetflixto retain their existing customer base(WeillandWoerner, 2018). Amazonishavingahigher competitive advantage but the number of players that are part ofthemediaindustryhas increasedwithtime.Major competitor brands of amazon includes alibaba, walmart, flip kart, e bay and many others thatareofferingintense competition to Amazon. There islowerswitchingcostand readily available of substitutes is leading to high pressure on amazonastheycaneasily transfer from one retail brand to another at low cost. Threat of new entrantsFor Netflix there is threat of new entrants at moderate level that is created because of fast evolving technology. It leads tomoreopportunitieswhere new entrants can easily enter the industry. In Amazon the overall threat of new entrants is low. There is low switching cost, higher economies of scale and better customerloyalty.Allthese aspects are leading to a low threatofnewentrantsfor Amazon. Threat of substitutionThereismoderatelevelof threat of substitution. Netflix faces threat from other sources ofleisureactivitiesand Amazon is having high threat ofsubstitution.Thebiggest reasonforitisthelow switching cost as customer can
entertainment sources. To deal withthehighthreatof substitutionNetflixhasto worktowardsupdatingthe content library by addition of movies, TV shows. easily switch from one brand to another. Competitive nature for Netflix and Amazon As per view points ofLee (2021),the competition nature of Netflix is that this brand is ruling the streaming services. They are having 207.6 million paid subscribers about 67 million united states. Netflix is dominating the streaming market despite of the subscription becoming expensive Netflix has been successfully able to attract viewers(Pettersen and Krumsvik, 2019). Netflix is one of the biggest competitive brands of amazon prime that is a subscription based media streaming sector. Netflix is having a high market share that is in terms of media streaming that is 26.6 percent that is high as compared to amazon prime video with a traffic of 5.7 percent. Both prime video and Netflix are offering services in international and domestic market that is offering third party content. Netflix is one of the most popular brands in the streaming sector and is also well known for exclusive content (Who are Amazon's Competitors?, 2020). Management operations at Netflix: InNetflixtheorganisationalstructureishierarchicalwithbusinessesflexibilityand responsiveness to the changes in global market. With the corporate structure the organisation is working towards
(source: Netflix Inc.’s Organizational Structure & Its Strategic Implications, 2020) evolvement of original entertainment and on demand streaming services that can help in attracting target customers across different parts of the world.
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The organisational structure in Netflix is manifestation of the organisational design elements that posses a influence on business function components. There are functional divisions based on various functional areas that is human resource management, geographical division that enables strategic management specific to regional market needs. Management operations at Amazon: Amazonexpandeditsecommercebusinesshavingacombinationoflocalisationand standardisation.Theyarecateringtovariousmultipleinternationallocations.Thereis standardised of operational activities at amazon that is offering services in consistent manner across different markets(Graham and et.al., 2019). Amazon is presently having a robust supply chain that is highly efficient and delivering services by dependence on third party logistics. Their Marketing structures (Transition from (old) earliest forms to present day digital marketing techniques) Amazon:Amazon has always believed in having a engaged and thriving community even before there was advent of social media. Now presently this brand is utilising various platforms like Pinterest, Twitter, Facebook for the purpose of promoting its product across plethora of social channels and for facilitating engagement, conversation and discovery for its million followers. There is complete transformation of the way digital marketing techniques are now used by various e commerce sites(Berg and Knights, 2019). Such as: Facebook:Amazon is presently having 28.7 million likes on their Facebook page. They are offering useful information that is adding to human touch by addressing of comments. Twitter:Amazon is also using various campaigns that is driving their 2.7 million followers to additional services like Prime video and amazon music. Amazon is also working towards using of blog content. It is a platform that is used for content market rather than driving the process of sales direct. Pinterest:Pinterest is adopted by amazon as a extension of its online store. It is a social media site that is used by significant percentage of users to browse through the purchase ideas. Netflix:
Netflix is working towards using digital marketing strategy that is based on wide variety of marketing campaigns, opportunities and social media posts. Netflix social media team is using it for grabbing attention. It is based on a strategic and creative approach. Personalisation:Netflixisworkingtowardsusinghighamountofenhancementwith personalised interface(Ranta, Aarikka-Stenroos and Mäkinen, 2018). The content at home page is made completely personalised, Netflix also provides various suggestions based on the information. Humour in advertising: Keeping with latest: Netflix is also using snap-chat and Instagram that is demonstrating the success across multiple social media channels at a particular point of time. It is leading digital entrainment services to engage the target audience and enable the customer retention process. Different leadership styles and the way customer satisfaction can be maximised. Their Leadership styles Netflix:As per view points of Hal Koss (2021), Reef hastings is a American entrepreneur and the present CEO of media rental service Netflix. Reed hastings is using transformational leadership, reciprocity and creative intelligence that is for deserving their leadership abilities. The main leadership approach that is used is related to formal reviews, travel policies, personal time off and compensation packages far from the main stream. Hastings as a leader believes that there is need for a autonomic driven work environment. It can help in reinventing of human resource policies that can help in having creative intelligence process and transformational leadership abilities (7 Leadership Lessons From Netflix CEO Reed Hastings’ New Book, 2020). Amazon:Amazon is working towards using transformational leadership style as a task oriented leader. For the purpose of transforming the organisation Bezos is working towards using some innovationways.Themainleadershipqualitiesinvolveshavinglongtermgoals.String communication skills(Jeff Bezos Leadership Style, 2021). Customers satisfaction Amazon: The score of customers satisfaction in amazon in year 2020 was 79 out of 100 ASCI Points. Amazon is having a customer centric culture that is foregoing short term profits for long term
investments for improving customer experiences and long term dividends. CEO is working towards thanking their customer every year for the kind of awards (Amazon ranks No. 1 in customer satisfaction, 2020). Netflix: the customer satisfaction level with Netflix scoring at 79 index points. There are some of the differentiation aspects that are offered by Netflix that is resulting into higher satisfaction level of their customers(Aagaard,Aagaard and Harrison, 2019). Such as there is high amount of personalisation, Netflix has identified 2000 taste communities that is cluster of people who posses same content preferences. It is keeping their customers engaged, satisfied and offering them with higher satisfaction level. Their performance and rewards (staff) amazon: Amazon is ranked at number 2 as per the newly released worlds best employers 2020 list. Amazon employees across different parts of the world are doing a meaningful work and ensure that that they can offer the services as per their customer preferences. They are also offering recognition to employees based on their level of performance and contribution that they are making. Netflix: Netflix is focused on employee implemented that is best explained culture deck with context not control. Managers at Netflix are working towards offering all the facilities to employees so that they are able to make well informed decisions. This freedom has benefited self management and autonomy that is proving to be creator of greater well being and job satisfaction for employees that improves their performance level (Netflix CEO Embraces 'No Rules,' But Work Is Anything But Chill, 2020). Research methodology: Overview of research methodology: In the present research work there will be application of secondary form of data. In this there will be use of existing sources of information for the purpose of collecting the information from identified sources of journal, online, books and other sources. It is based on having qualitative form of information for the purpose of analysing the data and further achieving the
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laid aims and objectives. There will be use of questionnaire as a primary method of collecting information so that there is presence of sufficient information base. It is based on having information from the employees who are presently working in Netflix and amazon. Primary data: Primarydata is regarded as the first hand information that is collected by the researcher. It is a real data that involves collection of information from observation, surveys, questionnaires, personal interviewmethods. In the present research work there is use of questionnaire as a method to collect the necessary required information. Secondary method:In this method there is collection of data from exiting sources. It is a quick process as it is easy to collect the information from existing sources. In present report there is preparation of literature review that is based on information collected from books, journal articlesgovernmentpublicationsorinternalrecordsdependingontherequirementof information. Quantitative method:In this method there is collection of numerical form of information that is descriptive in nature. It is a method in which there is use of quantitative information. Qualitative research method:It is a method in which non numerical information is collected by the research. In this method data and informationcan be collectedthrough observation, interviews and focus groups by application of some methods. Mixed method:It is a method in which there is application of both quantitative and qualitative form of information in the context of research. In the present research work there will be use of both qualitative and quantitative form of method for the purpose of collecting the necessary required information for the purpose of further analysing it to achieve the laid aims and objectives of the report. Sampling:It is a method in which there is predetermined observations that are selected from a large population. It is a methodology that is depending on the type of analysis to be performed. Such as there are two common methods of sampling that includes simple random sampling and systematic sampling. There will be a sample size of 30 respondents who will be taken into consideration it will involves employees who are presently working in amazon and Netflix. It is going to have relevant first hand information with respect to analysing the different range of aspect.
References Books and Journal Dias, M. and Navarro, R., 2018. Is Netflix Dominating Brazil.International Journal of Business and Management Review,6(1), pp.19-32. Rataul, P., Tisch, D.G. and Zámborský, P., 2018.Netflix: Dynamic capabilities for global success. SAGE Publications: SAGE Business Cases Originals. Lee and et.al., 2019. Emerging technology and business model innovation: the case of artificial intelligence.Journal of Open Innovation: Technology, Market, and Complexity,5(3), p.44. Jørgensen, S. and Pedersen, L.J.T., 2018.RESTART sustainable business model innovation(p. 253). Springer Nature. Weill, P. and Woerner, S., 2018.What's your digital business model?: six questions to help you build the next-generation enterprise. Harvard Business Press. Jenner, M., 2018.Netflix and the Re-invention of Television. Springer. Yan, J., 2017.Identifying Online Streaming User Value in the Netflix Recommendation System. Drexel University. Pettersen, L. and Krumsvik, A.H., 2019. Rocking the boat: Proposing a participatory business model for news.The Journal of Media Innovations. Graham and et.al., 2019.How to run a city like Amazon, and other fables. Meatspace Press. Berg, N. and Knights, M., 2019.Amazon: How the world’s most relentless retailer will continue to revolutionize commerce. Kogan Page Publishers. Aagaard,A.,Aagaard,A.andHarrison,2019.DigitalBusinessModels.Cham:Springer International Publishing. Ranta, V., Aarikka-Stenroos, L. and Mäkinen, S.J., 2018. Creating value in the circular economy: A structured multiple-case analysis of business models.Journal of cleaner production,201, pp.988-1000. Online 7 Leadership Lessons From Netflix CEO Reed Hastings’ New Book, 2020 [online], Available through<https://builtin.com/company-culture/netflix-book> JeffBezosLeadershipStyle,2021[online],Available through<https://financhill.com/blog/investing/jeff-bezos-leadership-style> AmazonranksNo.1incustomersatisfaction,2020[online],Available through<https://www.retaildive.com/ex/mobilecommercedaily/amazon-ranks-no-1-in-customer- satisfaction>
Netflix CEO Embraces 'No Rules,' But Work Is Anything But Chill, 2020 [online], Available through<https://www.npr.org/2020/09/15/912917612/netflix-ceo-embraces-no-rules-but-work- is-anything-but-chill> Netflix Inc.’s Organizational Structure & Its Strategic Implications, 2020 [online], Available through<https://www.rancord.org/netflix-organizational-structure-design-organizational-chart- characteristics> WhoareAmazon'sCompetitors?,2020[online],Available through<https://penmypaper.com/knowledge-base/amazon-competitors>