Netflix: A Business Strategy and Innovation Analysis Report

This report provides a comprehensive analysis of Netflix, examining its evolution from a DVD rental service to a global streaming leader. It delves into Netflix's business model, highlighting its subscription-based revenue and value propositions, including on-demand content and a user-friendly experience. The report explores Netflix's strategic context, including its marketing strategies, focus on customer satisfaction, and competitive landscape. It analyzes Netflix's innovative approach to content creation, international expansion, and technological advancements. The report also discusses the company's vision and mission, emphasizing its commitment to providing exceptional entertainment services and its impact on the entertainment industry. The report covers various aspects of Netflix's operations, including its history of innovation, marketing strategies, and ability to adapt to market changes, and also provides a detailed overview of the company's global market entry strategies and its ability to overcome challenges, ultimately contributing to its success.

Abstract
Since its establishment in 1997, Netflix has been on the rise. However, a careful
examination of the company’s strengths strategy reveals that it faced a few little and large
difficulties along the road, some of which had the ability to permanently distance the
company from the market. Nevertheless, it handled strategically with all these concerns,
with many of them being dealt with in a proactive and preventative manner, while others
were dealt with quickly, essentially faster than any of its competitors. This article
examines a few such challenges that the corporation has experienced since its inception
until recently, when it nearly conquered the entire world. The firm focused on its in-depth
knowledge of how markets react in an internet-based economy.

Keywords
Figure 1
Table of contents: 47 words
Table of figures: 21 words
Bibliography: 199 words
Total :2797 word

Table of Contents
Abstract.......................................................................................................................................................2
Keywords.....................................................................................................................................................3
.................................................................................................................................................................... 3
1. Introduction.........................................................................................................................................5
1.1 What is Netflix?.....................................................................................................................................5
1.2 History of Innovation and Creativity......................................................................................................5
2. Business Model....................................................................................................................................6
2.1 Vison Statement....................................................................................................................................8
2.2 Value Propositions.................................................................................................................................8
3. Strategic Context.................................................................................................................................9
3.1 Marketing Strategy..............................................................................................................................10
3.2 Focus on Customer Satisfaction...........................................................................................................11
3.3 Netflix Competitors and Threat...........................................................................................................12
4. Conclusion.........................................................................................................................................14
Table of Figures
Figure 1........................................................................................................................................................3
Figure 2........................................................................................................................................................6
Figure 3........................................................................................................................................................8
Figure 4........................................................................................................................................................9
Figure 5......................................................................................................................................................12
Figure 6......................................................................................................................................................13
Figure 7......................................................................................................................................................14
Figure 8......................................................................................................................................................15
Figure 9......................................................................................................................................................15
Figure 10....................................................................................................................................................16

1. Introduction
This report was written as a mid-level coursework to study Netflix's creative and
innovative leadership. To understand the scope of this organization's creativity and
innovation, we must first examine its history, followed by the technique and power of
Netflix's creative and innovative leadership.
1.1 What is Netflix?
Netflix, Inc. (NFLX) is the world's most popular online television network, with over
203.67 million members in nearly 200 countries watching 125 million hours of
documentaries, original series, and feature films each day. With one affordable monthly
membership, Netflix members may watch as many as they want, when they want, on any
internet connected device screen. Users may watch without being interrupted by
commercials and can play, pause, and restart their viewing at any time and from any
location. (Jack M. Wilson Professor, 2012)
1.2 History of Innovation and Creativity
Netflix, Inc.” was founded in 1997 by Reed Hastings and Marc Randolph in California.”
After being charged $40 for returning Apollo 13 late, Reed Hastings a math teacher who
came up with this idea for Netflix. Netflix started as a movie rental website that worked
on a normal pay-per-rental system. In early 2000, the company discontinued the original
model. Netflix has built its reputation based on its business model of flat-fee unlimited
rentals without due dates, late fees, shipping, and handling fees, or per title rental fees.
(Gloria, MAR 26, 2018)

The company started giving DVD rentals and sales service in 1998, after a year sale were
suspended, and a subscription plan was introduced in the company because of the
investor who invested $30 million, which helped the company to focus on innovation and
improve their services. In the year 2000, Netflix signed income sharing deals with
Warner Brothers and Columbia film studios. (40 Amazing Netflix Statistics and Facts,
n.d.)
Netflix used the post service to mail DVDs to their customers from 1999 until 2007.
The internet became a major phenomenon, with 70 percent of Americans already getting
access to it. Rather than resisting the internet revolution, which could pose a significant
danger to his company, Reed Hastings chose to establish a streaming service that allows
customers to view TV series and movies on their PCs instantly. (Raras, 2018)
In the year 2009 and 2010, Netflix continued its innovations by becoming available on
more platforms such as PlayStation, iPad, iPhone, Xbox, and other platforms. All of the
Netflix Innovation was honored in 2012, when the Netflix won its first Emmy
Engineering Award. The National Academy of Television Arts & Sciences grants this
honor on companies that produce major innovations in broadcasting technology. (Butler,
2019)
Figure 2 (40 Amazing Netflix Statistics and Facts, n.d.)

2. Business Model
Netflix's international expansion is important to the company's success. Netflix's unique
business approach has played a significant role. It was operating in over 190 countries in
2017 its international streaming revenues exceeded domestic streaming revenues for the
first time in the second quarter of 2018 this is an incredible achievement for a company
who was only in the US before 2010 and was in 50 countries by 2015. Netflix enters all
markets step by step there were three stages to Netflix's global market entry. Netflix
carefully selected its initial nearby markets. As a result, Netflix was able to develop in
areas where foreigner challenges appear to be less significant. (Brochet, Srinivasan, &
Norris, 2019)
The second phase Netflix extended its footprint to some 50 countries in order to operate
in a wider variety of markets the choice of these markets was on the basis of the degree of
attractiveness shared similarities affluent consumers and the availability of broadband
Internet this phase included growing into new markets with the use of investments, which
included technological investments in big data and analytics, which allowed Netflix to
learn more about internationalization and partner with local players. (Healy, 2018)
Third phase, Netflix focused on adding more languages including subtitles expanding its
support for a range of device and payment partnerships Netflix also give importance on
improving its mobile experience it includes signups, credentials and authentication also
focus on developing relationships with device makers, TV operators and Internet service
providers as well Netflix has responded to the new markets. (40 Amazing Netflix
Statistics and Facts, n.d.)
Netflix partnered with KDDI in Japan and Telefonica in Spain, it wants to reach a
massive following through content. Netflix saw that for a developing country specific
knowledge is essential for success in local markets this knowledge needs to be brought
deep unemotional, political, institutional, regulatory, technical, cultural and customers

were taken into consideration this enhanced Netflix credibility and helped it smooth
relationships with key stake holders. (PEREIRA, 2021)
The business model of Netflix is subscription based. Subscriptions are Netflix's main
source of revenue. The corporation makes money by charging customers to access
Netflix material and having DVDs delivered to them. Based on the streaming quality of
the content delivered, the company offers three different plans to the consumer. The first
is the Basic, where standard definition information can be transmitted. The second option
is the Standard, which allows for high-definition video to be transmitted. The last option
is a Premium subscription, which allows you to stream content in Ultra High-Definition
resolution. (Villarroel, Taylor, & Tucci, 2018)
Figure 3

Netflix has collaborations with Smart TV manufacturers, gaming businesses, television
networks, as well as Google and Amazon. Netflix's main activities are acquiring and
retaining employees, producing content, and obtaining licenses. Netflix also values
customer relationships; users can self-register, which is convenient for both the
corporation and the customer; Netflix also offers gift cards for which customers are
rewarded, and online live chat services are available for users with questions or
complaints. Furthermore, unlike many other companies in the entertainment industry,
Netflix has not remained constant, and its success is due to its ability to follow trends and
overcome obstacles. (Healy, 2018)
2.1 Vison Statement
Netflix’s vision statement is “Becoming the best global entertainment distribution
service.”
The company's vision statement explains what it aims to achieve. It highlights the desire
to raise the standards in the delivery of on-demand video services. This mission statement
reflects the leading position Netflix aspires to achieve and maintain in the industry.
(Taylor, 2021)
Figure 4

2.2 Value Propositions
Netflix strategies method and aims t0 give the greatest customer experience.
Here are some of Netflix’s favorite parts.
 Users can stream 24hours in 7 days, without commercial advertisements.
 Gives the shows and movies in high-definition quality.
 Unlimited access to Netflix original films and series that aren't accessible
anywhere else.
 A 30-day free trial is available to new users.
 Receive recommendations for new shows to watch.
 Avoid commercials and other adverts- Some individuals enjoy watching
commercials and other advertisements, while others avoid them.
 Netflix resolves the issue that most consumers have with movie theaters and
mainstream media. With four easy words – Watch Anywhere –cancel anytime.
 Netflix's sharing account’s function allows families, friends, or even
organizations to share an account with pre-configured filters and preferences.

 Users can personalize their Netflix accounts and preferences by creating user
profiles.
 The admin can alter, allow, or even prohibit users using the User profiles. (Lucy,
2018)
3. Strategic Context
Mission statement of Netflix “We promise our customers stellar service, our suppliers a
valuable partner, our investors the prospects of sustained profitable growth, and our
employees the allure of huge impact.” (Taylor, 2021)
The statement reflects the company's strategic position: providing nice and unmatched
video recreation services. It additionally demonstrates however the corporation strikes a
balance between client happiness and the money desires of its different stakeholders. in
keeping with Netflix, client satisfaction is significant to success. it's for this reason that
Netflix tries to form original content. this system has tried to achieve success for Netflix,
because it has helped the corporate increase its subscriber base and improve its spoken
name. the prices of making original programming area unit wide, and Netflix features a
sizable debt load that it's going to have to be compelled to take care of. However, the
company's increasing operational margins and audience size counsel that, relative to its
competitors and different problems, it's going to have less to stress concerning its debt.
the corporate can perform well within the long-term, supported its previous success.
(Brochet, Srinivasan, & Norris, 2019) Overall, Netflix has stunned investors and
shareholders with its performance. The focus of Netflix on original content is one in all
the pillars of Netflix's business growth strategy. the corporate has continuing to feature to
its library of original films and tv shows. It additionally intends to extend the amount of
them in 2020 and 2021. Its competitive fosse has fully grown abundant wider. excluding
that, original material is that the primary individual for net streaming services. Not solely

Netflix, however additionally its competitors, like Amazon Prime, area unit finance in
original content. Netflix, on the opposite hand, features a way larger library than the
others. (Jack M. Wilson Professor, 2012)
3.1 Marketing Strategy
Netflix has also made marketing investments to expand its brand. With high quality
content, the organization has been able to gain market share. The company has a strong
word of mouth because of its quality and innovative content. The company benefited
greatly from word of mouth and earned media in the United States and Canada, two of its
largest and early markets. Netflix began as an entertainment company but has evolved
into a lifestyle brand for youngsters and Younger Generations It represented itself as a
technology, entertainment, and lifestyle company. With time, the organization became
more adept at marketing. Its marketing strategy became more developed over time.
(Siddiqi, 2019)
The mission statement for Netflix really reflects the desire to grow both in the US and
internationally with a clear focus on end user experience and it also references the
Figure 5 (IQBAL, 2021)