Netflix: Textbook Business, Competitors and Structure

This report examines Netflix's business idea of offering textbooks through a subscription service. It analyzes the dynamics and strategies of major competitors, including Amazon and Walmart, focusing on their pricing strategies, cost leadership, and online distribution channels. The report also details the ownership, management structure, and staffing requirements for Netflix's proposed textbook venture, including both organizational and functional structures. Diagrams illustrate these structures, highlighting the roles of key personnel such as the CEO, divisional managers, and departmental heads. The report concludes with a list of references used in the analysis.

Running head: BUSINESS
Business
Name of the student:
Name of the University:
Author note:

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Executive summary:
The report describes the business idea of Netflix for textbooks. The report analyses the dynamics
and strategies of the major competitors of Netflix. Further the report describes the ownership,
management structure and staffing along with appropriate diagrams.

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Table of Contents
Analysis of major competitor’s dynamics and strategies................................................................3
Ownership, management structure and staffing..............................................................................6
References:......................................................................................................................................9
Appendix:......................................................................................................................................10

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Analysis of major competitor’s dynamics and strategies
The following are the major competitors of Netflix:
 Amazon
 Walmart
Dynamics and strategies of Walmart
The basic strategy of Walmart is based upon cost leadership. Cost leadership refers to the
strategy wherein an organization emphasizes upon maintaining the lowest prices of its products
in order to maintain competitive advantage over the rivals ("Walmart", 2017). Walmart
emphasizes upon everyday low prices, which has been possible due to the economies of scale.
The company enjoys cost efficiency by efficiently utilizing the online channels of distribution.
More than three- fourth of the retail operations of walmart.com, comes from non- store
inventory. Walmart is constantly involved in improving its products and prices. Walmart’s
dynamics and strategies involve offering its customers a wide range of products at the lowest
possible prices. Cost leadership helps the company to gain competitive advantage over the others
(Joseph & Kuby, 2015).

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Profit rate above
competitive level
Industry
attractiveness
Competitive
strategy
Corporate
strategy
Business
strategy
Figure 1: Dynamics and strategies of Walmart
(Source: "Walmart", 2017)
Dynamics and strategies of Amazon
The dynamic pricing strategy of Amazon involves studying the behavior of the shoppers
as well as the behavior of the competitors in order to determine the appropriate strategies.
Dynamic pricing strategy refers to the strategy wherein the retailers change the prices of their
products according to the change in demand and the prices of the competitors. Amazon does not
always offer products at lowest prices ("Amazon.com: Online Shopping for Electronics, Apparel,
Computers, Books, DVDs & more", 2017). The company utilizes vast computer networks to
monitor the prices of several items offered by the rivals. The company usually offers huge
discounts on the products which are popular whereas, the company offers less popular products

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Lower cost
Structure
Selection
Sellers
Traffic
Customer experience
Lower prices
Growth
at higher prices than the competitors. The company’s strategy involves convincing the customers
that the company offers all the products at cheaper prices than the others however; in reality, the
company does not offer cheapest prices. The company has a dynamic warehouse network, which
ensures that the warehouses are located on the basis of delivery goals. The strategy of the
company involves offering low prices and providing fast and free shipping facilities. The pricing
strategies of Amazon have enabled the company to gain competitive advantage over the rivals.
Figure 2: Dynamics and strategies of Amazon
(Source: Chen Mislove & Wilson, 2016)

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Ownership, management structure and staffing
Organizational structure of Netflix:
The organizational structure largely influences the overall success of the organization.
The organizational structure of Netflix is discussed below.
Figure 3: Organizational structure of Netflix
(Source: www.netflix.com, 2017)
In order to ensure that a company runs successfully, it is essential for the organizations to
have an effective organizational structure along with appropriate staffing. Netflix is currently an
international internet streaming organization. However, the company wants to diversify its
operations diversifying its product range. The organization aims at providing text books to its
Founder and
CEO
Chief marketing
officer
Chief Talent
Officer
Chief
communications
officer
Chief product
officer

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customers at a monthly subscription. In order to incorporate this idea, the organization has to
reorganize its organizational structure accordingly. Netflix has been focusing upon its services
rather than focusing upon a product ("Netflix : Overview", 2017). The company is highly
dependent upon the Chief executive officer and owner of the company, Reed Hasting along with
the members of the executive team. Netflix has become a well- known international brand and it
is easier for the company to recruit qualified employees and retaining them. The company shall
have to set up a separate organizational structure for managing the textbooks department of the
organization. For this purpose, the organization shall have to appoint a divisional manager, who
shall head the new department of the organization. The chief marketing officer shall be
responsible for leading the marketing team in consultation with the divisional manager.
Functional structure of Netflix:
Figure 4: Functional structure of Netflix

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(Source: https://ir.netflix.com/)
The new idea of Netflix for textbooks shall involve appointment of a president and vice
president, who shall be responsible for managing the diversified business of the organization.
There shall be a separate accounts department that shall maintain the records related to the
revenue generated from the monthly subscriptions of the textbooks. The marketing team shall be
responsible for spreading awareness regarding the new business of the organization and
encouraging the respective individuals to subscribe to Netflix textbooks. The operations
department shall be responsible for managing the daily activities of the textbook department. The
activities shall involve planning, organizing, staffing, coordinating and controlling the
organizational resources. It is concerned with conversion of human resources and materials into
qualitative services in order to maximize the organizational profits. The human resource
department shall be concerned with recruitment, selection, training, performance appraisal,
managing legal issues and handling employee relations, payrolls and grievances. All the
respective departmental heads shall be accountable to the vice president and the vice president
shall directly report to the president of the Netflix textbook department.

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References:
Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more.
(2017). Amazon.com. Retrieved 27 October 2017, from https://www.amazon.com/
Chen, L., Mislove, A., & Wilson, C. (2016, April). An empirical analysis of algorithmic pricing
on Amazon marketplace. In Proceedings of the 25th International Conference on World
Wide Web (pp. 1339-1349). International World Wide Web Conferences Steering
Committee.
Walmart. (2017). Walmart. Retrieved 2 November 2017, from http://www.walmart.ca/
Joseph, L., & Kuby, M. (2015). Modeling retail chain expansion and maturity through wave
analysis: Theory and application to Walmart and Target. International Journal of Applied
Geospatial Research (IJAGR), 6(4), 1-26.
Netflix : Overview. (2017). Ir.netflix.com. Retrieved 27 October 2017, from
https://ir.netflix.com/

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Appendix:

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