“Case Study Analysis on Netflix”

Assessment 01

TECH 2300: - Service and Operations Management in IT

Assessment Type: Individual (Case Study)

CO-ORDINATED AND FACILITATED BY:

Mr. Dragoslav Mirkovic

&

Ms. Maryam Heidari

PREPARED BY:

Mr. Mohammadsoyeb Hanifbhai Mansuri

1812918
 PART- I

A timeline of Netflix Inc.

Netflix, is a streaming service industry that was founded in 1997 by Reed

Hastings and Mare Randolph by establishing an idea for rental services of DVD
via mail. At this time this industry disrupted the cable and satellite TV
technology by providing various subscription plans to the account holders
based on different streaming models. The company`s motive was to establish a
vide scope library including Movies, Series etc. where a person who takes the
subscription plan can surf vide range of collections and leverage the data and
analytics to personalize and produce the original content to the users of Netflix
(Jenner, 2018) This technology helps Netflix to deliver high rate of quality of
streaming to their consumers. Optimization the delivery of streaming content of
Netflix is established by video encoding and compression. Several tie ups with
the respective producers are made so that some of the series and movies are
only released solely on Netflix which makes a vide scope of business for online
streaming industry (Rataul, 2018).

SWOT Analysis

Strengths

• Strong brand reputation: With the replacement of a few highly regarded

television shows, Netflix has established a solid brand reputation and grown to
become a household name (Parker,B 2014).

• Affordable to User: Various subscriptions plan’s varying from one month to

one-year membership Netflix is available everywhere and is reasonably priced
in many Southeast Asian nations.
• Flexible response to market condition and user preferences: The business
is quite flexible. Netflix continuously makes changes to its service in response
to market conditions and user preferences. Because of this, Netflix is currently
in high demand compared to its competitors and encourages consumer loyalty
(Bobmanuel, 2022).

• Adaption of customer centric organization: The company is incredibly

flexible. Netflix continuously modifies its service based on user preferences and
what they wish to watch. For prospective filmmakers, Netflix offers a wide
range of original movies and TV shows (Parker,B 2014).

Weakness

• Increasing competition from other streaming services: At the time when

Netflix was an early leader in the streaming industry nowadays many more
alternatives have come up in the market in collaboration with other major
media companies with the rate of subscription plan less than the Netflix has
led to fragmentation of the library has increased the pressure on Netflix to
maintain the competitive environment.

• Quality of Streaming is dependent on third party service provider:

Although after developing the huge algorithm and big data analytics to provide
best resolution of streaming apart from that all the data is being store in to the
servers where the login user can access those data by utilizing third party
network provider. If in a area where the connectivity is not good the streaming
needs more time to buffer and quality of streaming needs to be compromised.

• Threat of piracy: Some individuals let’s say one of them would purchase the
membership of Netflix and as per the desired content one can record the screen
and then distribute the streamed content to all others.
Opportunities

 Growing demands of OTT: Given its strong reputation in the sector,

Netflix may benefit from the current market's rising demand for OTT
(over-the-top) services in order to expand and succeed even further.
 Extra Services on Same Platform: Focusing only on the television
shows, movies and series some educational content can also be brought
on the same platform which can enhance the productivity of Netflix.
Extra services can also include video games, cosmic books and Science
and Technology animated fundamentals. (Bobmanuel, 2022)
 Upgrading to latest economic model: The company can choose to
create original concepts that outperform those provided by current OTT
Channels. Previously, Netflix turned down the conventional advertising-
based business strategy, which freed them up to concentrate on offering
top-notch customer service.
 Strategic Partnerships Netflix has already made a name for itself on a
global scale. By establishing strategic alliances with regional markets,
they might increase the number of subscribers they have in order to help
them gain market share.

Threats

 Robust Competition: Netflix's market dominance is under threat from

the competitive landscape of the streaming sector. Competing businesses
might provide comparable services aggressively, which could result in
potential client attrition (Jenner, 2018).
 Content Piracy: Netflix and other streaming services continue to face
serious challenges from online piracy. Copyrighted content sharing and
illegal distribution can jeopardize a company's earnings and impede its
expansion.
 Regulatory Difficulties: Netflix's content offerings and reputation may
be impacted by censoring or removal of content due to differing regional
content rules
 Changing Customer tastes: Netflix's content strategy may need to adapt
continuously to suit customer needs in the event that changes occur in
consumer tastes and viewing habits.

PART- II

PORTER’S FIVE FORCE ANALYSIS

1. Competitive Rivalry
 There is a strong competitive rivalry in the field of streaming with
the huge companies such as Amazon Prime, Disney, Hot star,
Discovery and others those are battling in the market.
 Competitive bidding for well-liked and licensed content is the main
result where the users search for interesting and enticing material.
 If more and more competitors are involved along with Netflix,
pricing places a vital role along with the bundling of other services
in combination of providing the content library this can include
initial discounts, first time login free attempts etc. methods can be
used to attract and maintain customers. (Bajaj, 2020)
 User experience, which includes platform features, personalization
algorithms, and device compatibility, is another crucial
battleground for streaming services seeking a competitive
advantage.
2. Threat of New Entrants
 Starting a new company in this field requires a good financial
support for example getting the collection of contents, building the
algorithm and promoting the same to reach to the existing as well
as new customer is the threat as of new entrant
 Big companies like Amazon, Google etc. are already in the market
and providing the service at very massive cost so therefore loyal
and satisfied customers remains stick to them.
 However, companies like Netflix have a head start. They're well-
known, have lots of subscribers, a ton of content, and they really
understand how this industry works. So it's tough for newcomers
to catch up. (Bajaj, 2020)
 At the same time, existing competitors are fully aware and have
developed with customer devotion to their products over time.
Netflix 2000 faces less competition from new entrants because it
has a large international distribution network and a well-known
brand.

3. Threat of Substitutes
 There are very few substitutes for content in the sector. Thus, the
threat of replacement services in Netflix Porter's five forces model is
moderate.
 Netflix faces a threat from companies that provide the same
content on DVD or streaming.
 The availability of other leisure and entertainment options,
however, poses a greater challenge.
  As nowadays Netflix has started to build its own content rather
than depending on the licensed content it imposes less threat of
substitute those giving the access to their users.

4. Bargaining power of customers: Moderate

 A subscriber's payment is little and has no individual impact on
Netflix. According to Porter's Five Forces analysis model, its tiny
scale limits or lowers individual customers' impact on the internet
business.
 This external component is considered by the Five Forces analysis
model to be a contributor to customers' bargaining power, as
streaming competitors might leverage affordability to their
advantage.
 Price sensitivity is an external factor that influences Netflix's
marketing mix (4Ps) decisions, specifically pricing tactics for the
streaming service.
 More the unique and in housed content less chances of bargaining
by the users.

5. Bargaining power of Supplier: Weak

 Netflix's high distinctiveness is an external factor that boosts the
bargaining power of providers by making their content coveted and
difficult to substitute.
 Large number of content producers reduces their individual
bargaining power.
 Netflix's operational management guarantees that the streaming
service maximizes business performance while handling strategic
problems affecting content creators and their poor bargaining
power, as identified in this Five Forces research.
  Customers can access Netflix via a variety of internet-connected
devices, including as mobile phones, Smart TVs, TV set-top boxes,
and streaming devices like Fire stick. This infrastructure has a
significant function. With TV manufacturers, Netflix gets into
arrangements to have a Netflix button on remote controls.

PART- III

SERVICE LIFECYCLE

Service Strategy: - Demand Management

In the context of Netflix, demand management refers to projecting user demand

during various hours of the day and across various time zones in order to
guarantee that the firm has the capacity to deliver its streaming service without
any disruptions. (Lotz, 2021).

Recommendations:

1. Real-time Data Analytics: Netflix needs to invest in cutting edge real-time

data analytics if it's going to continuously monitor user behavior and
demand trends. These algorithms are able to predict periods of peak
demand, which allows the enterprise to make proper use of its resources.
(Claude, AI)
2. Time for distribution of content: In order to better manage demand,
Netflix should schedule when new content will be made available. A
highly anticipated show or movie should be released at off peak hours in
order to maintain server load balance and prevent overloads during peak
times (Noronha et al., 2018).
3. Scalable IT infrastructure: Netflix needs to ensure that its IT
infrastructure is able to adapt quickly to changes in demand.

Service Design-Availability Management:

According to Wenzel (2016), Netflix's service design incorporates availability
management to guarantee its members' continuous access to its streaming
service. Netflix should take into account the following IT in order to guarantee
high availability:

Recommendations

1. Redundancy and Failover methods: By including redundancy and

failover methods into essential infrastructure components, service
interruptions can be reduced in the event of hardware or software
malfunctions.
2. Geographically Distributed Data Centers: To guarantee redundancy and
reduce latency, Netflix ought to have data centers spread out
geographically. This strategy will improve the user experience for
subscribers in various geographical areas.
3. Load Balancing: By applying load balancing strategies, user requests will
be dispersed equally among servers, preventing any one node from being
overloaded and maximizing resource usage.

3. Service Transition - Release and Deployment Management:

Release and deployment management in Netflix's service transition involves

managing software updates and ensuring the integrity of the live environment.

Recommendations:

1. Automated Testing: In order to perform comprehensive tests on software

updates prior to deployment, Netflix should make an investment in
automated testing tools and procedures. This will lessen the possibility of
bringing problems or bugs into the active environment.
2. Canary Releases: Using this strategy entails rolling out updates to a
limited group of users ahead of a larger deployment. This allows Netflix
 to keep an eye out for any unforeseen problems and guarantee a
seamless release for every user.
3. Version Control and Rollback Strategies: By putting in place version
control systems and having clear rollback strategies, Netflix will be able
to roll back to a previous stable version in the event that there are
serious problems or faults during deployment.

4.Service Operation – Access Management:

Netflix and other streaming providers are quite concerned about unauthorized
"password sharing." Netflix can put these access control measures in place to
stop illegal password or account sharing

Recommendations:

1. Multi-Factor Authentication (MFA): Netflix ought to implement MFA for

user accounts, necessitating further verification in addition to the
password—for example, a one-time code texted to the user's email
address or mobile device. By doing this, you can prevent unwanted
access and improve the security of user accounts. (Claude, AI)
2. Netflix has the ability to restrict the quantity of devices that are allowed
to access an account at once. The organization can lessen the possibility
of password sharing among several individuals by capping the amount of
simultaneous logins.
3. Geolocation Monitoring: By tracking user access using geolocation data,
it is possible to identify potentially fraudulent behaviors such as
password sharing and identify suspect login patterns like several
simultaneous logins from different countries.

Reflection
From Netflix's point of view, service strategy is the most crucial of the four
main elements of the service lifecycle: service design, service transition, service
strategy, and service operation.

Service Plan: For Netflix to make well-informed judgments about its services
and how to set itself apart in the crowded streaming market, it is imperative
that it have a solid service strategy (Sadq, 2013).

For Netflix, the following factors make service strategy the most crucial
element:

Investment in Content and Differentiation: Netflix's content library is essential

to its success. Netflix can set itself apart from competitors and retain a devoted
subscriber base by matching their content investments with the tastes of their
target audience and the demands of the global market.

Market Expansion and Global Reach: A clear service strategy is necessary for
Netflix to achieve its goal of entering new markets. Understanding which
markets to focus on, how to localize content, and how to navigate regulatory
obstacles are all made possible by Service Strategy.

Customer Experience and Personalization: Netflix's intuitive interface and

customized content recommendations greatly boost customer satisfaction. This
includes improving content discovery, streamlining recommendation systems,
and reducing user annoyance.

Optimal Resource Allocation: Decisions about the budget for content

production, marketing, and IT infrastructure investments are guided by the
service strategy. The main reason Netflix is able to stay ahead of the
competition is because of its service strategy, which promotes innovation by
incentivizing the testing of new technologies.

Conclusion:
For Netflix to succeed, all aspects of the service lifecycle are important, but the
service strategy is the most important one. It aids Netflix in making future
plans so that it may continue to expand and remain one step ahead of the
competitors in the streaming market. Netflix is able to continue serving as by
focusing on the right content, markets, and user experience, one of the best
streaming services globally (Sadq, 2013).

References

Bobmanuel, A.A., 2022. The strategic analysis of netflix, inc.

Bajaj, D., 2020. Netflix Strategies for Marketing. Issue 2 Int'l JL Mgmt. &
Human., 3,p.405.

Claude AI. (search engine). "In the context of Netflix, demand management:
What are the service strategies during various hours of the day and across
various time zones in order to guarantee that the firm has the capacity to
deliver its streaming service?" Accessed April 14, 2024.
https://www.claudeai.com/search?q=In+the+context+of+Netflix
%2C+demand+management
%3A+What+are+the+service+strategies+during+various+hours+of+the+day+and
+across+various+time+zones+in+order+to+guarantee+that+the+firm+has+the+c
apacity+to+deliver+its+streaming+service%3F

Jenner, M., 2018. Netflix and the Re-invention of Television. Springer.

Lotz, A.D., 2021. In between the global and the local: Mapping the geographies
of Netflix as a multinational service. International Journal of Cultural Studies,
24(2), pp.195-215.

Noronha, A., Prates, A.G., Almeida, J.M. and Samaka, M., 2018, May.
Streaming delivery behavior and rationale: a study of Netflix service. In 2018
IEEE International Conference on Communications (ICC) (pp. 1-6). IEEE.
Parker, B. (2024, March 18). Netflix SWOT 2024 | SWOT Analysis of Netflix.
Business Strategy Hub. https://bstrategyhub.com/swot-analysis-of-netflix-
2019-netflix-swot-analysis/

Rataul, P., Tisch, D.G. and Zámborský, P., 2018. Netflix: Dynamic capabilities
for global success. SAGE Publications: SAGE Business Cases Originals.

Sadq, Z.M., 2013. Analysising Netflix‟ s Strategy. International Journal of

Science and Research (IJSR)–Режим доступа: https://www. ijsr.
net/archive/v4i3/22031503.pdf.

Wenzel, P., Mahle, I. and Pätzmann, J.U., 2016. Streaming services & service
design: An analysis of Netflix and Amazon video based on the Gap Model by
Parasuraman,