Stragegic Plan

A strategic envision And Its Impact on the Rise and Downf altogether Of Netflix, Inc. pic MBA 517 F entirely 2012 (Strategic prep atomic number 18dness and Policy synopsis) 14th Dec, 2012 TABLE OF CONTENTS Executive Summary Strategic Vision Business Objectives Environmental Analysis Industry & matched Analysis drudgery Analysis Business Strategy Implementation Plan supervise Ad notwithstandingment- A Dynamic Process Executive Summary Netflix, Inc. , the worlds largest and ahead(p) online videodisc term of a contract community was founded by Reed battle of battle of Hastings and Marc Randolph in the year 1999 and operated from Los Gatos, California.In the very initial days Netflix started its line of merchandise finished online DVD rental using web media which is called as www. netflix. com by internet. The fear was operated by delivering DVDs through postal mail and so charged the customers and this was called as stick out per DVD rental answers. Gradually wi th this the community revenues growingd and in a duad of 2 years Netflix g peerless for an expansion and the Pay per DVD revenue model was replaced with a fixedcalendar periodical tippytoe system, the monthly fee was about $ 15. 95 per month.This was a study breakthrough for Netflix which has allowed all its customers wherein they fundament rent up to 4DVDs per month without each out-of-pocket dates or late fees. After initializing the fixed monthly fee system, afterward in the year 2000, Netflix has launched integrity more dodge which was same customers can shit up to four DVDs with in their monomania one time for a fee of $19. 95 per month. Netflixs decided to recrudesce the lineage into two separate companies, one for the streaming and one for the bequest DVD line of reasoning which is called as Qwikster.And then Netflix started charging the subscribers two separate bills every(prenominal) month which made Netflix to face the unexpected downfall. Netflixs webs ite for the subscribers www. netflix. com , which helped in prioritizing the house and the choice of ikons beastlyd on the customers preferences. By doing so, Netflix tracks the gaze slants or queues of movies listed so that subscribers can browse movies of similar category and charter to limit. indeed Netflix used to ship movies which ar on the top of the respect list or queues ofsubscribers through mail.Netflix has de takeed their website as per the requirements in which counseling it has all the ability and the facility of tracking the subscribers with individualized ratings base of operations on all movies that customers had previously rated after viewing them. Netflix as a high society enjoyedtremendous mastery with all these success formulae, so it has decided to advance for an initial public offering. And later there was a huge exclude in the stock market prices which dropped and due o the downfall in the stock the guild position became little difficult for a companys initial offering to succeed withuncertainty in the financial markets. In July 2000, Reed Hastings, chief executive officer of Netflix, needed to decide whether the company should proceed withthe IPO or withdraw. During the current scenarios, Investment banks predicted that the IPOofNetflix would succeed only if itsshowing positive cash flows within a twelve-month horizon. In 2005, Netflix has big to a position where the company has 35,000 different film titles available and similarly shipped one million DVDs out on daily basis.Netflix developed and brinytain an extensive personalized video-recommendation system based on ratings and reviews by its customers. In 2006, Netflix offered a$ 100,000to the first developer of a video-recommendation program that could beat its existing algorithm. And later in the year2007, the company delivered its billionth DVD. In 2007, the company began to escape outside from its first core furrow model of mailing DVDs and introduced vid eo-on-demand via the Internet. Netflix concern has grown but while DVD sales fell from 2006 to 2011.September 18, 2011, Netflix announced its intentions to re punctuate and structure its DVD home media rental service as an independent subsidiary company calledQwikster, totally separating DVD rentals and streaming. Netflixs decided to split the business into two separate companies, one for the streaming and one for the legacy DVD business which is called as Qwikster. While splitting the business into two, however the businesses atomic number 18 going to run separately and they are going to operate on different websites. Subscribers of both(prenominal) the businesses got two separate billing statements (Probably it might score made sense in the long-run).It poses serious and immediate risks to Netflixs streaming business as the scheme to split the business into two did not took the subprogram as it was expected, and as the subscribers are the people who are all posing at home and trying to rent DVDs, watch videos probably arent thinking much about disruptive technologies and innovators plights. Subscribers just want to watch a movie as cheaply and as handily as contingent. at that place was a loud canslashthat ensued after Netflix split its pricing plan in two is be turned several notches and as subscribers wondered how this latest business plit provide affect them. The reason for the chief operating officer to make this outline is for the long-term betterment and too will be more profitable to nourish fewer subscribers paying more for month than continuously adding customers that only sign up for the cheapest plans and then withdraw soon. But the decision to raise prices so drastically $15. 98 a month to rent DVDs and for streaming is a 60% jump which caused customers rage and due to this Netflix has lost about 8,000,000 subscribers in one quarter of a year and investors had been buying on the want that subscriber ontogeny would continue f or a long time.When Netflix gone frontward and planned to separate the boldness into two as the dodge, the reaction of the subscribers is uncertain and there was a huge reaction from the subscribers and within a span of six months the company lost most of the customers and the organization has incurred huge termination which made the company cancel the separation plan. To implement the above strategy, the centering instead of bouncing back, I would suggest having a backup strategy which will be handling the management and opting for the alternative opportunities.If once we say that the strategy of separating the business is failed then first thing is we should identify the fix of the decision ,on all parameters analogous lost market share, customer base, on revenues and profit gained by the competitors etc. and estimate where the organization is positioning . Then I would be going ahead and performing a dislocation compend and identifying the current position of the orga nization and the most possible alternative strategies so that the organization will pose back to its previous market.Apparently wad analysis too helps in identifying the areas which we need to work up on the organizations strengths and opportunities and shipway to oercome the weakness and Threats which can cause hindrances. Reevaluating the proposed strategy is too one of the ways of implementing an effective strategic plan and a affectionate feedback of the implemented strategy will give any organization to insure the impact before everything goes uncontrollable.In this case, Instead of applying the refreshed strategy right away on the existing customers, what I suggest describes strategy to rebrand Netflix by applying the separation plans to mod-sprung(prenominal) customers and allowing the old customers to enjoy the previous benefits and slowly make them adapt to the new harvest-time through proper promotional benefits. If any organization decided to launch a new pro duct the best strategy would be introduce with the existing product so that the customers will be adapted to the new product and the existing customers will adapt to the new product by promoting with existing market.Hence the following plan describes a strategy to rebrand Netflix and successfully separate its business into Netflix and Qwikster based on the surveys and feedback collected from both existing and new customers. In-order to achieve this by preserveing the existing customers and rending new customers, Netflix has to market the new product (both streaming and DVDs rental) by providing the new customers a free month trial (30 days) and also by endowment the new product for the existing customers without any throw in the fee. This would actually hold the existing customers and attract the new customers.Based on the response from the feedback and surveys, CEO will decide whether to continue providing the new product or move back to the previous existing product (which was already proved as a successful product). After the free trial (30 days) completes the new customers have a choice to be with either the new product Qwikster or just stay with Netflix. Strategic Vision According to (CEO) Reed Hastings, Our vision is to change the way people access and view the movies they love. Reed Hastings (CEO) stiffly believed in delivering the product at an affordable price and conveniently .These are the success factors of Netflix. And also strongly believed that there are no replacements for the movies and the mission of Netflix can be considered as delivering the product in a desired way and make it attractive to the customers. customer revolve about and grounds the preferences of the subscribers which helped in customer satisfaction . The goals of the Netflix also played a major role in achieving the desired revenues. Business Objectives Through these accusatorys Netflix will come out of the chaotic situation .These documentals can be measured through all the functions of the business mostly of financial and the objectives can be achieved and monitored at all the levels in the business. Financial objectives and Strategic objectives The pinnacle combined objective in this scenario would be to buy the farm back the lost customer base which was due to change in strategy and to gain them back is the prime objective. The second objective should be to expand the Qwikster business by intromission the product and to attain a market share for them. The third objective should be increasing the new subscribers for the Netflix, Inc. o that the growing of the company would be prospering. The fourth objective should be to increase the revenues of the company by haughty the costs . The fifth objective should be to add value for business and pay the dividends to the shareholders. The above stated objectives are measured in fiscal terms and other than the financial objectives Netflix should also focus on being a successful launcher for the new product Qwikster and also check into that the quality is main(prenominal)tained without compromising and deliver the best customer service for its subscribers as it always did .These are the objectives which are more operational in nature. To add on to the Operational objectives improvising on new technology, by improve the current dish out and optimum utilization of resources by maintaining employee relations and steadfast with statutory rules and running the business on social and ethical behaviors are also considered as the operational objectives which can be make to the success for any organization. The time frame to achieve all the above listed objectives should be on quarterly basis.This could be achieved by doing a trend analysis on a monthly basis and reviewing how it can be achieved over a span of one year. Environmental Analysis The drastic growth of technology is one of the major successes for the Netflix and it is driven on technology based. though it was s tarted with delivering DVDs through postal services, gradually it started capturing the preferences of the customers by creating a wish list and based on their choices it has gained the customer satisfaction.Then on using the current technology Netflix has developed streaming videos and later it was heading into developing the apps for usage on mobile devices also. When we discuss about the financial aspect due to the increase in prices there was a downfall in the shares of the company. Immediately after the decision was announced the share prices dropped drastically and there are some(prenominal) an(prenominal) cancelations from the subscribers. Netflix faced a major downfall at the time of respite in 2000 and after the price hike strategy in 2011.These two years are the challenging years for the company however Netflix has get the best these with its current strategies. pic Industry & Competitive Analysis Netflix major competitors are Hulu and blockbuster and Netflix share is also disturbed other than the major players among you tube and also effected due to piracy. However Netflix success factor has created a brand image for streaming movies and DVD rentals. Netflix also faced arguing from Redbox (movie rentals). grind Analysis Netflixs strengths Netflix is strong in selling their business. The main marketing strategy which attracts the customer is one month free trail and which helps the customers to get used to the product and continues with Netflix account. The other major strength for the Netflix is that they are ductile in delivering the DVDs to home every time subscribes are willing to watch a movie. The Netflix passage that customers can create a recommendation based on their interest and those DVDs will be delivered very fast. Netflix is one of the pioneers in using the technology as Netflix streaming method helps the customers to watch promptly and they use the internet as the medium and Netflix is available on all electronic gadgets cu rrently. Netflix strength is that they are patent protected recommendation service. Competitive prices are also which made the Netflix on of the niche in rental movie services. Netflixs weakness The fall in the Netflix demand is due to the price strategy when the company decided to split the business which resulted in the downfall of Netflix. The other weakness is the dependency on the associates which has increased in the costs of Netflix. The disputes with major partners have resulted in limiting the streaming content. The rules of the movie content are also available with the competitors due to weak agreement. Netflixs opportunities Netflix is like a brand when it comes to watching movies it is the first to create. Though there are many competitors it was like a brand for watching movies online. whiz more hazard is to focus on the international market as these are pioneers they can capture the world market spread. The other opportunity is as they are big players in this market segment they have the privilege of acquire associated with big movie companies for a better price. Netflix can grab the opportunity using it on the mobile devices. Netflix can focus on streaming Games also. Netflixs threats The major threats for the Netflix are from the few competitors like hulu and blockbuster. The threat could be availability of pirated sites online and YouTube could also be a possible threat in near future as there are lots of channels spread throughout uploading movies. There is tremendous growth in technology and this company should be thinking on amend delivery methods. The threat is on increasing shipping costs which is giving an impact on the profits of the company. Conclusion To summarize on the SWOT analysis is work on getting back the subscribers and find the ways on overcoming the weakness and threats and utilizing the opportunities and concentrate on building a strong market so that the company can run in a profit mode and can give a tough competition to the competitors. Business StrategyThe objective is achieved through the success of the company, while capturing the customer base by spreading the product with marketing their product at one month free trail offer. Due to this they have captured the new subscribers and also focused on the internet users who will be shopping DVDs or games online. The main objective for last year was to get back the customers and the CEO was successful by writing an apology mail to existing customers and apologizing over media about the decision he made about splitting the business.The CEOs letter includes I want to acknowledge and thank our many members that stuck with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly. both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to take in actions. The apology reached most of the customers and many are back to the Netflix as it is one of the most compatible sources we have today.Implementation Plan Implementation plan is the process where any organization should plan how they are going to achieve the suggested strategy. Netflix main focus should be on holding existing subscribers and also Netflix should attract new subscribers by marketing the new product appropriately. Marketing also plays a crucial role in implementing phase. Netflix should focus more on building a successful organization and the policies of the company should be make in such a way that the strategies are supporting them.The company should also set best practices so that the various problems like customer complaints or technical issues can be addressed more in effect and immediately. Below is the Gantt chart view of the parameters and time frame. Also we can come across the time line displaying the tasks and the time frame. pic pic In my opinion if we follow these move before implem enting any product, it can yield best results. These are considered as the best practices for any implementation plan as implementation is the key for success for any product before its launched. Monitoring Adjustment- A Dynamic ProcessThe supervise plan would be to gain the control of the company so that the shareholders will invest in the company by victorious the confidence of both subscribers and stakeholders where in the Netflix will not opt for any merger or opt for any business combination and the monitoring plan for the streaming company would be to target about 30 million customers across the world and be the worlds leading internet subscribing company where in providing movies for an affordable price and adapt to the technology where in the services can be streamed through various mediums like computers, televisions phones etc. Monitoring Elements Price Control Quality Assurance Customer Service and satisfaction Profitability Financial Elements The monitoring plan for Netflix, fit in to my opinion should be that the company should concentrate more on main Netflix Company as its a parent company and then study the market trends for the streaming company by reaching the subscribers and getting them adapted to the new streaming company. However, for the second company to get correct with the market is a long term process. Netflix would have promoted the streaming DVDs with the original company over time and then it should have merged the process with renaming instead of doing it at the initial stage.Below attached is the survey and the result is that subscribers dilemma regarding the product itself and why Qwikster did not reach customers as they are unconscious what it does really. pic It would have be great success if the name would have riming with Netflix so that the subscribers would have thought these two companies are related and as Netflix is most popular for movies and among customers.Here the monitoring of the entire implementatio n plan are through with(p) by taking surveys and one on one feedback from supervisors, managers and erect management heads and based on those reviews and suggestions change can be done and also time frame is limited or expanded. Overall with all these steps implemented and thereby Netflix when follows the suggested strategy then can outperform the current situation and also hold the existing customers while getting new customers. This will make Netflix, Inc. successfully launch its new product and remain worlds largest and leading online DVD rental company.References Websites Netflix, Inc. www. netflix. com http//ir. netflix. com/downloads http//en. wikipedia. org/wiki/Netflix http//www. bizjournals. com/sanjose/ news/2011/09/19/complete-text-of-netflix-ceos-apology. html? page=all www. google. com http//www. cbsnews. com/8301-505124_162-43452943/turns-out-netflix-blew-the-qwikster-name-pick-out-of-fear/ www. yahoo. com Thompson, A. A. , Peteraf, M. A. , Gamble, J. E. & S trickland III, A. J. Crafting and Executing Strategy Concepts and Readings (18th ed. ). newborn York McGraw-Hill/Irwin.