Craze of the Hour

What is it that we so love to watch? Western movies & T.V Series.

How come? The dot-com boom Globalization Ever-increasing tech-friendly populace

Netflix: To The Rescue

Everyone’s answer=Online Streaming=Netflix. The pioneer in the field of live streaming and online entertainment. Started its journey by revolutionizing the industry of DVD-on-rent with its current

sales figures surpassing a billion. It is the answer to our prayers of weekend-long movie marathons scripted with a

customized playlist. Free to watch as many times as we wish.

Netflix – The Binge Fever

Netflix: The Ultimate Entertainer It is very cheap with a monthly subscription of only Rs.500 with a free first-month

subscription and no late fees. It has the largest online library of movies and T.V series. It has the best video recommendation algorithm. Available anywhere and anytime, given only internet facility. It is very much legal and now also in India. Gives access to content not yet available on TV. As of June 2016, it has 83 million subscribers over 190 countries. Its closest worldwide competitor, Amazon Video has a market share value of only 13%

compared to Netflix’s 36%. All other competitors are inconsequential. One of a kind exclusive content.

A Glimpse of Netflix Original Productions

Why Netflix, when we have free torrents?

“Just because its free, doesn’t mean it won’t cost you”. – Giovanni Elmore. Unlike torrents, Netflix has No viruses, no malware & no risk of Identity theft. Netflix is totally ad-free and legal. Key Reason: Laws of Anti-Piracy and Copyright Infringement and Ethics. Live example: World’s largest torrent site, kickass-torrent’s domain seized, alleged owner arrested.

Strategic Planning

Filling the gap: Every successful business is based on satisfying some currently unmet need in the market.In 1998 the business started with mail order DVD rentals and sales also known as DVD-by-mail operation. Online Video Streaming: Netflix then came up with online streaming. By entering licensing agreements with major film studios Netflix is able to distribute movies and TV shows online. Based on a low monthly price,subscribers can watch as much as they want from the content library, as far as they have an Internet connected screen.

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Resources and Competencies

The VRIO model is an optimal solution for analyzing Netflix’s resources and competencies; the model consists of organizational value, rarity offered for the customers, inimitability and organizational support. Value: The value that Netflix offers is a vast content library that contains around 100,000

movies and series, which creates a big value and variable options to their customers. Rarity: In online streaming industry, several firms offer similar products such as Hulu and

Amazon. However, Netflix invested $400 million to produce its own show in order to reduce the licensing cost

Inimitability: Netflix is expanding its business in the international market and is available in over 40 countries.

Organizational support: The activities providing rich content and excellent customer service are supported by the organization.

PESTEL AnalysisPolitical and legal: In terms of political and legal landscape, Netflix is affected by any change in copyright laws. Such changes can make distribution of movies and TV shows to members problematic. Moreover, problems can arise from current tax differentials between online service and brick-and-mortar DVD sales as new regulations seek to reduce this gap.

Economic: The customer’s income is a crucial factor for the industry that Netflix operates in. Revenue is highly sensitive to economic conditions as consumers may consider online streaming a luxury item. Therefore, the improvement in economic conditions since the financial crisis could increase future revenue. Importantly, the ability of Netflix to sustainably offer Netflix at a low monthly cost gives Netflix a competitive advantage

PESTEL AnalysisSocial: In terms of social landscape, demographic changes and changes of the way that people consume traditional media versus digital media are challenging factors for Netflix to adjust the content for all ages. Furthermore, increased access to electronic devices is affecting Netflix’s access to each market.

Technological Netflix’s ability to stay relevant in the online streaming market is highly affected by developments in technology.

Environmental: The environmental factor is not a significant one for Netflix as most of its production facilities happen online. It is furthermore a good sign for Netflix that the transition of Netflix from physical DVD’s to online streaming is less wasteful for the environment

"OUR CHALLENGES ARE EXECUTION CHALLENGES"

How NETFLIX changed the face of CONTENT MARKETING?

Give the customers what they want- They identified the target audience and gave audience what exactly they need

Audience Engagement- Replies to people in social media making them feel connected to the brand

Anticipate And Innovate- Netflix has had a lot of highs and lows, but they wouldn’t be where they are today if they didn’t take risks and stay ahead of the curve

High Quality content matters

What we can learn from NETFLIX’s Marketing Strategy?

Year 2007- Netflix sold their Billionth DVD and then they adopted a different marketing strategy- Video Streaming Service via Internet

Making it available to customers- They started offering their streaming service across so many platforms and operating systems that the majority of households in their target market will be able to subscribe if they wish

User Experience: Netflix personalizes movies and TV shows according to the customer needs

One of the most successful techniques that Netflix has employed when growing their user base is the use of the 1 month free trial

Content Marketing- In 2011 Netflix announced that they were funding the production of a political drama series entitled ”House Of Cards”

6 Market Domination Strategies From NETFLIX

Fill the Gap Think Strategic Partnership Be Prepared Think Recurring income Learn From Others Add value for the customers

Netflix’s Model of Corporate Teamwork• Highly Aligned

– Strategy and goals are clear, specific, broadly understood– Team interactions focused on strategy and goals, rather than tactics– Requires large investment in management time to be transparent and articulate and

perceptive• Loosely Coupled

– Minimal cross-functional meetings except to get aligned on goals and strategy– Trust between groups on tactics without previewing/approving each one – so groups

can move fast– Leaders reaching out proactively for ad-hoc coordination and perspective as

appropriate– Occasional post-mortems on tactics necessary to increase alignment

Context, not Control

Top-down decision-making

Management approval Committees Planning and process

valued more than results

Strategy Metrics Assumptions Objectives Clearly-defined roles Knowledge of the stakes Transparency around decision-

making

Context (Embrace) Control (Avoid)

The Rare Responsible Person

• Self motivating• Self aware• Self disciplined• Self improving• Acts like a leader• Doesn’t wait to be told what to do• Picks up the trash lying on the floor

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Hiring Fully Formed Adults

The best thing you can do for employees – a perk better than foosball or free sushi – is hire only ‘A’ players to work alongside them.”

Imagine a workplace where the employee handbook was cut in half and mostly demanded “adultlike behavior” on the part of employees? Imagine a company travel policy was a mere five words long: “Act in (the company’s) best interests”?

Netflix believes in taking care of managing their employees at the grassroot level by hiring the right people – candidates whose ambitions are aligned with the company’s goals and will serve the interest of organization – takes care of creating an efficient work place.

If you’re careful to hire people who will put the company’s interests first, who understand and support the desire for a high-performance workplace, 97% of your employees will do the right thing.

The Truth About Performance

Netflix has eliminated formal performance reviews.

When an employee is performing poorly, it is much more effective to sit down with the employee and have a conversation rather than funnel the individual into a Performance Improvement Plan (PIP), which tracks performance over time.

When Netflix stopped holding formal reviews, informal ‘360-degree reviews’ took their place. People are asked to identify things that colleagues should stop, start, or continue. In the beginning we used an anonymous software system, but over time we shifted to signed feedback, and many teams held their 360s face-to-face.

In principle, Netflix ensures that all its employees receive outstanding severance packages when they are let go from the company because it breeds a more positive business culture.

Creating Great Teams Netflix encouraged managers to imagine watching a documentary about what their

team would look like in six months. Which goals would the team accomplish in the future? What skills would the team need to accomplish these goals?

If you’re in a fast-changing business environment, you’re probably looking at a lot of mismatches, “In that case, you need to have honest conversations about letting some team members find a place where their skills are a better fit. You also need to recruit people with the right skills.

If you see a better opportunity elsewhere, you should be allowed to take what you’ve earned and leave. If you no longer want to work with us, we don’t want to hold you hostage.

Netflix continually told managers that building a great team was their most important task. We didn’t measure them on whether they were excellent coaches or mentors or got their paperwork done on time

Netflix – The HR Innovator Netflix doesn't distribute performance-based bonuses—they're unnecessary if you

hire the right people. Salaried employees were told to take whatever time they felt was appropriate.

Bosses and employees were asked to work it out with one another. While hourly workers have a more structured system, salaried employees are merely guided by HR on how to take time off.

The Netflix parental leave policy allows new parents up to one year of paid leave, more than any other company in the U.S., including Google, Facebook, LinkedIn, and Apple.

At Netflix results are prized over hours. There is no 9-5 but rather, by enabling truly flexible working Netflix shows that it understands that for today’s employees the “desk” can be anywhere and, provided it fits within the overall business structure, results can be achieved at anytime

At A GlanceNetflix Stock Price (NASDAQ:NFLX) $91.41 $3.75 (4.28%)

Netflix, Inc. 100 Winchester Circle,Los Gatos, California 95032

Phone 1 4085403700Industry Specialty RetailSector Retail/WholesaleFiscal Year-end Dec-16Profit Margin 1.85%Operating Margin (ttm) 3.32%

Financial Facts

What is important to note about Netflix is the lack of inventory and production costs. As most of their tangible titles are either rented or bought in mass quantities at a significant discount, profit margin appears to be tremendously healthy.

Their primary costs lie in the packaging and shipping of titles, as well as servers that monitor subscriptions. Their high sales growth can be attributed to the fact that Netflix is a relatively new company still in the high growth model of the business cycle

As Netflix’s business model is more dependent on subscription growth rather than managing operation expenses, sales growth, gross profit margin, and return on equity are the key ratios to monitor to determine the health of Netflix

Revenue HealthEfficiencyRevenue/Employee 1,832,300.0

0

Income Per Employee 33,146.00

Total Asset Turnover 0.79

Total revenue for Netflix has increased each year from 2012 to 2015. Revenue was $6,786,661,000 for 2015 versus $6,364,340,000 for 2014, which was a 23.2% increase. As revenue increases, expenses and income increase along with it.

Revenue $6.78B

Net Income $122.64M

2015 Sales Growth 23.20%

Employees 3,700

NETFLIX – The Journey The Destination

Netflix’s New Year’s resolution for 2016 was to become truly global, and it pretty much fulfilled the goal before the year was even a week old. As Reed Hastings, the company’s chief executive, was giving his keynote address at CES, Netflix flipped the switch on 130 countries. Netflix is now worldwide, with China being the only notable exception. 

Netflix is betting it can make a handful of programs with universal appeal and license some local content, with an eye to building a single, global library rather than a bunch of regional ones.

Netflix will have to prioritize making original shows with the widest possible reach, which means it will end up pushing shows tailored to its biggest market on users in smaller ones.

References http://www.ceo.com/human_resource_management/5-reasons-netflix-is-spearheading-the-hr-

revolution/ https://www.peoplematters.in/blog/strategic-hr/5-hr-strategies-you-should-learn-netflix-12320? http://www.eremedia.com/ere/recruiting-great-talent-is-the-core-of-the-netflix-hr-revolution/ http://www.hcamag.com/hr-news/how-netflix-reinvented-hr-202049.aspx http://www.fastcompany.com/3027124/lessons-learned/netflixs-major-hr-innovation-treating-humans-

like-people https://www.zenefits.com/blog/netflix-parental-leave-more-than-smart-hr/ Netflix in India: Here’s everything you need to know | The Indian Express The Ultimate Netflix Guide: Everything You Wanted To Know About Netflix But Were Afraid To Ask www.makeuseof.com Who Are Netflix's Main Competitors? (NFLX) | Investopedia www.investopedia.com Hotstar Vs Netflix: Consumer is the winner - Times of India

Managerial Communication

GROUP AM2 Aashna Akhtar – 16F703 Akashdeep Sanyal – 16F707 Ashish Joy – 16F719 Saan Isaac George – 16F744 Poorvi B.Happalad - 16H109 Pratish Prakash Mallya – 16H110