Netflix Organizational Change, Organizational Management Change Examples. Netflix change management model and organizational change examples.
Table of Contents
- Netflix Organizational Change
- Background of the Netflix Company
- Netflix Organizational Change History
- Reason for the Netflix Organizational Change
- How Netflix Handle the Forces of Organizational Change
- Also, Conclusion and Takeaway.
Netflix Organizational Change Example
Technology has changed the world in many ways including education, business, sports, entertainment, etc. Many worldwide renowned companies have been closed due to the revolution of new technology such as the computer, smartphone, and social media. Some of them have managed to cope with the force of change by applying sophisticated strategies as well as accepted the organizational change.
Netflix is one of the best examples that had changed its business model and strategy to survive. It has handled the force of organizational change to achieve a competitive advantage. Hence, it has become one of the most popular video streaming platforms for netizens. Netflix started its business by selling DVDs and rentals by mail. In 2007, Netflix introduced the new video streaming feature for films and television series. The proper utilizing of the force of change has helped to achieve success. However, it is believed that Netflix is one of the most popular platforms for watching new movies. They have achieved competitive advantages for adopting new features as per audience demand.
Background of the Netflix Company
Netflix has become one of the most popular American production companies all over the world. It was established in 1997 by Marc Randolph and Reed Hastings in California (Maddodi, 2019). In 1998, the official website was introduced with 925 items available to rent for pay per month approach and with only 35 employees (Maddodi, 2019).
Netflix launched its operation with the first and largest online DVD-rental store. Since 2012, Netflix is producing and distributing its original content including film and television series that contribute to entertain a huge amount of viewers. This variety of contents has been stored at the online library for viewing by the subscribers. Since 2016, it is providing services in around 190 countries. This company has managed to establish its office globally including in Brazil, the Netherlands, France, the United Kingdom, Japan, India, and South Korea (Maddodi, 2019). In 2020, it is estimated that Netflix owns over 195 million subscribers globally who are involved with paying a monthly payment.
However, Netflix is available worldwide except in China, Syria, and North Korea. According to a report in 2020, Netflix has achieved $1.2 billion operating income for its outstanding performance with sophisticated features.
Netflix Organizational Change History
Netflix made two major changes since its launch. At first, it opened the subscription option in 1999 to store DVD rental (Voigt, Buliga & Michl, 2017). It was the first change in the business model in the history of Netflix. This change allows consumers to rent unlimited DVD rental without late fees. Later, in 2007, Netflix made its second change by launching an online video streaming service (Voigt, Buliga & Michl, 2017). This change has been accepted by consumers. It is believed that the launching of video streaming service has become the prime business pillar of income. Recently, Netflix changed from HTTP to HTTPS encryption the website in order to ensure the privacy of the viewer (Reed & Kranch, 2017).
Reason for the Netflix Organizational Change
According to Corfield (2017), Netflix is becoming famous day by day for its easy accessibility quality and sophisticated features. After all, the new technology adoption and adaption is an inevitable approach to exceed customer demand. In the 21st century, people do not want to allocate extra time to go to the cinema hall. People used to go to the cinema hall to watch new movies before introducing the service of watching movies at home by Netflix. New technology including a computer, laptop, and smartphone entertain people easily through internet service. In addition, the social media revolution changed the way we communicate with each other. It has become a great platform for sharing user-generated content including photos and videos. Now, many citizen journalists are practising democratic journalism because of the social media revolution.
Most people globally use social media in many perspectives such as education, entertainment, and marketing. Netflix’s authority had perceived the upcoming market demand. Therefore, they have changed the business model to allow people to watch movies and television series on computers and smartphones. The authority of Netflix realized that consumers do not like to store video (Voigt, Buliga & Michl, 2017), so they change the business model. Additionally, Netflix is always aware of the approaches of competitors. Blockbuster is a key competitor of Netflix, hence, they added a new feature to become distinguished from competitors. The reason for changing the business model of Netflix was appropriate and effective to bring success.
How Netflix Handle the Forces of Organizational Change
Organizational change refers to the adjustment and transformation of the way a company operates. The company brings a minor or major change to improve productivity as well as cope with the new context. There are two types of forces of change in a company such as external forces and internal forces.
The element of the external forces is technological change, globalization, social and political change, and managing ethical behaviours. For example, technological change and globalization are the main external forces that compel Netflix to change the feature. New technology changes people’s expectations and behaviours; therefore, it is important to change the features, tools, and patterns of the company product or service. Netflix handled the forces of change effectively to bring success and prosperity to the company. Apart from that, internal forces influence the organization to change such as a change in managerial personnel, work climate, effectiveness, employee expectation, and crisis. Netflix realized that the service of watching the movie at home will definitely reduce the entertainment budget and time therefore they accepted the organizational change.
Conclusion and Takeaway
Netflix started its journey as an ordinary company but it has achieved a competitive advantage for changing its business model in order to fulfil customer demand. The authority of the company changed its feature to cope with new technology. It has made two changes in 1999 and 2007. However, the video streaming service brought huge popularity and income for the company that launched in 2007. Based on the discussion, the author has determined some takeaways that can be a key point for any company. Firstly, it is very important to change the company feature to fulfil customers’ expectations. Additionally, digital adaption and adoption need to be accepted for both employee and customer’s gratification. Finally, sophisticated features and tools have to be added to the company for better function such as Netflix launched its online video streaming feature in 2007. “The measure of intelligence is the ability to change” -Albert Einstein
- Corfield, J. (2017). Network vs. Netflix: a comparative content analysis of demographics across prime-time television and Netflix Original Programming.
- Maddodi, S. (2019). Netflix Bigdata Analytics-The Emergence of Data-Driven Recommendation.
- Reed, A., & Kranch, M. (2017, March). Identifying HTTPS-protected Netflix videos in real-time. In Proceedings of the Seventh ACM on Conference on Data and Application Security and Privacy (pp. 361-368).
- Voigt, K. I., Buliga, O., & Michl, K. (2017). Entertainment on demand: The case of Netflix. In Business Model Pioneers (pp. 127-141). Springer, Cham.
Citation for this Article (APA 7th Edition)
Kobiruzzaman, M. M. (2021, January 30). Netflix Organizational Change: Organizational Management Change Examples. Educational Website For Online Learning. https://newsmoor.com/netflix-organizational-change-organizational-management-change-examples/