Netflix Value Chain Analysis

990 Words 4 Pages
My team for the Business Strategic IT Project evaluated the IT and information systems for the company Netflix. I worked with JJ Good and Ashley Mahaffey to accomplish a thorough analysis of Netflix and how the company used IT to further its success. We extensively researched the history of our company by specifically focusing on what the company does to make itself unique. Next, we evaluated Netflix’s IT strategy to understand how they plan to execute their goals and milestones. One way to critically examine the company’s IT was through their value chain. Additionally, we assessed Netflix’s IT exemplars and benefits that significantly transformed the company to be a leader among competitors. Further, we analyzed how Netflix compares against …show more content…
The service can range from $8 to $12 depending on how many screens the user wants to pay for. Reed Hasting founded Netflix in 1997, and in a Business Insider interview he comments that the company’s strategy is “about brand clarity…that we stand for $7.99 per month for unlimited streaming. That’s what we really want to focus on and we think that’s the optimal strategy” (Figure 1). Netflix also utilizes the value chain framework, which was discussed at length in class, by allowing content owners, networks, and broadcasters to use a service like Netflix to reach out to viewers (Figure 2). Also, because Netflix produces original content, they can directly provide viewers with their content (Figure 2). Another way that Netflix uses IT is for inventory management. By using just-in-time inventory, Netflix can burn a DVD that was requested by a customer and send it out immediately. Thus, the company keeps less stock on hand (Figure 3). In addition, Netflix uses serialized inventory to track the viewing history of their users to provide recommendations on what to watch next (figure 3). Lastly, the bullwhip effect that was touched upon in class, is addressed by Netflix. The “advanced inventory systems” let the company “process and update inventory records in real time” so that the inventory is “monitored and controlled” (Figure 3). Thus, the shifting …show more content…
Because of the high success of the Netflix App, viewers can watch their favorite guilty pleasure on the go, wherever they want. Especially with the new initiative of offline downloading, users can now save their movies and shows and view them without Wi-Fi. Another way Netflix has benefitted is through the development of an internet speed analysis website called Fast.com. This website is a quick and simple test for any internet user to assess their current internet download speed, whether they are a Netflix member or not. It does, however, only report download speed, but that is because it is the most critical for video quality. Netflix uses its own content to conduct the test, so the application is realistic for users. This is a great tool for Netflix because it shows that when there are issues with internet speed it is not because of Netflix, it is because of the internet provider. Thus, it eliminates users association of slow download speed with the company itself. Therefore, it is evident that IT has played an integral part in the company’s

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