1. Presentation 1: Netflix Case
By: Team Baldwin
Sarah Hsiao, Jaehee Lee, Al Li, Amanda Sorrentino and Meg Burke

2. Agenda -Describe the purpose of Netflix
-Describe the policies that shape the organization and tradition of Netflix in 2006. 

3. Non-economic Purposes of Netflix
“Allow for the best home video viewing for its customers”
Develop positive relationships with customers, major studios, Post Offices, and independent film makers
-“help bring high-potential films to market
Become the “ultimate online destination for movie enthusiasts”
“Stimulate demand on the older and less known movies”
Create a “personalized experience” for the viewer
-“familiar recommendation system”
-use data to remember customer preferences
-know the target market to prevent inconsistencies with strategy
Purpose is the first element of strategy.

4. Economic Purposes of Netflix
Increase number of subscriptions
Increase gross profit
Increase operating income

5. The Policies that Shape the Tradition and Organization of Neflix in 2006
Description
Tradition
Adopt profit driven format than traditional format both in economic and noneconomic context
Exercise movie enthusiastic culture
Rely on participatory decision making
Tradition in 2006
Netflix’s culture is adaptive to profit driven format than traditional format.
This culture is emerged and reinforced by threats, opportunities, and risks of the past and present that affected survival and success.
The culture and leadership influenced the tradition of Netflix ultimately affecting policy.

6. Tradition of Netflix in 2006 – The Past and Present Context Reinforcing the Culture
Key Threat: Direct Competition
Key Opportunities
Quick response to market
First Mover: Early-technology Adopters
Build distribution centers
Creating Relationship with suppliers
Finding competitive advantages
Queue and consumer rating system
Lower labor cost & focus on R&D
Best source for lesser-known movies

7. Tradition of Netflix in 2006 – The Past and Present Context Reinforcing the Culture
Past Success and Failure:
Challenge & solution
High costs but shipping delays
“Unlimited” product
Sales & gross profit increased
Planning and control implications
New resources adequacy issues to consider
Transparency
Stakeholder impact
Profit Driven Adaptation over Traditional Value
Netflix’s culture reinforced by the following past successes primarily responding to threats by tailoring its service to the customer’s taste:
This may have been the case as the concern of profit making of a company is embedded within employees because of a history experiencing a large layoff attempting to reach profitability business model.
This is supported by the management’s decreasing spending
Technology and development on the contrary to increasing marketing

8. Tradition of Netflix in 2006
Leadership
Affiliative
Visionary
Democratic and Focused Decision Maker:
Present- democratic: Involves his “team”
Past- focused: Led changes from Traditional merchandising system to Personalized system
Past & Present: Deviated from industry best practices (e.g. Yr absence of late fees: , Yr buying distribution rights to independent films, )
Established and exercised corporate value that helped employees to understand “why” and “want” components to be effective. For instance, he let the office building and conference rooms named for staff’s favorite movies.
Focused Decision Making- a single leader leads changes and initiatives

9. Organization of Netflix in 2006
Description
Organization
Recruit top management with top expertise in the industry
Employ managers who can thoroughly manage repackaging assembly line
Micro-manage content acquisition
Organization Structure
CEO, Reed Hastings
Chief Content Officer, Ted Sarandos
Chief Product Officer, Neil Hunt
Middle Management (e.g. buying staff, repackaging line)
Employees
Organization structure:
Organization System:
1. Recruitment 2. Selection 3. Training and Development