Netflix - Influences on Change in a Global and Technological Marketplace

Influences on Change in a Global and Technological Marketplace

Unit 2 Assignment

Introduction

Globalization and changing technology has been few of the main reasons which force an organization to change. The technology is evolving more rapidly than ever before. To keep up with the marketplace competition, an organization must adopt the technology to maintain its presence in the global market. The relationship between new technologies and emerging global markets has influenced the fundamental organizational structures and principles that define business organizations (Technology in Global Markets, n.d.).  This paper will assess how technology and the global marketplace influenced change within Netflix.

Description of the Organization

        Netflix is a U.S. based company which started as an online DVD rental company in 1997.

Their subscription rental plan allowed members to rent four DVDs at a time with no late fees or due date (Netflix, Inc. n.d.). Members could build a queue of their favorite titles and as they return one, the next one from the queue automatically get send out to them. Initially, they also offered free service for the first two weeks; this was received well by the customers, which allowed Netflix to attract new customers. In 2007, Netflix added a new feature to their offering to allow their members to stream their favorite movies and shows online using a PC or web-enabled device. Originally, Netflix did not charge extra for the service initially but as the online streaming became more popular they continued expanding more in that direction.  According to an internet traffic report by Sandvine, Netflix's streaming service accounts for 28.8% to 33% of all web traffic (Netflix, Inc. n.d.). Today, Netflix is the largest online movie and TV show streaming provider with more than 93 million streaming members and operates in over 190 countries worldwide.

How Technology Influenced Netflix

From early on, Netflix has seen future of their business is based on its streaming services and has made many efforts to build that business by offering more and higher quality content. This strategy has worked well, in conjunction with offering streaming access to current DVD subscribers for a small additional monthly fee (Davidson, 2011). To keep up with the new technology and to attract the new workforce and retain their existing talented workforce, they implemented changes to their human resources policies. The major reason for their success is that they empower their employees to make decisions on company’s behalf. Their employees get unlimited vacation days or they do not have to get their expenses approved or sit through the yearly performance reviews.

How the global marketplace influenced Netflix

To keep up with the competition and to increase the revenue, in early 2016, Netflix expanded to 130 countries except for China. With this expansion, they increased their global footprint. Since Netflix main product is online streaming, they did not have to open local offices or hire locals to support their expansion. They could accommodate the expansion by adding a few languages to its repertoire and hasn’t spent a ton of money on local content licensing in its new markets. Netflix could go global with minimal changes to their organization structure due to the nature of their business.

In conclusion, Netflix has successfully implemented major changes to their organizational structure to adopt new technologies and emerging global markets.  Netflix has taken advantage of constant improvements in internet speeds and rapid technology development to become one of the most successful and prominent content distribution networks. Due to the nature and current business structure, Netflix has been able to expand into the global market.  However, their success in the global market is yet to be determined.