Case 11: Netflix case study analysis questions

1.     How strong are the competitive forces in the rapidly evolving global market for streamed video content? Do a five-forces analysis to support your answer.

·       Competition from rival sellers

·       Extreme competition within rival sellers has companies spending millions in content and original programming and exclusive rights to shows and movies.

·       Competition from potential new entrants

·       New players can easily create content through the usual platforms like Youtube or can setup their own streaming services. However, the established brand like Netflix, Amazon Prime, Binge, Disney plus, etc. makes it challenging to enter the streaming services business.

·       Competition from producers of substitute products

·       Cable and satellite TV can be considered substitutes. However, the convenience of streamed services reduced the immediate threat of substitutes.

·       Supplier bargaining power

·       The demand for quality streaming services has become an ongoing war between providers to get exclusive rights to content providers to attract and retain their subscribers thus leading to a high subscription cost.

·       Customer bargaining power

·       With the influx of streaming services available, customers can easily switch subscription platforms if they are dissatisfied with the content.

2.     What forces are driving change in this market for streamed entertainment? Are the combined impacts of these driving forces likely to be favorable or unfavorable in term of their effects on competitive intensity and future industry profitability?

·       Technological advancement: A favourable effect to both customers and suppliers. Improved streaming technology and a faster 5G internet speed enable higher-quality streaming and can attract more subscribers.

·       Competition: The competition amongst streaming platforms has driven up the costs of the content which is an unfavorable effect to both customers and suppliers.

·       Globalisation: A favourable effects to many streaming platforms as new market means more subscribers and more profits.

·       Content: Quality-themed content means a favourable welcome to customers.

3.     What does your strategic group map of this industry look like? How attractively is Netflix positioned on the map? Why?

CONTENT	High
	Moderate
	Low
	PRICE

 LEGEND:

-       NETFLIX 

-       DISNEY Plus 

-       HBO Max 

-       APPLE TV

         ·           NETFLIX is positioned as a company with a strong focus on original content and premium pricing. NETFLIX's original content focus is a benchmark for all streaming services.                             NETFLIX's global reach has become the company’s competitive advantage. NETFLIX is the                    most recognized streaming platform worldwide.

4.     What key factors will determine a streaming company’s success in this industry in the next 3–5 years?

·       Content Quality and Library: Offering vast and diverse content quality and library of shows will determine the success of any streaming platform in the next 3 to 5 years.

·       Pricing: With more competition in the streaming platform business, a streaming platform company should be balanced. Companies should offer bundled services to lure more customers and subscribers.

·       Partnerships: A streaming platform company should consider partnering exclusively to content creators or studios or probably other streaming platform companies for better content and a much quality-driven content to attract more subscribers.

·       Innovation: In the world of streaming services, technological innovation is a game-changer. Any streaming platform company should strive to develop innovation to attract more subscribers.

5.     What is Netflix’s strategy? Which of the five generic competitive strategies discussed in Chapter 5 most closely fits the competitive approach that Netflix is taking? What type of competitive advantage is Netflix trying to achieve?

·       Differentiation Strategy: Netflix produces high-quality original series, films, and documentaries across various genres, catering to a wide range of audiences worldwide. This put Netflix as a gold standard in terms of streaming services.

6.     What does a SWOT analysis of Netflix reveal about the overall attractiveness of its situation in mid-2020?

STRENGTH	WEAKNESSES	OPPORTUNITIES	THREATS
·       Extensive library content ·       Global reach ·       Original content	·       Increasing competition ·       High content costs	·       Global expansion ·       Strategic re-branding ·       Partnerships and collaborations	·       rising operational costs ·       Password sharing

 

7.     What is your appraisal of Netflix’s operating and financial performance based on the data in case Exhibits 1, 2, 5, 6, and 7? What positives and negatives do you see in Netflix’s performance? Use the financial ratios in Table 4.1 of Chapter 4 as a guide in doing the calculations needed to arrive at an analysis-based answer to your assessment of Netflix’s recent financial performance.

·       Positive: Judging from Exhibit 1, the revenues of Netflix have grown significantly since 2015.

·       Negative: Exhibit 6 suggests a drop in paid net additions in the UCAN (US and Canada streaming) area. This translates into a drop in subscribers second quarter of 2019.

·       It seems like Netflix’s net profit margin and ROA are both increasing from 2015 and a steady debt-to-equity ratio, suggesting that the company’s stability is promising.

8.     How well is Apple positioned to compete in the global streaming market as of mid-2020?  What do you see as Apple’s chief competitive weakness, and what can Apple do to correct this weakness?

·       Apple was positioned to compete in the global streaming market but faced strengths and weaknesses in its efforts to establish itself to the market.

Strength ·       Brand recognition ·       Financial resources ·       Original content

Weakness ·       Limited content library ·       Pricing

 

9.     How does Netflix’s competitive strength compare against that of 2–3 streaming rivals you deem most likely to challenge Netflix’s current leadership position as of mid-2020? Do a weighted competitive strength assessment using the methodology presented in Table 4.4 in Chapter 4 to support your answer. Based on your assessment and calculations, does Netflix have a net competitive advantage over some/all of these rivals?

Key success factor	Importance Weight	NETFLIX		DISNEY PLUS		HBO Max
Content Quality	0.30	9	2.7	5	1.5	7	2.1
Content Library	0.25	9	2.25	6	1.5	5	1.25
Original Series content	0.25	7	1.75	6	1.5	5	1.25
Pricing	0.20	8	1.6	5	1	3	0.6
Sum of importance weights	1
Overall Weighted strength			8.3		5.5		5.2

 

·       NETFLIX holds the most competitive net advantage of all other streaming platforms as of mid-2020’s era.

  10.  What 2–3 top priority issues do Netflix management need to address?

·       Content Expansion

·       International growth

·       Subscriber retention

11.  What recommendations would you make to Netflix CEO Reed Hastings?  At a minimum, your recommendations should cover what to do about each of the top priority issues identified in question 10.

·       Content Expansion: Continue investing in original content to maintain and attract more subscriber. Keep your subscribers intrigue and interested in your original story content.

·       International growth: Continue to expand into new international markets. Expanding will increase subscribers and revenue streams.

·       Subscriber retention: Regularly evaluate pricing strategies and consider adjusting bundle options to suit subscribers needs.

 

Thompson, A et al (2022) Crafting and Executing Strategy: The Quest for Competitive Advantage, Case Teaching Note pp, 505 -519.

 

 

Case 1 Airbnb in 2020 Case study analysis questions

 

 1.     How would you illustrate and compare the business models for Airbnb, large hotel chains such as Marriott and Hilton, and bed & breakfast operators? Use the example chart in the textbook for business models as a guide (Concepts & Connections 1.1)

ASPECT	AIRBNB	LARGE HOTELS	Bed & Breakfast
Value Proposition	Online platform Unique experience	Reliable and consistent Wide range of services	Cozy and homely atmosphere
Customer	More affordable	Diverse customer	Intimate experience
Key activities	Host acquisition, property listing	Reservation systems, property management and customer service	Provides breakfast
Key resources	Online platform and mobile app, social media	Global network	Personal touch, local knowledge and guest reviews
Regulatory considerations	Subject to local regulations	Compliance with hospitality standards and local regulations	Compliance with local zoning and licensing

 

2.     What was Airbnb’s response to the COVID-19 pandemic? Does it appear that the company’s business model is more resilient than that of its hotel chain rivals?

·       Refund and cancellations: Adjusted refunds for reservation policy from March 14 to end of June 2020

·       Cleaning Protocols: Establish cleaning and safety protocols and guidelines for its hosts.

·       Virtual Experience: Virtual guided tours of cities were offered for patrons to book and experience from their own home.

·       Long-term stays: Offers long-term stays targeting remote workers and digital nomads.

·       Superhost Relief fund: Airbnb established a 17-million-dollar Superhost Relief Fund to provide grants to eligible Superhosts who experienced financial difficulties due to COVID related cancellations. Superhosts are hosts who meet criteria and provide exceptional hospitality.

      As to whether Airbnb’s business model is more resilient than that of its hotel chain rivals, the COVID pandemic has impacted the travel and hospitality industries and has affected both businesses. Airbnb’s business model demonstrated some reliance due to its flexibility and ability to adapt to changing travellers’ preferences. Airbnb’s Diverse Inventory caters to different types of travellers, including those seeking secluded or remote properties during the pandemic. Airbnb’s flexible cancellation policies adjustment during the pandemic helped reassure travellers and thus encourage bookings.

3.     What are the general strengths and weaknesses of a) large, hotel chains such as Marriott and Hilton, b) bed & breakfasts, and c) Airbnb? Explain how you would compare and contrast those businesses.

	Strengths	Weaknesses
Large Hotel	·       Consistent ·       Global presence ·       Brand recognition ·       Amenities ·       Loyalty programs	·       Higher cost
Bed & Breakfast	·       Personalized service ·       Unique atmosphere ·       Local knowledge	·       Limited ·       Lack of consistency
Air BNB	·       Diverse Inventory ·       Flexible	·       Quality and consistency ·       Regulatory issues (in some countries) ·       Safety concerns ·       Cancellation policies

 

4.     In what ways has the lodging consumer changed, and how does Airbnb’s customer value proposition meet this change?

a.)   Uniqueness: Travelers seek unique experiences in their travels. Airbnb offers a wide range of locally hosted properties, including treehouses, houseboats, and historic homes.

b.)   Flexibility: Travelers seek personalized booking that tailors their holiday. Airbnb has a filter section on its website that targets specific criteria like location, price, property type, and amenities. Guests can also communicate directly with hosts and ask their questions now to the host.

c.)   Reviews and Recommendations: Most travellers based their bookings on peer reviews and recommendations before booking. Airbnb features user reviews and ratings for both hosts and properties. These reviews help travellers make informed choices.

d.)   Budget concerns: Economic uncertainty has made many travellers stingier in choosing their accommodations. Airbnb offers a wide range of price points, from budget-friendly to luxury accommodations.

e.)   Safety and Hygiene: Travelers are more conscious of safety and hygiene through the pandemic. Airbnb introduced enhanced cleaning protocols and COVID safety guidelines for hosts.

5.     What key factors may determine the success or failure of Airbnb?

a.)   Supply and Demand

b.)   Trust and Safety

c.)   User Experience

d.)   Competition

e.)   Regulatory Environment

6.     What recommendations would you make to Airbnb to improve its competitiveness in the accommodation market while mitigating any current and future risks?

·       Travel Packages: Airbnb should explore partnering with airlines and local tourist operators to offer bundled travel packages.

·       Environmental Responsibility: Encourage hosts to adopt an eco-friendly practice.

·       Innovation: Utilize Artificial Intelligence to enhance personalization, recommendation, and user interface, making it easier for guests to find the perfect accommodations.

·       Virtual Reality: Provide VR technology to allow users to explore the property before booking.

·       Loyalty Programs: Improve the loyalty program, offering more incentives, discounts, and benefits for frequent users.

 

Thompson, A. et al (2022) Crafting and Executing Strategy: The Quest for Competitive Advantage, Case Teaching Note pp, 307-317.

 

 

Case 22 Robin Hood case study analysis questions:

 1.     What problems does Robin Hood have? What issues need to be addressed?

·       PROBLEMS

                                      i.     Progress of his campaign:

                                    ii.     The sheriff’s growing power

                                  iii.     Increasing the size of the band

                                   iv.     Vigilance and Discipline

                                    v.     Food Capacity of the forest

                                   vi.     Taxation: Changing from “Rob the rich and give to the poor” to a Fixed Transit Tax

                                 vii.     Keeping the old ways or embracing the new ways

                               viii.     Joining the Baron’s proposition of collecting ransom to release King Richard which is dangerous in the eyes of Prince John

·       ISSUES NEED TO BE ADDRESSED

                                      i.     The growing population of merry men: The trust within new recruits needs to be established.

                                    ii.     Food supply.

                                  iii.     Sheriff’s growth in power and influence

                                   iv.     Affiliation to the Barons

                                    v.     Policy of taxation

2.     Do Robin Hood and the Merrymen need a new mission? new objectives? a new strategy?

·       Robin Hood and the Merrymen need a new strategy to keep up and be one step ahead of the Sheriff. Destabilizing the Sheriff should be the first step in order; to address the issue of the Sheriff’s increasing influence and rise in power.  

3.     What strategic options does Robin Hood have? Is continuing with the present strategy an option or is the present strategy obsolete?

·       The present strategy of stealing from the rich and giving it to the poor has becoming obsolete with the rise of power of the Sheriff. It needs to evolve to a certain extent. Expansion of territories should be the number one priority of Robin Hood and his merry men. Form allegiance to other outlaw groups or village folks who opposes the Sheriff’s authority.

4.     Why not try to end the campaign by killing the Sheriff?

·       Killing the Sheriff is just a temporary solution. Another dictator will just replace its stead and rule similarly as the sheriff or worse. Robin Hood’s reputation will further enrage Prince John and will make their life even more miserable.

5.     What are the pros and cons of accepting the offer of the barons to assist in securing King Richard’s release from prison?

·       PROS

                                      i.     Increased resources

                                    ii.     Political support from the Barons

                                  iii.     Help for the release of King Richard

·       CONS

                                      i.     Robin being an outlaw and the Barons being noble are not similar in interests and goals. Robin may be betrayed eventually by the Barons.

6.     What action plan would you recommend to Robin?

·       Expand his operations and establish allies.

·       Outsmart the Sheriff

7.     How should Robin implement the recommended plan? What action steps will need to be taken to make the recommended strategy work successfully?

·       Consult with his most trusted allies and discuss new missions and objectives.

·       Develop clear communication and rally support from local communities and allies.

·       Continue gaining support from local communities.

                                      i.     The implementation should be precise but in steps, with emphasis on building sustainable goals.

 

Thompson, A et al (2022) Crafting and Executing Strategy: The Quest for Competitive Advantage, Case Teaching Note pp, 715 – 725.

 

Discussion 10A: Discuss the practical steps for using Lewin’s Process Model

 For Unfreeze, Change, Refreeze, identify the steps and actions you would take under each stage.

Unfreeze

Prepares the organisation to accept the change, which involves breaking down the existing status quo before you can build up a new way of operating. Usually, the most difficult and stressful part of change. The unfreeze stage involves a spark and the idea to change the current condition. It may come from a single individual, but it must be properly disseminated to the group. (Edwards, K., Prætorius, T., & Nielsen, A. P., 2020).

·       Creates a sense of urgency: Communicate the need for change and the reasons behind it to generate awareness and a sense of urgency among stakeholders

·       Building a guiding coalition: assemble a team of influential individuals who can support and lead the change effort

·       Communicate the vision: clearly articulate the existing procedures, systems, and culture to identify areas that need improvement

·       Address resistance: Anticipate and address potential resistance by involving key stakeholders, addressing concerns, and creating a supporting environment

Change

The change stage is where people initiate to determine their ambiguity and look for new ways to do things. This process does not work overnight; people take time to accept the new norms and participate actively in the change. To do this, people need to adapt to how it will be beneficial to them. Not everyone will be on board, time and communication are the keys for these changes to happen and they need to feel connected to the organisation for these transition periods.

It is important that you communicate clearly and often throughout the planning and implementation of the changes. Also, make sure that you stay ahead of and dispel any rumours.

The purpose of the change process is to discard old behaviour, adapt new behaviour, and move the organisation forward. (Edwards, K., Prætorius, T., & Nielsen, A. P., 2020).

·       Develop a detailed change plan: outline the specific steps, resources, and timelines required to implement the changes effectively

·       Provide resources and support: ensure that the necessary tools, training, and support systems are available to enable employees to adapt to the changes

·       Empower employees: encourage employees to participate in the change process, solicit their input, and involve them in decision-making whenever possible

·       Implement the changes: roll out the planned changes while closely monitoring progress and addressing any issues that arise

·       Communicate progress: regularly update stakeholders on the progress of the change effort, celebrate successes, and address any concerns or setbacks

 Refreeze

When the changes are taking shape and the employees have embraced the change, the administration is ready to refreeze. The outward signs of the refreeze are a steady organisation chart, consistent job descriptions, and so on.

Refreeze involves the planned selection of a better alternative to the current state. Refreeze is the shared decision to apply a result that must be done in a meeting such as in the workshops where most of the employees are present. (Edwards, K., Prætorius, T., & Nielsen, A. P., 2020).

The refreeze stage also needs to help people and the organisation to internalize or institutionalise the changes. Employees feel secure and relaxed with the new ways of working. Even though change is constant in many organisations, this refreezing stage is still important. Without it, the workforce gets caught in a shift trap where they aren’t sure how things should be done, so nothing ever gets done to full function.  

·       Reinforce new behaviours: Embed the desired changes into the organisation’s culture, systems, and processes by rewarding and recognizing employees who embrace and demonstrate the new behaviours

·       Provide ongoing support: Offer continued training, coaching, and resources to help employees consolidate their understanding and skills related to the changes

·       Evaluate and adjust: Assess the effectiveness of the changes and make any necessary adjustments based on feedback and results

·       Institutionalise the changes: integrate the new processes, systems, and behaviours into the organisation’s policies, procedures, and performance management systems

·       Celebrate success: Recognize and celebrate milestones and achievements to reinforce the positive impact of the changes and maintain momentum

Reference

Lewin's Change Management Model - Understanding the Three Stages of Change (mindtools.com)

Edwards, K., Prætorius, T., & Nielsen, A. P. (2020). A Model of Cascading Change: Orchestrating Planned and Emergent Change to Ensure Employee Participation. Journal of Change Management, 20(4), 342–368. https://doi.org/10.1080/14697017.2020.1755341