Challenges Faced by Netflix
One of the biggest entertainment companies in the world, Netflix specializes in the distribution and streaming of movies. The business has difficulties given the characteristics of the entertainment sector.
The majority of the company's issues are related to the fierce industry competition. The first problem Netflix has is competition from businesses that continue to innovate more quickly. This implies that new items can be introduced to the market by other companies before Netflix does.
Accessing the market for on-demand services is a second obstacle. The issue is that other companies adopted different operational approaches before Netflix did.
The third challenge is maintaining a loyal customer base in the face of the stiff competition. The fourth challenge is maintaining a good reputation among its customers.
Complexity of Competition in Modes of Operation
Of the challenges facing the Netflix, the most complicated problem that may not be easier for combating competition emanating from the change in modes of operations by other organizations. According to Palthe (2014), change in an organization may be a complicated process due to the embeddedness of its activities to the existing institutional context.
The easiest problem to take care of in the Netflix case is protecting the company reputation. All that is required of the company is to desist from any exploitative venture and unethical tendencies in the course of doing business. Such instances may taint the picture of the company and derail its reputation.
Connection to Organizational Worldwide Trends
The problems faced by Netflix reflect multiple globalization trends, especially in the entertainment industry. Globalization has widened the market for companies such as Netflix. At the same time, the concept necessitates firms to introduce diversified products to meet the expectation of the customers in different parts of the globe (Qiu, 2014). Therefore, the challenge of developing new products ahead of the competitors relates to globalization.
Concurrently, the change in the operations of the mode of business of the organization as a strategy is linked to the increasingly diversified customer base who have different needs and preferences.
Problems of maintaining customer loyalty are attributed not only to globalization but also a diversified customer base. In particular, the customers require different approaches to ensure they do not withdraw their subscriptions to the company services. The problem of safeguarding the reputation conforms to trends in ethics. According to Watson (2007), all organizations value their reputation. In the contemporary world, engaging in unethical behaviors have the potential to adversely affect not only the performance but also the survival of an organization in a given market. Therefore, Netflix's problem of safeguarding its reputation relates to ethical trends.
How Netflix Can Turn Challenges into Opportunities
The challenge that Netflix can turn into an opportunity is that of staying ahead of other organizations in terms of product innovation. The capability of a firm to consistently innovate new products based on the need of the customers play a crucial role in improving financial performance and competitiveness in a particular industry (Ajimati, 2012). Netflix, being alive to this fact, can position itself as the leader in innovative products that meet the unique needs of the customers. Through this, the company will be able to maintain growth in the industry due to the increase in revenue from the introduced products.
References
Ajimati, M. O. (2012). The Significance of Integrating Product Innovation in Increasing Business Competition.. Theseus.fi. Retrieved from https://theseus.fi/bitstream/handle/10024/44114/Ajimati_Matthew_Oladeji.pdf?sequence=1
Palthe, J. (2014). Regulative, normative, and cognitive elements of organizations: Implications for managing change. Management and organizational studies, 1(2), 59.
Qiu, T. (2014). Product diversification and market value of large international firms: A macroenvironmental perspective. Journal of International Marketing, 22(4), 86-107.
Watson, T. (2007). Reputation and ethical behaviour in a crisis: predicting survival. Journal of Communication Management, 11(4), 371-384.
