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Netflix Strategic Failure and Rebirth

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Netflix Strategic Failure and Rebirth Netflix was originally developed as a movie rental company that delivered movies and full seasons of television series directly to the front door of their customers. As the company began to grow and expand they developed the direct stream method, both over the internet and to several of the most popular game systems on the market. With this new philosophy the company began to grow and develop at an exponential rate, increasing shares on the stock market and becoming “the name” in movie streaming and delivery; all the while putting long standing companies such as Blockbuster and Hollywood Video out of business. As the company continued to grow problems began to arise. “Netflix exemplifies a success story going bad because of both external factors related to "creative destruction" stemming from technological change and competition, and internal factors that are related to strategic misalignment of business models and a failure to put customers' needs first (Agarwal and Echambadi, 2011).” With growth and expansion into video streaming the company suddenly was using two separate business models for one company and this began to have an effect on the products and services with which they were offering to their customers. “A lack of customer-centricity was evident in Netflix's brusque initial communication about price hikes. The message had to be softer, especially in these times of economic distress, (Agarwal and Echambadi, 2011)” which were overwhelming the country. Customers did not appreciate the price hike to continue to view streaming videos when that side of the company was what many customers had initially subscribed to in the first place. (Agarwal and Echambadi, 2011; “Netflix”, 2013) Netflix at this point was two separate companies operating under the umbrella and reputation that the company had built based on…...

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