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MNG3702 ASSIGNMENT 2 SEMESTER 2 2023 FRAMEWORK
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MNG3702 ASSIGNMENT 2 NETFLIX CASE STUDY SEMESTER 2 2023 FRAMEWORK
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Question 1
1.1. The first principle of strategy implementation is to translate the strategy of a
business to operational terms. One tool that can be used for this purpose is a strategic
map. Draw a strategic map for Netflix for 1998 when the company changed its pay-for-
use model into a subscription model which offered a subscription service through the
internet. In your answer, you need to make use of the elements of the Balanced
Scorecard (BSC). (8 marks, of which 1 mark will be awarded for each element of the
BSC and 1 mark for a relevant application of the elements of the Balanced Scorecard to
the case in a strategic map)
In 1998, Netflix changed its systems from pay-to-use model to subscription model that allows
customers to stream through the internet. The following is a diagram for the Netflix map:
Financial perspective
business Strategic Learning
and growth
perspective
direction perspective
customer
perspective
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a) Financial Perspective
This is an idea of increasing organisational revenue base. By implementing a subscription
model through the internet, Netflix hoped to enhance its revenue sources. By growing
subscribers and lowering expenses for DVD rental outlets, the company hoped to achieve
financial sustainability and growth.
b) Learning and Growth Netflix sought to constantly develop its technology and innovation
capabilities in order to stay ahead of competitors and meet evolving customer needs. The
company intended to spend in R&D for its recommendation algorithm and online streaming
services, as well as to cultivate a learning and adaptation culture among its staff.
c) Customer Perspective Netflix wanted to give its users with a convenient and economical
movie rental service. By providing unlimited rentals with no late fees and a user-friendly
interface, the company hoped to boost consumer happiness and loyalty.
d) Internal Business Perspective Netflix wanted to increase operational efficiency and
effectiveness by streamlining the ordering and delivery of DVDs using prepaid postal
envelopes. The company intended to eliminate order and return faults and delays, as well as
optimise its logistics and inventory management.
In summary, Netflix's strategic map created with the BSC in 1998 demonstrates how the
company translated its strategy into operational terms by focusing on key performance
indicators (KPIs) for financial sustainability and growth, customer satisfaction and loyalty,
operational efficiency and effectiveness, and technology and innovation capabilities.
1.2 Change is a fundamental strategy implementation element. Identify an example of
evolutionary change at Netflix. Substantiate your answer. (2 marks, of which 1 mark
will be awarded for a correct example and 1 mark for the correct substantiation)
An example of evolutionary change at Netflix is the company's expansion into original
content production. While Netflix initially relied on licensing third-party content for its
streaming service, it gradually began producing its own original TV shows and movies
starting with House of Cards in 2013. This was a strategic shift that allowed Netflix to
differentiate itself from competitors and create a unique offering for its subscribers. This
evolution from a content aggregator to a content producer has been incremental, as Netflix
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