Change Management and Development in Netflix

Srujana Sourava, Lalatendu Kesari Jena and Biranchi Narayan P. Panda

“The only constant in life is change”, . There were two, guys barrelling on Highway 17, the
California, connecting roadway, Santa Cruz to Silicon Valley, trying to think up with this first
big thing, streaming wars and 'Netflix and Relax,' long before binge-watching. The first was
Marc Randolph, a marketing professional and businessman who co-founded 'Integrity QA,' a
personalised dog food start-up, personalized baseball bats, personalized shampoo, all distributed
and sent through the internet via mail. Netflix began after facing Mr. Hastings, a steep late
charge, it appears, is anecdotal for an overdue lease of 'Apollo 13. The idea for Netflix did not
emerge in a moment of celestial motivation, but rather stemmed from a quest for the next act.
Messrs. Randolph and Hastings started to work together at Pure Atria in early 1997, a software
firm in Silicon Valley owned by Mr. Hastings, who was executing a merger at the time which
was about to make both of them obsolete.

Netflix, Inc.
Netflix is a colossal media service, created in 1997 by Marc Randolph and Reed Hastings in
California, USA, The company has a huge remark in the field of media and entertainment
industry. The firm announced that there were over 130 million paying subscribers from 190
countries in January 2019 . The inaugural business strategy of Netflix was renting and selling of
the DVDs through mail. The company eventually switched to the rental DVD market. In the
year 2007, alongside, its current business, the company launched, media streaming over the
internet for the first time. The first international expansion was seen in 2010 when company, first
ventured Canada. It also operates in media-controlled countries such as China, where it has
signed, an agreement for Baidu-owned ‘iQiYi’ service for initial Netflix content streaming .
In the year 2011, the year Netflix was just about to collapse. A management team was in a
leadership group during the time of chaos. Stock prices dropped by, 80% and, most critically,
stock prices fell by 80 percent business lost almost 800,000 clients within a year. The question is
what resulted the loss here? A conclusion was made by the management to split their $10 into
two separate planes in one bundle, costing 8 dollars each. This 60% price increase has, not been
accepted by Netflix’s user base. With the passage of time, Netflix rental DVD services like
‘Qwikster’' and further changes to ‘DVD.com’ There are two distinct types of business, rental
and streaming services, according to Netflix, with each business having a different pricing
structure, potential for demand, and growth. Netflix's entire business model was focused on
subscriptions, but the company violated a single law that respected the consumers associated
with that business model. They breached the faith of viewers when Netflix decided to split its
customers between online streamers and DVD watchers.
As a response, the management thought that the two services needed different marketing
strategies and pricing models. During the declaration, it was specifically stated that this proposal
would begin to apply to new subscribers immediately after one month without affecting the
existing subscribers. The company reversed its decision, however, by dissolving Qwikster so that
both services were provided by the very same old single company. (Tuzhilin , & Koren 2008).
In addition to splitting the company, Netflix changed its pricing model, preserving the old one
that allowed customers to pay a $7.99 subscription service for complete access to the streaming
and DVDs. They split the updated pricing plan's DVD and streaming provisions, where
customers were required to pay $ 7.99 for all those services. (Vickers, A & Fearn 2010). This
meant that at $7.99 or both at $15.98, the client could either opt to subscribe to one of the
services. The initiative was implemented in the midst of sustained criticism alleging that because
the company had limited stock, access to DVDs was not sufficient. According to industry
analysts in the USA, the company was faced with a scarcity of DVD supplies due to the higher
licencing fee charges paid by DVD holders to sell their material.

Growth trajectory of Netflix

Netflix had a tough decision to make when viewers lost confidence in the company. To continue
to the current approach and anticipate consumers to finally recognise their business model or
respond to the demands of customers. Netflix prefers to mention the criteria of its customers. It
was an initiation of the economy of subscription. All time accessibility, by clients, was needed.
Better internet access has increased significantly globally, and this access has dramatically
changed consumption habits. Some examples like we use Spotify for listening songs, crunchy
roll for Anime etc.
Viewers were starting to go for convenience, and it was offered to them by Netflix. The company
began offering content, based on social media reviews from users, geolocation data, and viewing
habits with additional simple forward, rewind, and pause functionality. Netflix is recognised
today as a phenomenal industry innovator, but it would not be unfair to state that in 2011 it
almost forgot about its own viewers. Netflix’s have forgotten that customer relationships are a
two-way path. They were, finally, able to get the wake-up call they needed when they were able
to realise their mistake, and that contributed to the success of today. It launched with an user
base of 24 million static customers, but presently it owns almost 66 million customer relationship
that pay attention to. This can be explained as a major turnaround storey, focused on to give what
the customers value.
Netflix knew they had to look at the idea and not the source. They decided, on their own merits,
to judge their ideas better. From traditional wisdom, Netflix eventually realised that its viewers
didn't want to reveal all the films they had seen. Netflix understood that this detail of history was
something the clients did not want to make public.
Fig 1.1 the image below will show the views for Netflix for desktop, personal computer,
mobile tablet

Source: https://timelines.issarice.com/wiki/Timeline_of_Netflix
Success Milestone of Netflix

Development from 1990-2000 Development from 2001-2010 Development from 2011-2020

• 1997-Netflix was founded, during this • 2001- Netflix began a relationship with
time blockbuster use to dominate Best Buy with network advertising • 2017-Netflix climbed century million
entertainment rental. viewers
• 2002- The company was making it
• 1998-Netflix .com started and, company public and its name has been changed to
started offering DVD rental and sales Netflix, Inc. • 2018- Netflix invests 12 billion dollars
producing its collection of original
movies and television that are
• 1999- Started its online subscription • 2003- Attains yet has the initial
nominated for 112 Emmy Awards.
successful share among 1 million
Each, year the company produces over
viewers
700 iterations of Movies and tv shows.
• 2005- It receives 1,000,000 DVDs sent • 2019-Growth reaches 190 countries.
by mail every other day and offers more
than 35,000 movies. Focused on the
viewing patterns and reviews, the • 2020-Netflix has a 26.6 percent market
organization is starting to create share of online streaming demand
suggestions for audiences. worldwide as of February.180 million
members. The user base of Netflix
bursts and throughout COVID-19
• 2006- It would be even more financially disease outbreak lockdowns as a
viable by generating more than consequence of stay-at-home
Approximately usd80 million each year. instructions

• 2010-It launches a broadcasting

package that allows free streaming, and
no DVDs. By selling the streaming
platform in Canada, the business then
extends far beyond United States.

Initial Challenges
Netflix has been on failure tyre for numerous numbers of times and there are two major reasons
for the failure of Netflix -:
1. Strategy Failure: - Netflix worked really hard to create and develop the future strategy.
2. Management & Leadership Failure: - The leadership had several prejudices that
overshadowed their decision as human beings.
Netflix had released its own group strategy called ‘Friends back’ in 2004. Netflix claimed
that they would be able to create their own network impact by using friends from which
friends could suggest long-tail movies to each other.
How could Netflix have endured for so long ?
The Chief executive officer of Netflix offered immense support for the initiatives that led to the
continuity of customer engagement. Netflix's goal to entertain consumers in challenging and
differential ways helped to make social strategy more meaningful. In ventures, SAP management
appeared to have seen the positive and ignore the negative because they assumed that optimism
involves product management. Netflix was under the assumption that notion of regression was
not in importation One such instance is that an explicit plug approval in the United States was
required by the video privacy protection law to share credit record with others. This was an issue,
as Netflix representatives were not prepared to share the details. Netflix was pre-occupied by
these problems of the true assessment of community plan itself , a minimal performance
contradiction. Netflix had different, compact features and 2 percent of users used each feature,
but those using it were incredibly enthusiastic about it. This was a challenge since the new
viewed stepping to the Netflix streaming services were overwhelmed by too many features.

How have the obstacles been acknowledged ?

Netflix understood that the theory, but not the root had to be looked at. On their own merits,
they decided to test their proposals better. Netflix finally discovered from traditional wisdom that
its clients did not want to show all the films they had seen. Netflix understood that this detail on
history was something that consumers did not want to make public. Setting clear goals. There
was no timeline, for Netflix to follow to conquer particular goal. It was ultimately altered while
the management's judgement was clouded by no timeline. Taking the blinders, the leadership of
Netflix, was more likely to concentrate more on the objective. In this phase, they often lost sight
of coming modifications, which would have forced them to upgrade the impetus.
Netflix Inc. has always correctly destroyed the unsuccessful strategies, the customers are deeply
aware of the upcoming intervention all l well in advance. Processes for a clean slate. Whenever a
Netflix feature is destroyed, it is deleted from the server. The decision to build a simple interface
that included a detailed sunset of previous work. Netflix has made many errors in the course of
business. It decided to make long-term investments on the premise that entertaining space would
yield shareholder and consumer value. By practising skilful leadership and product management,
all these obstacles were overcome. In order to shape theories that can help them make their
goods better, Netflix is now researching market science that analyses current data, analysis and
surveys.

Brand Building Strategies and Innovative Business Models

The different steps used in the models of transition do not, take place entirely in real-life
scenarios. In several cases, the change agents overlook several steps or take quite few phases at
the very same time to make it harder to discern the distinctive stages.

Lewins 3 Step Model

The model proposed by Lewins explains a transition in three different steps, which include
freezing, unfreezing and moving Following the challenges Netflix has encountered in an attempt
to enforce pricing policies in line with the expense of the Internet and the licencing fee, the
company implemented techniques that envisage the Lewins Three Stage Model.
Firstly, with only one pricing strategy, the CEO expressed customer dissatisfaction. He stated
that, taking into consideration demands of the clients, all customers are not satisfied with one
pricing structure. In essence, to brace clients for transition, this was a technique of unfreezing the
current price schedule. Second, the organisation shared their intention to adopt the proposed
model. This means that the organisation is ready to make the move. They have not, however,
completed the last step of freezing down to sanity.

The Transitional process

In the attempt by Netflix to introduce three price package tiers, there are numerous aspects of the
adjustment process that have been shown. There are three phases that have been represented in
relation to the change phase, including anxiety, fear and danger. In this case, it should be noted
that the firm is in the midst of introducing a new pricing plan, but has not enforced it at this
moment. When CEO declared their decision to change prices in January 2014, the customer
expressed stress and paranoia that the plan could escalate to a scenario like the one experienced
in 2011. Furthermore, investors have challenged the change because they seem to have no
confidence in Reed Hastings' ability to effectively introduce the change.

Kotter's 8 step model

It is obvious, that the organisation has already adopted the first step of this model with respect to
Kotter's eight stages. In the situation, the chief executive officer has effectively persuaded the
viewers about the benefit of working on adjustments in the rate schedule. Hastings said that one
price was not appropriate and common for all consumers when he revealed the company's intent
to implement the initiative. This statement aims to attract consumer interest as it portrays the
devotion of the business to their welfare. In addition, with regard to building a powerful alliance,
the CEO has shown vigilance. In this situation, contrary to what he had done in 2011, when one
of the executives, had openly criticised the decision, he involved his co-founders in making this
decision. Additionally, with the support of his coalition partners, he has developed a clear vision.
In effect, this implies that they have adopted the third phase of the Kotter model. In terms of
growth, the CEO and his co-founders have accomplished the fourth step of this model by
transmitting their vision to shareholders and clients.
They aim to implement a pricing plan, according to their study, that contributes to all users in
compliance with their preferences and financial capabilities. Therefore, the company has
launched the beginning 4 steps of the Kotter's-8-step model.

Netflix's leadership and organizational administration

Reed Hastings, CEO of Netflix, who once said if you'd like to create a ship, you don't have to
whip up people to gather wood, divide the work, and issue commands. Instead of teaching them
to strive for the vast and infinite sea, they should do the trick. To retain its business traction,
Netflix has been a market pioneer not only on the exterior, but also on the interior. It is
understood that Netflix employs staff, who promote autonomous decision-making. This is done
by making sure that the workers exchange detailed information with one another freely, and be
informal and Frank with one another. Netflix prohibits enforcing any protocols on its employees
also recognises only top efficient individuals. The basic ideology is to hold every individual in
the loop.
The organisational management of Netflix work with certain following values-:

Fig 1.2 Netflix organisational values

Communication

Judgement

Innovation

Passion

Selflessness

Curiosity

Inclusion

Using available data, they derive strategic decisions based on broad strategies, but not relatively
close strategies. The organisation emphasizes in connectivity, and staff understand the
circumstances before responding. Netflix strives to deliver honest and timely feedback to
employees. Employees are searching for whatever is best for Netflix instead of what is best for
them. Netflix supports all project teams to work together, even though they come from diverse
cultural backgrounds. Project teams from Netflix are recognized for their honesty, candidness
and non-politicality. They accept their faults and work through all their inconsistencies. Through
their work, Netflix consistently demonstrates good success as they realise the relationship
between the company and employees is interrelated, and performance is focused on their
sustainability in this competitive environment.
There are no bell curves or rankings for Netflix leaders that set some targets to reduce 10 percent
per year. Through the use of a keeper test, Netflix leadership drives its leadership for each of
those people. Netflix is also trying to retain employees who want to leave the company. All of
those workers, among them who do not qualify the keeper test are politically compensated with a
breach package and are informed to quit. Curiosity is generated by Netflix among its staff to
contribute beyond their area of expertise. Alternate viewpoints are represented by them. The
company strives to introduce creativity to its entire range of products by introducing fresh
innovations and customer experience models. The business encourages the employee's appetite
for quality, and they strive for the success of Netflix in exchange. With their job, Netflix shows
the relationship between the company and workers is interdependent and their survival in this is
consistently high output as they understand. Performance is the basis of a competitive market. It
builds a stronger ideal group to the organisation. Many those are kept are on the leverage of a
career lifespan. It also guarantees that the team which works in a bunch are constantly working
to show better results.

Core ability, Network and Improvement in Alliance

Netflix has begun to respond to its staff and clients. In order of these, the core competencies,
relationships and the way staff are supposed to work have changed a lot. Some changes are-:
a- Implementation of accountability and freedom-: In several workplaces, the workers
tend to carry out just certain tasks that are part of their reach, and there are businesses
where staff takes care of everything like they would, at home. Netflix had already
probably got away with what is not the culture of my work. The project teams will ideally
do what is best for the organisation. It generates consciousness, and the responsibility that
drives the organisation to do the excellent work of the business. Netflix has moved itself
away from the unhealthy focus on the method, making flexibility for development a
choice. They are trying to build an environment where staff enjoys being there for
handsome salary and opportunities.

b- Informed Leaders-: Similarly, Netflix now wants its leaders to make informed choices,
just like a ship has a master who is responsible for the whole ship. The larger its decision,
as per the company, the more the assent set needs to be. Netflix accepts the risk and
sticks to it before a decision for the ship is made by the captain.
 c- Perspective over direction-: Netflix now wants its team members to draw actions and
independently approach executives only if they're not sure about something. Netflix
expects that the right interpretation will make the best decisions. Netflix's management
role is to teach, interpret information, and be highly aware about what's happening. The
teaching about how to change meaning so that more choices can be made. The
demonstration on how to modify context in order to make further decisions. Netflix is not
driving its staff and executives to satisfy their hearts, but to help to strengthen company
successful. It is okay to have differences, but what is anticipated of them is to have an
assessment justification.

d- Strongly Compatible but Linked Loosely-: Netflix is now investing a great deal of time
debating tactics. The members of the company trust each other, to carry out decisions
without prior approval. The organisation has seen many times when two project teams
work together on a common feature, but they take a candid decision, when something
doesn't feel right. The success of this setting is. It relied on high-performance individuals,
working together to expand the organisation for a greater impact. All this while
increasing versatility and agility.

Netflix during the Covid 19

Nearly 16 million individuals created accounts in the first three months of the year, nearly double
the new symbol seen in the final months of 2019. Nevertheless, the streaming platform, that is
supplying several mega dollar films, said layoffs have stopped "almost all" shooting worldwide.
During last quarter, sales,earnings per share (EPS) came in at $6.15 billion and $1.59
respectively, exceeding analyst estimates of, $6.08 billion in revenue, while missing EPS
forecasts pitched at $1.83. But, subscription growth is what matters most to the market, and
investors have been left worrying about poor guidance. By the end of September, the company
said, it plans to add 2.5 million subscribers, which would represent the lowest level of growth
since 2016. The news spooked investors and sparked a 6.5 percent correction to $492.99 in the
share price. For Netflix, a continuation of lockout restrictions, in the midst of localised flare-ups
will be beneficial, serving as a trigger for more individuals to try their service. There is also,
however, the possibility of new customers, cancelling their plans once life returns to normal,
indicating that Netflix may have a big problem with customer churn going into 2021.
Fig 1.4 The figure above shows the growth of Netflix during Covid 19

Conclusion
The firm organizational mission is to "To amuse the globe." This pragmatic concept reflects the
spirit of the organisation when offering on-demand movie streaming packages Just like concept
plan this strategy objective stresses entertainment market tactics, as the organisation relies
heavily on satisfying the desires and preferences of customers for access to media.The first point
of the corporate mission, statement by Netflix shows the company's entertainment industry
existence. This market group, however, broadly comprises films, shows, performance art, stage
plays, and others. Thus, in specifying Netflix's operations, this point of the mission statement
may be too broad, although it suggests possible strategic plans to diversify the company.
The corporation strategy of Netflix is "To strive to become among the online entertainment era's
leading companies." This statement of vision, combined with the organizational structure reflects
the company's strategic goal about staying at the pinnacle of the industry amid major adversaries.
It is interesting that Netflix states in some of its official documents that it work to "keep leading
by offering an amazing entertainment experience." Given these statistics, the business strategy
statement of Netflix pursue certain points pursuing pioneer ship, web and Enter-tainment.
Figure 1.5 above will show the international expansion of netflix

Sources: Statista 2020

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Author biography

Ms. Srujana Sourava, pursuing her BBA LLB (Hons.) at Xavier Law School, Xavier University
Bhubaneswar, India. She had a keen interest on pursuing career on corporate law.
She aspires to pursue a MBA in Human Resources area in the future.She has been associated as
an author of a case entitled “change management and development in Netflix”

Dr.Lalatendu Kesari Jena, Assistant Professor (OB & HRM), School of Human Resource
Management, Xavier University Bhubaneswar, India
Dr. Biranchi Narayan P Panda, Assistant Professor (Law), Xavier Law School, Xavier University
Bhubaneswar, India
 TEACHING NOTE
Change Management and Development in Netflix
Srujana Sourava, Dr. L. K. Jena and Dr. B. N. P. Panda

Synopsis
This research study is the gist of the Netflix premium video streaming platform's greatest
turnaround. It covers the restructuring plot, preceded by the hurdles of the company. The
management and organisational improvements followed by the areas of expertise, networks and
collaborative changes are then explored. As a group, Netflix has just begun its trajectory and has
set a strong path ahead of it in the subscription online streaming arena.

Value Words
Change management, organizational management, partnership change, Cross-cultural, Covid 19

Suggested Audience
The analysis of the case study is more suited for undergraduate & postgraduate students in
general and specially for the management students. The case is also very helpful to executive
management trainees and students of chain management and strategy management and law
students studying management subjects. The concept present here relate to courses that focus
around leadership, entrepreneurship, strategy management, chain management and international
business management. This may also be taken up by budding aspiring entrepreneurs and leaders
to understand challenges and adversity and how to tackle it.

Learning Objectives
This case shows the absolute committed and enthusiastic journey from scratch of an
entrepreneurial enterprise. It illustrates how the expansion of an entrepreneurial venture into the
global market presents challenges at different levels, including leadership, brand building
strategies, competitiveness, investor-business relations, cross-cultural problems, and cut-throat
rivalry, but not limited to them. By the end of the session, the learners should be able to
understand:
 Different aspects of leadership that are important to examine and comprehend
 Understand and appreciate how cross-cultural sensitivity plays a vital role in promoting a
culture of innovation and creativity within a growing start-up.
 Explore different brand building strategies during an entrepreneurial venture's organic
and inorganic growth and also gain investment.

Assignment Questions
 How could Netflix have endured for so long ?
 What were the mistakes made my CEO Hastings and how did it got tackled
 What are Netflix business building strategies?
 With what all values does Netflix organisational management work?
 What are the challenges faced by Netflix?
 What all changes in Netflix during covid 19 pandemic lockdown?

Theory

To address the first and last instructional target, it will be concentrated on different principles of
change management and strategy development. To address the two core learning goals, change
managerial strategies may be used. A rich setting in which to examine this case will be given by
combining the three sets of theories.

U- form strategy model

The comprehensive organization where the U represents for centralized, because there is exactly
one entity with a large, multipurpose marketing standpoint in this organization. While this
paradigm facilitated unification and continuity, it prevented businesses from increasing and
extending into some other sectors.

Netflix has a U-form or centralized organizational framework which has a succession within the
enterprise to retain administrative control and focus. However, as opposed to several
organizations which have a patriarchal organisational framework, this organizational process is
comparatively flat. For starters, all of the key business executives report directly to the Executive
in Netflix's organisational map. This organisational functional layout decreases the level of
management necessary to intensify problems from the lower part of the online business to its
organisational hubs. The following are the core aspects of the organisational framework of
Netflix:

 Functional or structural community for operation online.

 Geographical branches for territorial markets management.
 Categories for different product categories and types of operations.

Innovators Dilemma

Firms are struggling to respond to developments and business change when they confront an
unattractive option, as per The Innovator's Dilemma. They either welcome the change,
compromising large profitability, maybe they do not develop, and lose revenue and importance
steadily.

Even so, undoubtedly better than any another organization, whenever it gets to transformation,
Netflix was courageous, particularly of its own designs. Hastings realised that Dvd players were
a nascent technology, back in those days when Netflix was a tenacious DVD mailer attempting
to smash Blockbuster, and also that the organization had to strive to become the streaming king.
Then from, the organization acknowledged that it was indeed a weakness to licencing content
from conventional broadcast rivals and pushed into innovative programming eventually
integrating internally so as to guarantee its very own content origin. That proved to be the correct
choice, too.

Application of rapid innovation

The method of improvement of new thinking process and problem solving through design is
named as rapid innovation. In this the most important thing is to see the connection between all
the problems. Obviously not all the problems are to be tackled one by one. Only the critical
nodes are to be addressing the issue holistically. They were shown the unity of opposites to take
the creative middle. Minimal invasion or change based on the principle that the small change
creates the desired change in system
Netflix knew they had to look at the idea and not the source. On their own merits, they decided
to test their proposals better. Netflix finally discovered from traditional wisdom that its clients
did not want to show all the films they had seen. Netflix pointed out the problem that customers
are seem to be neglected and they connected all the problems and found that conventional
wisdom.
Teaching Plan
The students need to be asked to go through the case thoroughly before continuing with the
lecture. An added bonus will be additional readings on the subjects of entrepreneurship,
leadership styles in the modern era of leadership, organisational creativity culture. Awareness of
the following subjects would also assist students to have a constructive discussion:
 Leadership and organizational values
 Inclusion of responsibility and changes
 Types of Leadership
 Technological and change management
 Clean slate process
 Business building strategies
 Lewis 3 step model
 Kotter’s 8 step model

Pedagogy
It is important to teach this case study in the following way.

 Case Discussion
A single 90-minute session can be split into 75 minutes for case discussion and 15
minutes for learning and closing summaries.

This case is intended to be taught with a minimum requirement of 90 minutes, but

according to time availability, instructors may extend these sections.

 Group Discussion
It is possible to break the class into groups of 5 to 6 group. For group discussion, each
group will be allocated a time slot of 8 minutes and the next 5 minutes for questions and
answers from the audience as well as the facilitator. The group will concentrate on the
key concepts in the case during the initial round of the group discussion and then attempt
to reach a solution to the problems faced. The divide the class into four teams, each team
representing one of the following groups: leadership, brand building strategies,
competitiveness, investor-business relations, cross-cultural problems, and cut-throat
rivalry

 Class Discussion
The facilitator plays a pivotal role for the participants in the case study in dispersing
learning. He/she brings forth interesting suggestions relevant to the case and then invites
the class to dig deeper into the different aspects of the case.
  Assessment
By preparing a case overview, highlighting the main principles, referencing hypotheses
anywhere they can be linked, stating and discussing the dilemmas posed in the case, and
ultimately proposing solutions to the case, participants are asked to prepare a study.
Wherever possible, the article must cite references.

 Questions and Abbreviated Responses on Case Analysis

Based on the deeply reading on the case, certain major points come out of case. After a
detailed analysis of the case, we see that despite many adversity or challenges, Netflix
change management is a comprehensive case, which taught several change management
and organizational management structure and strategies. The major implications, of the
Lewis 3 step model and Kotter’s 8 models. It also enlightens us with the core values that
Netflix carry like integrity, excellence, curiosity and most importantly collaboration.
Application of rapid innovation and resistance to the change is the major virtues. And
many other pointers which came out are as follows-:

(a) Application of rapid innovation

The method of improvement of new thinking process and problem solving through design
is named as rapid innovation. In this the most important thing is to see the connection
between all the problems. Obviously not all the problems are to be tackled one by one.
Only the critical nodes are to be addressing the issue holistically. They were shown the
unity of opposites to take the creative middle. Minimal invasion or change based on the
principle that the small change creates the desired change in system.
Netflix knew they had to look at the idea and not the source. On their own merits, they
decided to test their proposals better. Netflix finally discovered from traditional wisdom
that its clients did not want to show all the films they had seen. Netflix pointed out the
problem that customers are seem to be neglected and they connected all the problems and
found that conventional wisdom ,

(b) Lewin change management structure

A three-step model of transition was developed by Kurt Lewin: unfreezing, changing, and
refreezing. For interpreting the phase of transformation, the prototype is a very simple and
practical model. For Lewin, the type of transformation includes designing the perception that a
transition is needed, then progressing toward the updated, desired level of conduct, and
ultimately improving the norm of that given pattern. The change process in organizational
environments
How the situation could confront to ascertain effectual changes.
Lewin indicated that the behaviours of every person in response to a current proposal are a
function of group activity. The member's conduct and ability to adapt is often affected by any
interference or force affecting the composition. The community environment, or 'area', must
therefore be. included in the transition process.

(C)John Kotter change management idea

Through his book "Leading Change," John Kotter (1996), a Harvard Business School
professor and a renowned change expert, introduced 8 Phase Model of Change, that he
created on the basis of analysis from 100 companies that were passing through a period
of transformation.
The eight stages in the period of transformation include: creating a feeling of urgency
developing better leadership alliances, identifying a vision and strategy, sense of
direction and purpose, removing barriers and inspiring employees to take action, securing
short-term wins, consolidating momentum and reinforcing change by stabilising cultural
change.

 Self-test

 How could have Netflix have endured so long?

Answer-: The Chief executive officer of Netflix offered immense support for the initiatives that
led to the continuity of customer engagement. Netflix's goal to entertain consumers in
challenging and differential ways helped to make social strategy more meaningful. Netflix was
under the assumption that notion of regression was not in importation One such instance is that
an explicit plug approval in the United States was required by the video privacy protection law to
share credit record with others. This was an issue, as Netflix representatives were not prepared to
share the details. Netflix was pre-occupied by these problems of the true assessment of
community plan itself , a minimal performance contradiction. Netflix had different, compact
features and 2 percent of users used each feature, but those using it were incredibly enthusiastic
about it. This was a challenge since the new viewed stepping to the Netflix streaming services
were overwhelmed by too many features.

 How have the obstacles been acknowledged?

Answer-: Netflix understood that the theory, but not the root had to be looked at. On their own
merits, they decided to test their proposals better. Netflix finally discovered from traditional
wisdom that its clients did not want to show all the films they had seen. Netflix understood that
this detail on history was something that consumers did not want to make public. Setting clear
goals. There was no timeline, for Netflix to follow to conquer particular goal. It was ultimately
altered while the management's judgement was clouded by no timeline.
Processes for a clean slate. Whenever a Netflix feature is destroyed, it is deleted from the server.
The decision to build a simple interface that included a detailed sunset of previous work. Netflix
has made many errors in the course of business. It decided to make long-term investments on the
premise that entertaining space would yield shareholder and consumer value. By practising
skilful leadership and product management, all these obstacles were overcome. In order to shape
theories that can help them make their goods better, Netflix is now researching market science
that analyses current data, analysis and surveys.

 What are the challenges faced by Netflix?

Answer-: Netflix has been on failure tyre for numerous numbers of times and there are two major
reasons for the failure of Netflix -:
1. Strategy Failure: - Netflix worked really hard to create and develop the future strategy.
2. Management & Leadership Failure: - The leadership had several prejudices that overshadowed
their decision as human beings.
Netflix had released its own group strategy called ‘Friends back’ in 2004. Netflix claimed that
they would be able to create their own network impact by using friends from which friends could
suggest long-tail movies to each other.

 What are Netflix brand building strategy?

Answer-: The different steps used in the models of transition do not, take place entirely in real-
life scenarios. In several cases, the change agents overlook several steps or take quite few phases
at the very same time to make it harder to discern the distinctive stages.

Lewins 3 Step Model

The model proposed by Lewins explains a transition in three different steps, which include
freezing, unfreezing and moving Following the challenges Netflix has encountered in an attempt
to enforce pricing policies in line with the expense of the Internet and the licencing fee, the
company implemented techniques that envisage the Lewins Three Stage Model.
Firstly, with only one pricing strategy, the CEO expressed customer dissatisfaction. He stated
that, taking into consideration demands of the clients, all customers are not satisfied with one
pricing structure. In essence, to brace clients for transition, this was a technique of unfreezing the
current price schedule. Second, the organisation shared their intention to adopt the proposed
model. This means that the organisation is ready to make the move. They have not, however,
completed the last step of freezing down to sanity.
Kotter's 8 step model
It is obvious, that the organisation has already adopted the first step of this model with respect to
Kotter's eight stages. In the situation, the chief executive officer has effectively persuaded the
viewers about the benefit of working on adjustments in the rate schedule. Hastings said that one
price was not appropriate and common for all consumers when he revealed the company's intent
to implement the initiative. This statement aims to attract consumer interest as it portrays the
devotion of the business to their welfare. In addition, with regard to building a powerful alliance,
the CEO has shown vigilance. In this situation, contrary to what he had done in 2011, when one
of the executives, had openly criticised the decision, he involved his co-founders in making this
decision. Additionally, with the support of his coalition partners, he has developed a clear vision.
In effect, this implies that they have adopted the third phase of the Kotter model.

Power point presentation

Epilogue
Netflix has been exceptionally successful towards the growing demand of the customer through
its changing strategy and continuing leadership performances. Apart from that ability to
transform through bold decision, long tail, the subscription business model, best price model in
competitive environment and good corporate philosophy are few initiative that attract the
customer experience is the way to success.