Value chain analysis is an analytical tool that can be used to find business activities that can create value and competitive advantage to the on-demand media provider. Figure below illustrates the essence of Netflix value chain analysis. Netflix Value Chain Analysis Netflix Primary Activities Netflix Inbound logistics Inbound logistics involves the processes associated with receiving and storing raw materials to create output. For a streaming service such as Netflix content is the raw material. Establishing strategic relationship with content producers and intellectual property holders such as Warner Brothers, Dream Works and Sony Pictures are the main sources of inbound logistics value creation for a streaming business. Netflix is utilizing these sources extensively. Currently, Netflix is increasing investments to produce its own, original content such as Squid Game, BoJack Horseman and Stranger Things as a differentiator amid intensifying competition. This shift has certain implications on inbound logistics aspect of the business. Specifically, focus on original content requires greater involvement in inbound logistics for the largest streaming service in the world. Netflix Operations Operations are the stage where inbound logistics are transformed into outbound logistics. For Netflix, operational efficiency and cost advantage are the main sources of value creation at this stage. The on-demand media provider has to maintain its video streaming platform effectively in terms of ease of access, quick search, stability, and security of the server. Netflix Outbound Logistics Outbound logistics refer to the distribution of products and services to customers. Usual sources of value creation in outbound logistics include Delivering to consumers directly without intermediaries, Cooperation with other businesses to share distribution costs and extensive integration of information and communication technologies. Considering that Netflix delivers digital media through streaming and downloads, the relevance of outbound logistics aspect of value chain analysis for the largest streaming service in…Netflix Value Chain Analysis
Wednesday, September 20, 2023
Research Methodology
Value chain analysis is an analytical tool that can be used to find business activities that can create value and competitive advantage to the on-demand media provider. Figure below illustrates the essence of Netflix value chain analysis. Netflix Value Chain Analysis Netflix Primary Activities Netflix Inbound logistics Inbound logistics involves the processes associated with receiving and storing raw materials to create output. For a streaming service such as Netflix content is the raw material. Establishing strategic relationship with content producers and intellectual property holders such as Warner Brothers, Dream Works and Sony Pictures are the main sources of inbound logistics value creation for a streaming business. Netflix is utilizing these sources extensively. Currently, Netflix is increasing investments to produce its own, original content such as Squid Game, BoJack Horseman and Stranger Things as a differentiator amid intensifying competition. This shift has certain implications on inbound logistics aspect of the business. Specifically, focus on original content requires greater involvement in inbound logistics for the largest streaming service in the world. Netflix Operations Operations are the stage where inbound logistics are transformed into outbound logistics. For Netflix, operational efficiency and cost advantage are the main sources of value creation at this stage. The on-demand media provider has to maintain its video streaming platform effectively in terms of ease of access, quick search, stability, and security of the server. Netflix Outbound Logistics Outbound logistics refer to the distribution of products and services to customers. Usual sources of value creation in outbound logistics include Delivering to consumers directly without intermediaries, Cooperation with other businesses to share distribution costs and extensive integration of information and communication technologies. Considering that Netflix delivers digital media through streaming and downloads, the relevance of outbound logistics aspect of value chain analysis for the largest streaming service in…
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