Harvard Case - Streaming Over Broadband: Why Doesn't My Netflix Work?
"Streaming Over Broadband: Why Doesn't My Netflix Work?" Harvard business case study is written by Shane Greenstein, Michael Norris. It deals with the challenges in the field of Operations Management. The case study is 23 page(s) long and it was first published on : Nov 12, 2015
At Fern Fort University, we recommend Netflix implement a multi-pronged strategy to address the issues of streaming quality and customer satisfaction. This strategy will focus on optimizing their supply chain management, enhancing information systems, and improving customer service.
2. Background
This case study explores the challenges faced by Netflix as they navigate the complex world of streaming content over broadband internet. The company experiences intermittent streaming issues, leading to customer dissatisfaction and potential churn. The main protagonists of this case are Netflix's management team, tasked with finding solutions to these issues.
3. Analysis of the Case Study
This case study highlights several key operational challenges:
1. Supply Chain Management: Netflix's supply chain is highly complex, involving content acquisition, encoding, storage, and delivery to millions of users worldwide. This complexity presents challenges in:
- Inventory Management: Managing a vast library of content requires efficient inventory control, including storage, retrieval, and distribution.
- Logistics: Netflix needs to optimize its delivery network to ensure content reaches users quickly and reliably.
- Capacity Planning: Netflix must anticipate demand fluctuations and manage peak load periods effectively to avoid service disruptions.
2. Information Systems: Netflix's streaming platform relies heavily on robust information systems to:
- Content Delivery: Efficiently manage the flow of data from servers to users.
- Performance Monitoring: Real-time monitoring of network performance and user experience.
- Data Analytics: Analyzing user data to understand viewing patterns and optimize content recommendations.
3. Customer Service: Netflix's customer service department faces challenges in:
- Responding to Complaints: Effectively addressing user complaints regarding streaming issues.
- Proactive Communication: Keeping customers informed about service disruptions and planned maintenance.
- Customer Retention: Minimizing churn by ensuring a high level of customer satisfaction.
4. Recommendations
1. Optimize Supply Chain Management:
- Content Acquisition: Develop strategic partnerships with content providers to secure exclusive content and improve content availability.
- Content Encoding: Invest in advanced encoding technologies to optimize video quality and reduce bandwidth requirements.
- Content Storage: Implement a distributed content delivery network (CDN) to minimize latency and improve streaming quality.
- Capacity Planning: Utilize forecasting methods and data analytics to predict peak demand and adjust server capacity accordingly.
2. Enhance Information Systems:
- Network Monitoring: Implement real-time monitoring tools to identify and address network bottlenecks and performance issues.
- Data Analytics: Develop sophisticated data analysis capabilities to understand user behavior, optimize content recommendations, and personalize user experience.
- Cloud Computing: Leverage cloud computing platforms for scalability, flexibility, and cost optimization.
3. Improve Customer Service:
- Automated Troubleshooting: Develop automated tools to assist customers in troubleshooting common streaming issues.
- Proactive Communication: Implement a system for proactively notifying customers about service disruptions and planned maintenance.
- Customer Relationship Management (CRM): Invest in a robust CRM system to manage customer interactions, track complaints, and improve customer satisfaction.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies: Netflix's core competencies lie in content acquisition, content delivery, and user experience. These recommendations strengthen these competencies by improving the efficiency and effectiveness of their operations.
- External Customers: These recommendations directly address customer concerns regarding streaming quality and service reliability, ultimately improving customer satisfaction and reducing churn.
- Competitors: By implementing these recommendations, Netflix can gain a competitive advantage by offering a more reliable and enjoyable streaming experience.
- Attractiveness: The benefits of these recommendations include improved customer satisfaction, reduced churn, increased revenue, and a stronger brand reputation.
6. Conclusion
By implementing these recommendations, Netflix can overcome the challenges of streaming over broadband and deliver a superior customer experience. This will involve a strategic shift towards a more efficient and customer-centric approach to their operations.
7. Discussion
Other alternatives not selected include:
- Outsourcing Content Delivery: Netflix could consider outsourcing content delivery to specialized CDN providers. However, this could lead to a loss of control over data security and potentially impact user experience.
- Reducing Content Library: Netflix could reduce the size of their content library to simplify their operations. However, this would likely lead to a loss of subscribers and a decline in market share.
Key Assumptions:
- Netflix has the resources and expertise to implement these recommendations.
- The market for streaming services will continue to grow, providing opportunities for Netflix to expand its reach.
- Technological advancements will continue to improve the efficiency and effectiveness of streaming services.
8. Next Steps
Netflix should prioritize the following steps:
- Phase 1 (Short-Term): Implement automated troubleshooting tools, enhance network monitoring capabilities, and improve customer communication channels.
- Phase 2 (Mid-Term): Develop a comprehensive data analytics platform, invest in advanced encoding technologies, and optimize content delivery networks.
- Phase 3 (Long-Term): Explore strategic partnerships with content providers, implement cloud computing solutions, and develop a robust customer relationship management system.
By implementing these recommendations and following a phased approach, Netflix can overcome the challenges of streaming over broadband and position itself for continued growth and success in the competitive streaming market.
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Case Description
In late 2013 and early 2014, Netflix service over the major U.S. Internet Service Providers (ISPs) suffered major slowdowns. What were the causes of these problems? What could Netflix do to solve them?
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