Strategy &
Global Economics
Case Study
Netflix: Dynamic Capabilities
for Global Success
© 2023 Quantic Holdings, Inc. All rights reserved.
Overview
Welcome to the Strategy & Global Economics case study session! Valar is pleased to
invite you to participate in a robust discussion of the following case study:
Netflix has emerged as a groundbreaking force in the entertainment industry,
revolutionizing the way we consume content. One of the key factors behind its success
lies in its effective implementation of dynamic capabilities. Dynamic capabilities refer to a
company's ability to adapt, innovate, and respond swiftly to changing market conditions,
and Netflix has showcased this ability in remarkable ways.
First and foremost, Netflix has leveraged technology and data analytics to build a deep
understanding of its customers. By employing sophisticated algorithms, they gather vast
amounts of data on user preferences, viewing habits, and content ratings. This enables
them to personalize the user experience and offer highly targeted recommendations.
The company continuously refines and updates its algorithms, staying ahead of
competitors and providing customers with a superior content discovery process.
Furthermore, Netflix's ability to rapidly scale its operations has been a vital dynamic
capability. With the growth of streaming services, Netflix faced the challenge of
expanding its content library to meet the increasing demands of its global audience. To
tackle this, the company developed strategic partnerships with content creators and
invested heavily in original programming. By doing so, Netflix not only ensured a
constant flow of fresh and exclusive content but also gained a competitive edge over
traditional television networks.
Another remarkable aspect of Netflix's strategy is its commitment to innovation. The
company has demonstrated an impressive ability to adapt to technological
advancements and changing consumer behaviors. When the trend of binge-watching
emerged, Netflix recognized its potential and capitalized on it by releasing full seasons of
original shows all at once. This forward-thinking approach resonated with viewers and
set a new standard for content consumption. Additionally, Netflix has continuously
experimented with new formats, such as interactive storytelling in shows like "Black
Mirror: Bandersnatch," showcasing its willingness to push boundaries and embrace
emerging trends.
© 2023 Quantic Holdings, Inc. All rights reserved.
In conclusion, Netflix's success can be attributed to its effective utilization of dynamic
capabilities. By harnessing data analytics, rapidly scaling operations, and embracing
innovation, the company has positioned itself as a dominant player in the entertainment
industry. Netflix's ability to adapt and evolve in a rapidly changing landscape has allowed
it to stay ahead of the competition and capture the hearts and minds of millions of
subscribers worldwide.
Please read this case study before attending the event. Come prepared to engage with
your fellow Valar students on a lively discussion on the questions below:
Discussion Questions
1. What were the key factors behind Netflix’s success in the first era (1997–2006);
second era (2007–2012); and, third era (2013–present)?
2. Use VRIO analysis to identify the capabilities that contributed to Netflix’s
sustainable competitive advantage.
3. How did all three elements of dynamic capabilities theory (sensing, seizing, and
reconfiguration) contribute to the success of “Netflix Originals” and the company’s
global success?
4. Contrast the applicability of Teece’s (1997, 2007) dynamic capabilities framework
with Porter’s (1980, 1996) competitive strategy in explaining Netflix’s success.
Tips
● To prepare in advance for the case discussion, please read the case study here.
● Review the Strategy & Global Economics concentration content from your Quantic
curriculum.
Discussion Guidelines
● Come prepared with your thoughts, but there is no need to have any written
documentation.
● Allow everyone a chance to speak.
● Listen respectfully and actively.
● Criticize ideas, not individuals.
© 2023 Quantic Holdings, Inc. All rights reserved.
● Commit to learning, not debating.
● Avoid blame, speculation, and inflammatory language.
● Avoid assumptions about others, especially based on their perceived social group.
© 2023 Quantic Holdings, Inc. All rights reserved.
