Operations Management of Netflix Essay

4280 Words Sep 20th, 2014 18 Pages
EXECUTIVE SUMMARY Netflix began in 1997 as a revolutionary idea by CEO Reed Hastings and software executive March Randolph. Before long, in 1999 Netflix launched its major line of business, the online subscription service, which radically changed the way consumers viewed movies and television. For a young company in an innovative and growing industry, Netflix has set itself up for a tremendous journey. The company has had much success due to its adaption of a modern business model and strength in operations management. Its continued reliance on and improvements of operation management principles is necessary to continue growing and bringing in profits. The following analysis focuses on operation management principles attributable to …show more content…
This analysis delves into the company’s operation management principles to interpret its successful strategies and offer future recommendations.

OPERATIONS AND PRODUCTIVITY Netflix must rapidly and effectively meet customer demands for entertainment services. In order to do so, proper and consistent operation management techniques must be in place for operations and productivity. In the past Netflix expressed a mismatch in operations and productivity goals. Site uptime and new feature goals clashed within the two areas of operations management. In its early stages, Netflix ran out of a central data center where internal operations and production changes were deployed every two weeks to one internal operations team. With a centralized approach, deployments were large and risky. This caused delays and decreased productivity. Today, there are exciting new trends in operations management and the market in which Netflix serves. Netflix accepted these trends and adapted to match the fast-paced production environment. Most notably, rapid product development has challenged managers to make operations as technologically smooth and effective as possible. In 2012, Netflix integrated a Netflix Cloud design for reliable operations and productions. The current design is a web, with each service having it’s own deployment schedule and innovation pace. Simply put, the Netflix approach has been to make internal operations a distributed system. The

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