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Digital Transformation - Netflix

The report analyzes Netflix's digital transformation using the Extended DaWoGoMo framework, highlighting changes in digital architecture, work systems, governance, and business model. Key strategies included data-driven decision making, workflow automation, and a shift to a subscription-based streaming model, all supported by a culture of innovation. This transformation has enhanced operational efficiency and positioned Netflix as a leader in the competitive entertainment industry.

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35 views3 pages

Digital Transformation - Netflix

The report analyzes Netflix's digital transformation using the Extended DaWoGoMo framework, highlighting changes in digital architecture, work systems, governance, and business model. Key strategies included data-driven decision making, workflow automation, and a shift to a subscription-based streaming model, all supported by a culture of innovation. This transformation has enhanced operational efficiency and positioned Netflix as a leader in the competitive entertainment industry.

Uploaded by

Shwetambari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Digital Transformation - Netflix

Executive Summary
This report analyzes the digital transformation of Netflix, a leading subscription streaming
service provider. The analysis utilizes the Extended DaWoGoMo framework to examine how
Netflix transformed its digital architecture, work systems, governance, and business model. The
report also explores the crucial role of people and culture in facilitating this successful
transformation.

Introduction
The digital age has significantly impacted the entertainment industry, leading to a paradigm shift
in how audiences consume content. Netflix, initially a DVD rental service, recognized the need
for digital transformation to remain competitive. Through a multi-faceted approach
encompassing data-driven decision making, technology adoption, and cultural change, Netflix
revolutionized the way people experience movies and television shows.

Digital Transformation Details


Netflix's digital transformation began with a focus on Data-driven decision making (DA). They
leveraged customer data to understand viewing habits and preferences. This data insights fueled
content acquisition and production strategies, allowing them to curate a library tailored to
subscriber interests.

Workflow automation (WO) was another key element. Netflix automated tasks like movie
recommendations, billing, and customer service interactions. This streamlined operations,
improved efficiency, and enhanced the user experience.

Digital Architecture

Netflix invested heavily in building a robust and scalable cloud-based infrastructure. This
allowed them to deliver high-quality streaming services globally without geographical
limitations.

Work Systems Transformation

The transformation extended to work systems. Traditional production models were replaced with
agile methodologies, fostering faster content creation and iteration based on real-time data.

Governance
Netflix adopted a decentralized decision-making structure, empowering employees to take
ownership and experiment. This agile governance model facilitated rapid adaptation and
innovation.

Business Model Transformation

Netflix's initial business model relied on DVD rentals. However, they pivoted to a subscription-
based streaming model, providing anytime, anywhere access to content. This shift not only
satisfied customer demand but also created a recurring revenue stream.

Analysis using the Extended DaWoGoMo Model


Data (DA): Data analytics became the cornerstone of decision-making at Netflix. Viewing data
guided content acquisition, original content creation, and personalization algorithms, leading to a
more engaging user experience.

Workflow Automation (WO): Automating repetitive tasks like billing and recommendations
freed up human resources for higher-value activities such as content curation and customer
support. This optimization increased efficiency and improved customer satisfaction.

Governance and Operating Model (GOMO):** The shift towards a decentralized governance
model empowered employees at all levels to make decisions. This agility allowed Netflix to
respond quickly to market trends and customer feedback. Additionally, adopting an agile work
style facilitated faster content creation and iteration cycles.

Mobile (MO): Recognizing the growing importance of mobile devices, Netflix prioritized
mobile-friendly interfaces and applications. This ensured seamless content access across various
platforms, further enhancing user convenience.

Social (SO): While not explicitly mentioned in the original DaWoGoMo model, social media
plays a significant role in Netflix's transformation. Social media platforms serve as marketing
channels to promote content and foster viewer engagement through discussions and
recommendations.

People and Culture

The success of Netflix's digital transformation hinges on its people and culture. The company
fosters a culture of innovation, data-driven decision making, and continuous learning. Employees
are encouraged to take risks, experiment, and learn from failures. This fosters a dynamic and
adaptable workforce that thrives in the ever-evolving digital landscape.

Discussion
Information Processing Capabilities: Netflix's digital transformation significantly enhanced its
information processing capabilities. Cloud-based infrastructure allows for real-time data
collection and analysis, enabling them to understand customer preferences at a granular level.
This data is then used to personalize recommendations, curate content libraries, and optimize
content delivery.

Work Transformation: The transformation shifted work systems from traditional models to an
agile methodology. This approach allows for faster content creation cycles, quicker adaptation to
market trends, and continuous improvement based on user feedback.

Governance: Decentralized decision making empowers employees and fosters a culture of


ownership. It also streamlines processes and accelerates innovation, allowing Netflix to stay
ahead of the competition. Additionally, reducing agency costs associated with hierarchical
structures contributes to overall efficiency.

Business Model: The shift to a subscription-based streaming model not only catered to evolving
customer preferences but also provided a predictable and sustainable revenue stream. This model
allowed Netflix to invest in high-quality content and continuously improve its offerings.

Conclusion
Netflix's digital transformation serves as a prime example of how a company can leverage
technology, data, and a culture of innovation to achieve competitive advantage. By embracing
the Extended DaWoGoMo framework, Netflix transformed its digital architecture, work systems,
governance, and business model. This multifaceted approach not only improved operational
efficiency and information processing capabilities but also fostered a culture of agility and
customer centricity. Netflix'

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