and this is the scenario

Netflix Headquarters

Los Gatos, California

CEO Reed Hastings started Netflix in 1997 after becoming angry about paying Blockbuster Video $40 for a late return of Apollo 13. Hastings and Netflix struck back with flat monthly fees for unlimited DVDs rentals, easy home delivery and returns via prepaid postage envelopes, and no late fees, which let customers keep DVDs as long as they wanted. Blockbuster, which earned up to $800 million annually from late returns, was slow to respond and lost customers in droves.

When Blockbuster, Amazon, and Walmart started their own mail-delivery video rentals, Hastings recognized that Netflix was in competition with "the biggest rental company, the biggest e-commerce company, and the biggest company, period." With investors expecting it to fail, Netflix's stock price dropped precipitously to $2.50 a share. But with an average subscriber cost of just $4 a month compared to an average subscriber fee of $15, Netflix, unlike its competitors, made money from each customer. Three years later, Walmart abandoned the business, asking Netflix to handle DVD rentals on Walmart.com. Amazon, by contrast, entered the DVD rental business in Great Britain, expecting that experience to prepare it to beat Netflix in the United States. But, like Walmart, Amazon quit after four years of losses. Finally, 13 years after Netflix's founding, Blockbuster declared bankruptcy. With DVDs mailed to 17 million monthly subscribers from 50 distribution centers nationwide, Netflix is now the industry leader in DVD rentals.

However, its expertise in shipping and distributing DVDs won't provide a competitive advantage when streaming files over the Internet. Indeed, Netflix's Watch Instantly download service is in competition with Amazon's Video on Demand, Apple's iTunes, HuluPlus at Hulu.com, Time-Warner Cable's TV Everywhere, and DirectTV Cinema, all of which offer movie and TV downloads. Moreover, unlike DVDs, which can be rented without studio approval, U.S. copyright laws require streaming rights to be purchased from TV and movie studios before downloading content into people's homes. And that creates two new issues. First, does Netflix have deep enough pockets to outbid its rivals for broad access to the studios' TV and movie content? Second, can it convince the studios that it is not a direct competitor? HBO, for instance, won't license any of its original shows, like The Sopranos, for Netflix streaming. It also has exclusive rights for up to eight years for content from Twentieth Century Fox and Universal Pictures. HBO co-president Eric Kessler says, "There is value in exclusivity. Consumers are willing to pay a premium for high-quality, exclusive content." If other studio executives think this, Netflix will not acquire the video content it needs to satisfy its customers. Planning involves determining organizational goals and a means for achieving them. So, how can Netflix generate the cash it needs to pay the studios? How can it convince them it's not a competitor so they will agree to license their content?

Netflix must also address the significant organizational challenges accompanying accelerated growth. Hastings experienced the same problem in his first company, Pure Software, where he admitted, "Management was my biggest challenge; every year there were twice as many people and it was trial by fire. I was underprepared for the complexities and personalities." With blazing growth on one hand and the strategic challenge of obtaining studio content on the other, how much time should he and his executive team devote directly to hiring? Deciding where decisions will be made is a key part of the management function of organizing. So, should he and his executive team be directly involved, or is this something that he should delegate? Finally, what can Netflix, which is located near Silicon Valley, home to Google, eBay, Apple, Hewlett-Packard, and Facebook, some of the most attractive employers in the world, provide in the way of pay, perks, and company culture that will attract, inspire, and motivate top talent to achieve organizational goals?

If you were in charge of Netflix, what would you do

this is what the teacher asks to be done and these are the questions: In this journal, answer the question "what would you do" and be sure to include deep critical thinking including as many of the following as apply to the situation:

• what you would do
• why you would choose that
• how you would expect it to turn out
• what could go wrong
• what contingency plan would you have
• what does success look like with your plan

and this is what the teacher expects me to do

-As we have seen Netflix was able to grow a vast streaming site that has reached success that for the most part has been unrivaled. If I was in Hastings shoes during this time period I believe I would have created a hybrid style renting/streaming service until I could afford the programs that I believe would be able to turn us into a complete streaming cite. On the topic of hiring I believe that I would delegate one of our top people to be in charge of hiring. If the applicants are applying for a high profile position then my delegate will handle the initial process and then the rest of the team would join in towards the end.

-I would choose to make my website a hybrid site because then it is an easy transition for the customers and gives the company enough time to earn the cash needed to buy shows and movies that would be able to draw enough people in. I would delegate someone so that I can focus on more big picture things and not spend the entire day interviewing people. I would interview those in high responsibility positions but that is pretty much it.

- I expect that these two choices would turn out fairly well. Customers don't want a sudden shock that completely switching to a streaming site would bring and the company would not be digging itself a hole of debt. Delegating someone to hire people for me would allow me to focus on bigger things. We would be able to grow our company at a reasonable pace and get quality employees as long as I delegate someone who is strict and hires hard workers.

- The negatives would be that people don't like the shows that we are streaming and that they completely reject the streaming side of the company. If this happens then it is unlikely that the board will vote to switch to a full streaming site due to the unpopularity of the online streaming. The negative side about delegating someone to hire employees is if they do not hire people that live up to my standards. If the people they hire aren't good workers then it will not work out. The opposite is also possible. They are too picky about who they hire and we do not have enough workers to grow as a company.

- If these happen I do have a contingency plan. If people reject the idea of streaming I would give rewards for those who watch the streams. Things such as "Invite your friends to watch a show through our streaming site and get 5 dollars off your next month" so that we can start to push people in that direction. A big part of that is getting shows that people are interested in so that they actually want to watch through streaming. For the hiring part it is fairly easy, I would delegate another person to be the hiring director. If I am choosing people from my team to do these jobs then I can have the bad hiring director refill his position and take an expendable person who I trust to fill the position of hiring. If this proves to fail again I would continue to try until we find a right fit for the position.

- Success with my plan is growing to the point that we no longer send physical copies of movies and shows through the mail and people have easily adjusted to streaming from their homes. Also, taking enough time to where we can afford popular shows that people will pay the monthly fee to watch. Success with the hiring part is filling that position with someone I trust so that the company gets filled with quality employees who can help grow the company at a reasonable pace.

I Hope so explain me well!