OK, let me tell you about my recent deep dive into Netflix’s value chain. It was quite a journey, I must say.
I started by looking at how Netflix gets its stuff to us, the viewers. They’ve got this whole system with wholesalers and retailers, you know, the usual order fulfillment, distribution, scheduling, processing, and storage. Since they’re all about digital media, their outbound logistics is mainly about getting that content to our screens, either through downloads or streaming.
Then, I dug into how they figure out what content to get and how much to pay for it. Turns out, they use these fancy statistical models to guess how many hours we’ll watch each show or movie during its license period. Then they compare the cost per hour watched with other similar deals, like whether it’s exclusive or not, or if it’s a TV show versus a movie.
I also found out that Netflix uses value chain analysis as a bargaining chip. They negotiate prices and try to make their inbound and outbound transportation processes as efficient as possible. It’s all about maximizing the bang for their buck, I guess.
Another thing I discovered is that Netflix is all about data. They use big data analytics and personalized recommendations to keep us hooked. It’s like they know what we want to watch before we even know it ourselves.
To really understand this value chain thing, I started to examine all the individual activities involved. It’s like taking apart a clock to see how each gear works. You look for ways to make things better or find opportunities to improve.
I then took a closer look at their primary activities, you know, the core stuff they do. There are five main categories, and they all relate to getting that content to us in some way.
- Inbound Logistics
- Operations
- Outbound Logistics
- Marketing and Sales
- Service
Netflix’s five generic categories of primary activities
Finally, I stumbled upon this detailed study report about Netflix’s value management process. It’s a five-step process for how they generate value. I’m still making my way through it, but it seems pretty comprehensive.
So, that’s my Netflix value chain exploration in a nutshell. It’s a complex beast, but it’s fascinating to see how all the pieces fit together. I am going to continue learning about it. Wish me luck!
