Company Background

Netflix Inc (Netflix) provides entertainment services. The organization offers TV

shows and movies consisting of original series, documentaries, and feature films
through a web subscription on television, laptop, and mobile devices. It also provides
a large range of recreational activities, video games and other entertainment
resources. Netflix also operates a separate library of movies that can be watched
instantly on subscribers' TVs through mobile programs, or computer systems. It
licenses, acquires, and produces content, consisting of unique programming
(Sarolli,2020). The company markets and promotes its service through numerous
marketing partners including multichannel video programming distributors, streaming
enjoyment vendors, client electronics manufacturers, cell operators, and internet
provider carriers. It has a commercial business presence across the Americas,
EMEA, and APAC (Center,2022). Netflix is headquartered in Los Gatos, California,
the United States. Netflix has become famous for their unofficial slogan "Netflix
&Chill" which has been popping up in pop culture in recent years.

Introduction to company stakeholders

The activities and decisions of an organization can affect individuals or particular

groups. They can be within/ internal /outside/external or outside the organization. On
the other hand, an organization’s purpose and way of operating can be affected by
the decisions made by interested parties (Freeman, 2009).

Netflix external stakeholders can further be analysed using Egan's nine stakeholder
groups.

Egan’s nine stakeholder groups

Block’s analysis of stakeholders can be further grouped into nine specific groups
depending on the degree of commitment towards the success of the organization.
Applying this to Netflix company, the various Egan’s nine stakeholder groups have
been identified as shown in appendix 3. An external stakeholder can sometimes be
challenging to manage, especially if they do not have a financial or mutual benefit
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from the company. Netflix’s cannot be successful on its own. They indirectly depend
on network companies for their streaming. They also depend on developers of
streaming devices so as to have Netflix compatible software. Other significant
external stakeholders include investors, state governments, and suppliers. Investors
provide the capital for more content development; it is through various governments
that they are licensed to operate in the specific country. Netflix also depend on third
part suppliers for quality content.

Gummesson’s 30R Model of Netflix

Adding meaning to the Christopher et al. (2013) six markets, Gummesson identified
30 relationships to explain the possible stakeholder relationships. The breakdown of
Gummesson 30R model is as shown below.

Externally oriented classic market relationships affect customers and other inter-
organizational relationships. Nano relationships are internal relationships that aim at
supporting the market relationships. Mega relationships include mass media
relationships, personal and social networks relationships. Lastly are the
organizational issues which include non-commercial relationships, which serve as
unique relationships to customers. Netflix Company will be better placed by
developing relational strategies with their employees as the internal stakeholders. On
the other hand, they will increase their value by developing relational strategies with
their suppliers as the external stakeholders. Netflix employees help the company to
serve its customers best.

They manage the company's website. Other employees are involved in research and
development to improve the company software. Other employees are engaging in
creating TV shows and movies. It is through their employees that they can establish
personal relationships with customers and other stakeholders. Netflix employees
also act as the customer care representative in responding to clients’ complaints.
Netflix can thus engage in relational strategies with their employees to ensure they
are highly motivated. Some relational strategies include paying them their wages and
salaries in time and adequately according to their qualifications. Hardworking
employees should be promoted, and they can as well offer educational programmes.
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This will ensure that employees are free to give out their suggestions. These
relational strategies ensure that employees work to the best of their abilities towards
the satisfaction of the Netflix subscribers (Kaul, 2017). Establishing a conducive
relationship with Netflix suppliers will also achieve the best and more content for the
Netflix service consumers (Thiruvattal, 2017). The strategies available to promote a
healthy relationship with suppliers include paying them timely and thoroughly. They
should also keep an active communication to communicate any desired customer
feedback that the suppliers need to note in creating the streaming content (Turnbull,
2019). The other crucial relational strategy is the ability to handle conflicts when
disagreements occur. A strong working relationship between Netflix and its suppliers
will ensure the best content to the customers. Potential content and software
suppliers will also be attracted to do business with the company (Kaul, 2017).

Netflix can also consider involving their suppliers in decision making. They could be
having important information that could add value to Netflix streaming content or
manner of streaming. In addition, Netflix can connect more with their customers.
They can develop ways to connect more with their customers. These could be
through bonus days of viewing even after the expiry of their subscription days.
Viewing bonus will increase customer loyalty to the brand and help retain existing
customers. They can also engage in the same strategy to attract new customer by
for instance allowing them some free viewing before they upgrade for premium. They
can also establish a channel for customer feedback and compliment.

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4.1 Netflix external stakeholder audit

Applying stakeholder audit to Netflix external stakeholders will involve the first step of
identification. Netflix has its main external stakeholders: customers (subscribers),
independent producers of content (suppliers), competitors, pressure groups, and
regulators. The second step of stakeholder audit involves an analysis of the
stakeholders. This includes various aspects. They include:
 External stakeholder concerns and needs
 Potential influence and power
 Position on the ladder of loyalty
 The current relationship
 How the relationship between the company and the stakeholder may bring out
risks
 The possibility of a conflict of interests and the consequences to the company
 Possibility of new relations and the impact on the business
 The standard relationship, or what the relationship should be like
The second step of analyzing stakeholders is significant as it helps to prioritize stakeholders.

High power, highly interested external stakeholders

Netflix has customers and suppliers taking the priority on the grid. Netflix customers are
concerned about quality being streamed by the Netflix company. Such quality and variety
will determine if potential customers are attracted and whether the existing customers will
be retained. Therefore, Netflix has to manage its viewers closely because they have the
power to decide whether to subscribe or keep their money away by avoiding services and
switching to competitors who offer the same or related forms of entertainment. Having
customers as the priority brings on another group of external stakeholders that should be
managed closely to ensure quality. These are the Netflix content suppliers. They provide
streaming content and thus need to be managed with care to ensure success.

4.1.2 High power, less interested stakeholders

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Netflix has the government falling in this category. Netflix has a global reach, and thus it
operates in different authority jurisdictions. The government of individual states has the
power to shut down the operations of Netflix in the country. Netflix should ensure that they
tailor their streaming content to align with relevant state requirements concerning educative
and entertainment streams.

Low power, highly interested people

The media and other pressure groups such as the community will fall in this classification.
Competitors are interested in the strategies of Netflix so as they may set their competitive
plan. However, as long as Netflix keeps improving its quality, competitors have no such
power. The community has no such power; however, they may be interested in how the
content streamed has adherence to cultural values and how Netflix protects consumers such
as children from moral degradation. The media thrives in having content to broadcast and
mostly the damaging controversies. Netflix should keep this group informed on protecting its
corporate image.

Low power, less interested people

Under this category are Netflix competitors such as Hulu. Each competitor focuses on
analyzing their customers and making their content the best. Competition is not much
concern for Netflix because, in this industry, most of the customers are shared. Therefore,
viewers of Hulu services may still be the subscribers of Netflix streams. There is not much
competition needed in this segment. However, monitoring s required to ensure relevant
competition. The third step in stakeholder audit involves establishing the appropriate
objectives. The objectives should be SMART, specific, measurable, achievable, relevant, and
time-bound (Chaffey and Ellis-Chadwick, 2019). Netflix can set SMART objectives on the level
of relationship they would like to have with their customers in terms of customer
satisfaction, variety in streams, and the user-friendliness of their platform. The fourth step
involves creating appropriate stakeholder strategies. The difference between an objective is
that objectives identify what the company should achieve, while a strategy is a detailed plan
and steps to achieve the set objectives. Once the objectives in step three have been
determined, Netflix can now work on achieving them. This could be through setting

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standards for their suppliers and hiring top-quality personnel in ICT. The fifth step involves
action or implementation of the set strategies to achieve the determined objectives. The
sixth stakeholder audit step is about measuring the progress and the performance of the
implemented plan. This is the step that allows for corrective measures when the action plan
is off track. A productive and healthy relationship between Netflix and its external
stakeholders will depend on the above steps. Netflix can make use of social media platforms
to communicate with various external stakeholders. Social media should be used
strategically and creatively. A backfire strategy in the use of social media can result in huge
losses considering the comprehensive coverage. Snapchat was on the red flag for promoting
the game called “would you rather”. They ended up using an offensive advert shown in
appendix 8. The advert was interpreted to mean glorification of a case in 2009 where Chris
Brown physically assaulted Rihanna. This resulted in many users leaving the Snapchat app,
especially after Rihanna failed to accept their apology. These are two celebrities, and really,
Snapchat should have used a more positive theme. In the same way, Netflix should ensure
carefulness and adequate consultation in their social media strategies to ensure they do not
conflict with the culture of the respective communities or society at large.

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 Figure 1: Stakeholder Analysis Matrix

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Conclusion
In summarize, stakeholder information is essential for Netflix to be successful and
worthwhile. Using an analysis of their activities and strengths, he can better identify a
way to interact with them in a meaningful way.

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