Netflix case stusy-S curve

2. Management of
Technology(MOT)

8. • https://www.youtube.com/watch?v=PF7EpEnglgk&t=318s

9. Technology
The branch of knowledge that deals with the creation and use of technical means and the application of
this knowledge for practical ends
Management of Technology
The planning, implementation, evaluation, and control of the organization’s resources and capabilities in
order to create value and competitive advantage
Innovation
Invention, new product development, and process-improvement methods are all examples of innovation
Management of Innovation
Includes both change management and managing organizational processes that encourage innovation
Strategic Inertia
The tendency of organizations to continue on their current trajectory

10. https://www.youtube.com/watch?v=REnx7EHzgDM

13. Netflix
• https://www.youtube.com/watch?v=QsSsMHV0Kt8&t=143s

14. • Introduction
• Reed Hastings, founder and CEO of Netflix, is a
creative innovator that twice changed how
people rent movies and, according to
Investopedia, took and held the market share
ever since
• Reed Hasting started mailing DVDs to people's
homes because he knew at least some of them
were lazy enough to pay for such a service.
• However, that service ended up costing the
same, or less, than it cost to drive into town and
rent a movie, so people began to think, "Why
not use Netflix?"
• As Reed Hastings was putting Blockbuster
locations out of business one by one, he was
also investing millions of dollars into streaming
videos because he knew that was the next
creative innovation coming.

15. Technology S curve

17. Blockbuster
• Before 1997 people were forced to drive into town to rent a movie
and watch it in their homes. There were thousands of mom-and-pop
video rental stores that carried the latest titles, and they made a living
at it for years. Then Blockbuster, backed with millions of dollars from
investors, started opening locations all around the world. Blockbuster
had a better atmosphere than most of the grungy mom-and-pop
stores, and they had prices that were lower than competitors as well.
Once Blockbuster put most of the small video rental stores out of
business they had the market share, however the only approach they
were taking to increase revenues was to put up more stores.

18. The Next Millennium
• The next millennium was the start of a technological revolution similar to
machines in the industrial revolution. In those days, people couldn't keep up to
the massive producing power of machines, so companies with machines put
labor intensive companies out of business. In 1997 Reed Hastings founded Netflix
that mailed DVDs to individual's homes for a monthly charge instead of an
individual rental charge.
• The monthly charge was only about $8.00 USD which was the cost of about two
movie rentals. As people started to use Netflix, fewer people needed to leave
their homes to rent a movie. Not only that, Netflix offered some interesting
options such as automatically sending you Episode 2 of your favorite show after
you sent back Episode 1. The subscription allows subscribers to rent as many
movies as they can possibly watch each month without any increase in price.
Furthermore, Netflix was able to carry thousands more movie titles and sitcoms
than Blockbuster which drew in many subscribers. Netflix says that more movie
rentals came from less popular titles rather than the most popular titles, which
was a big problem for Blockbuster to compete with.

19. • Around the year 2003-2005, Blockbuster's S-curve was starting to
flatten out after increasing at a rapid rate for over 10 years. As a
company's S-curve starts to flatten it's important to start adapting or
changing in order to sustain their business. However, Blockbuster had
run out of ideas and simply died out just like all of the mom-and-pop
stores they had previously put out of business. People didn't adapt to
Netflix all at once, it was a rapid acceptance over a few years of time.
As it got more popular more people started to subscribe and Netflix
became the leader in the industry of renting movies.

20. • Top of the S-Curve
• It seems to be automatic for every company to have an S-curve that
they have to adapt to at some point in their growth spurt. For Netflix
it was around the time that streaming videos and "On-Demand"
television were starting to become more prominent. Unlike
Blockbuster, and unknown to the public at the time, Reed Hastings
had been investing millions into streaming video research and rights
to stream sitcoms and movies.
• Reed came out swinging again with a second subscription charge that
allowed users to watch streaming videos directly on their TV. A
competitor, Hulu, allowed users to watch online, while On-Demand
television cost money for each movie or show, but Netflix was a
monthly subscription that allowed the user to watch endless amounts
of TV. And another S-Curve is born; Reed Hastings does it again! The
NYSE symbol, NFLX, started to soar for a second time!

21. • Adaption to Technology
• Netflix proved that they could adapt. Instead of pushing their DVD mailing
program, they saw the technology innovation going on and adapted to it by
changing their entire business model. Not only did Reed Hasting put most
of the annual profits into further research instead of in his pocket, he also
had to trash all of the DVDs that he invested in during the years of growth.
• In conclusion, Reed Hastings and Netflix together have adapted to creative
innovation twice, and now working on their third. Currently, they are
working on creating their own shows that they can broadcast and charge
cable television companies for the right to air. Instead of paying the fee to
broadcast shows from cable networks, they can now charge the fee to
networks instead, yet another creative way to stay at the top of the market
share. Reed Hastings has an innovative mind along with the courage to put
the idea into action. He has also proven three times that his idea, plan of
action, and business model work in a profitable way, so he is a creative
innovator of our time.

22. Case:
• In 2001 Accenture took the bold step of separating from its parent, Arthur Andersen.
• The new firm that emerged had a bright future ahead, but it also faced the challenge of building a new IT
infrastructure that could support a global organization that consults on leading-edge technology.
• Accenture's CIO at the time, Ed Schreck, knew that becoming a master of your own trade was not an easy
task.
• Frank Modruson, Schreck's successor and the person responsible for carrying forward the IT transformation
challenge from 2002 on, had ambitious plans for the new technology infrastructure that was to replace
Arthur Andersen's legacy systems. Difficult decisions had to be made.
• Should the firm continue with a decentralized approach to managing technology platforms, in which each
country chooses its own IT platforms and has autonomy to run them?
• Or should the firm take a mixed approach, in which the same standard applications would run throughout
the enterprise but would be managed independently by individual offices?
• Or should Accenture espouse a "one-firm" approach and boldly shoot for a centralized implementation of
its most critical systems, with all its offices interconnected on the same "instance" of a software platform?
• Furthermore, should the firm retain its traditional conception of IT as cost center, or should it migrate to a
scheme that recognizes IT as a service provision center that generates measurable value for the
organization?
• These questions and many others drove Accenture's CIO team to undertake one of the most remarkable IT
transformations in a global organization in recent years.

23. Important contributions to industry that management of technology
knowledge can make as follows:
•How to integrate technology into the overall strategic objectives of
organization
•How to get into and out of technologies faster and more efficiently
•How to assess/evaluate technology more efficiently
•How best to accomplish technology transfer
•How to reduce new product development time and costs
•How to manage large, complex and interdisciplinary or inter-
organisational projects/systems
•How to manage the organisation's internal use of technology
•How to leverage to effectiveness of technical professionals.

24. • To put it in a simple way, technology management is about getting
people and technologies working together to do what people are
expecting, which is a collection of systematic methods for managing
the process of applying knowledge to extend the human activities and
produce defined products.
• Effective technology management synthesizes the best ideas from all
sides: academic, practitioner, generalist or technologist.

25. • Management of technology and innovation is critical to the
organization. Because of innovations and new technologies, we have
historically seen the emergence of innovative organizational
structures and new ways of performing work.
• For example, the Industrial Revolution ushered in the functional
structure for organizations. As business moved from small craft
businesses like blacksmiths to railroads, there was a need to
introduce a more complex business structure. Today, we see the
innovations in information technology changing structures to more
network based with people being able to work remotely.
• The changes in structure are innovations in the technology of how
work is accomplished; the innovations brought on by the invention of
new products influence the technology we use and how we use it.

26. • Technology strategy—the logic of how technology will be used and what role
technology will have in the organization. For example, will innovation (first-to-
market strategies dominate) be the focus, or will the firm want to do things
better to obtain market share and value (let others take the initial risks)?
• Technology forecasting—the use of tools to study the environment for potential
technological changes that can both positively and negatively affect the firm’s
value proposition. Digitization of a variety of products such as watches and
cameras provided great opportunities for some firms and caused others to go
bankrupt. Forecasting (or at least keeping an eye on the changes in technology) is
very important in management of technology.
• Technology roadmapping—the process of taking an innovation or technology and
trying to build more value by looking for ways to use the technology in different
markets and places.
• Technology project portfolio—the use of portfolio techniques in development
and use of technology enhances the potential value of technologies being
developed and the technologies that are currently part of a firm’s portfolio.
Disney was a leading producer of animated films. However, Disney did not stop
there—the portfolio of characters in the films are now marketed as products and
displayed in Disney theme parks, and Disney very carefully manages the
availability of the animated films.

27. • Innovation activities are an important subset of technology activities.
Innovation includes “newness” in the development and used of products
and/or processes within a firm and within an industry.
• Invention, new product development, and process-improvement methods
are all examples of innovation. Management of innovation includes both
change management and managing organizational processes that
encourage innovation.
• The management of innovation is more than just planning new products,
services, brand extensions, or technology inventions—it is about imagining,
mobilizing, and competing in new ways.
• For the organization, innovation management involves setting up systems
and processes that allow newness that adds value to emerge. Some firms,
like Google and 3M, give some employees time during the workweek to
work on their own ideas with the hope of sparking new ideas that will add
value. Google News and 3M Post-it Notes are products that emerged from
this practice. In order to manage innovation processes successfully, the
firm must undertake several activities (these can involve the study of
technologies currently in use).