Netflix McKinsey 7S Model
Netflix McKinsey 7S model shows how seven elements of businesses can be aligned to increase the overall effectiveness. According to the framework strategy, structure and systems are hard elements, while shared values, skills, style and staff represent soft elements. McKinsey 7S model stresses the presence of strong links between elements in a way that a change in one element causes changes in others. As it is illustrated in Figure 6 below, shared values are placed at the core of Netflix McKinsey 7S model. This is because shared values guide employee behaviour with implications on their performance.
Hard Elements in Netflix McKinsey 7S Model
Strategy
Nvidia business strategy relies on focusing on revenues maximization over membership growth and investing in original content. The entertainment services provider considers its globally successful original content such as House of Cards (2013-2018), BoJack Horseman (2020) and Squid Game (2021) as its unique selling proposition amid intensifying competition. Moreover, the largest streaming service in the world stays away from news and live sports segments, sticking to movies, series, documentaries and games, as part of its business strategy.
Structure
Netflix organizational structure is flat and unitary. There are considerably less management layers considering the size of the company and scope of its operations comprising 12500 people in offices in over 25 countries.[1] As a result, the flow of information is fast at the on-demand media provider and this contributes to the flexibility of the business to external macroeconomic changes.
Systems
There is a wide range of systems and processes that are important for the largest streaming service in the world to sustain its business. These systems include employee recruitment and selection, team development and orientation, transaction processing, customer relationship management, business intelligence, knowledge management and others. Furthermore, the system of selecting and recommending new content on the basis of the content the customer has watched in the past is one of the critical success factors for the entertainment services provider.
Netflix Inc. Report contains a full analysis of Netflix McKinsey 7S Model. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Ansoff Matrix and Value Chain analysis on Netflix. Moreover, the report contains analyses of Netflix leadership, business strategy organizational structure and organizational culture. The report also comprises discussions of Netflix marketing strategy, ecosystem and addresses issues of corporate social responsibility.
[1] ESG Report (2022) Netflix Inc.