When Strategic Planning Goes Wrong Essay -- Business Management

When Strategic Planning Goes Wrong Netflix, Inc. Where Are We Going? Strategic initiatives provide a roadmap of how to steer a company towards its vision—the forward-looking perspective of where the company is going. A glimpse of where Netflix, Inc., the industry leader in movie rentals, was planning to go was revealed in the middle of 2011. What the company did not realize, at the time, was that it was headed for trouble. In July 2011, Netflix, Inc. announced that it would be changing the way its movie rental subscription plans would be priced. In the past, the lowest-priced subscription plan at $9.99—which included both DVDs and unlimited video streaming—would now be split into two separate plans priced at $7.99 each (See Appendix: Key Dates); representing a 60% increase for both service levels. The next move for the company came in September when it was announced that the DVD rental and video streaming services were going to be split off into two separate companies. The DVD-only service company would now be called Qwikster, while the video streaming service would remain under the Netflix, Inc name. By October, the company decided that it would scrap the split off initiative and keep the two rental services as they were—back under one company. Why Are We Going This Way? The Good Given the nature of the market demand for instant viewing offered through streaming media, the initial need to split the company—and the two rental service levels—into separate entities was a natural direction for Netflix. From an operational perspective, the two services require different resource capabilities and the expertise to manage them. In the case of the DVD service, this business unit requires assets that follow a more traditional ... ...any, called "Qwikster," will be completely separate from the streaming business.† October 10: The Company â€Å"has killed off Qwikster before the DVD-only service announced in September even launched†. Works Cited Lexis Nexis. Corporate Affiliations. N/A. http://0-www.corporateaffiliations.com.bianca.penlib.du.edu/subscriber/companyProfile.asp (accessed April 19, 2012). Fundinguniverse.com. Company Histories & Profiles: N: Netflix, Inc. 2012. http://www.fundinguniverse.com/company-histories/Netflix-Inc-Company-History.html (accessed April 19, 2012). The Huffington Post. Tech. July 2011. http://www.huffingtonpost.com/2011/07/12/netflix-price-subscription-plan_n_895779.html (accessed April 19, 2012). The Huffington Post. Tech. September 2011. http://www.huffingtonpost.com/2011/09/19/qwikster-netflix-streaming-dvds_n_969135.html (accessed April 19, 2012).