It is July 20, 2021, and the Board of Directors of Netflix Incorporated has employed you as a
consultant to assess and improve the company’s overall situation during the third global wave of
the COVID-19 Pandemic and recommend a set of specific, measurable, and rapid actions for the
company to take to (a) respond to increased competition in the digital streaming marketplace,
(b) provide focus regarding the nascent gaming initiative, and (c) address the company’s stalled
stock price. Please prepare a report to the Netflix board of directors that proposes a list of action
recommendations that the company needs to follow into order to address all three of these areas
in fiscal 2021.
Commenting on Netflix’ second quarter 2021 results, the company had the following to say
about their most recent performance results:
In Q2, revenue increased 19% year over year to $7.3 billion, while operating
income rose 36% year over year to $1.8 billion. We finished the quarter with over
209 million paid memberships, slightly ahead of our forecast. COVID-19 has
created some lumpiness in our membership growth (higher growth in 2020,
slower growth this year) which is working its way through. We continue to focus
on improving our service for our members and bringing them the best stories from
around the world.
Competition in digital streaming, however, continued to intensify, particularly in the United
States. As a result, the company was seeking outside growth opportunities, and was actively
examining the online gaming marketspace. The company was seeking your guidance to better
understand this market, and to give direction to this initiative. Driving the sense of urgency that
the company felt was a stalled Netflix stock price, which had traded in a narrow range for the
past year. See Netflix’s stock price history here.
As a result, the Netflix Board of Directors requests a specific and measurable recommendation in
each of the three following areas:
(1) A recommendation to address intensifying competition in digital streaming,
(2) A recommendation to address the company’s move into online gaming, and
(3) A recommendation to return Netflix’s stock price to robust growth.
Your report should be prepared as a three-page Executive Summary of Recommendations. Your
recommendations should be specific and be clearly supported by your analysis of the company’s
strategic and financial situation. You may supplement your 3-page summary with an appendix
that contains (a) an analysis of the company’s financial statements and/or pro-forma financial
projections and (b) other appendices that you consider appropriate. You will also include a table
of References to sources that you use in your Executive Summary.
Case Submission:
• Create your summary as a Word document and submit by clicking the title of this assignment
and attaching your saved document to the link provided. Please use Times New Roman, 12pt.
Font, Single and/or Double Space.
Notes:
• Three pages MAXIMUM for your Executive Summary of Recommendations. This three-page
maximum does not include any Appendices or the Reference list.
• It is required that you cite your sources in your recommendations and provide a reference list in
your appendices.
• Please use the Executive Summary template that is provided to make your report.
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