How a business case was the catalyst for Netflix's skyrocketing success
Subscription-based video-on-demand global giant Netflix is now a household name for cutting-edge original content. It carries one of the largest entertainment libraries in the world you can find on one platform for a monthly subscription.
But did you know Netflix was once a mail-based rental business in the late 1990s? It later launched a streaming media service in 2007 via the Internet with considerable success.
But it was only in 2013 when Netflix began to truly take off.
In 2013, CEO Reed Hastings sent an
to his entire team and investors detailing his new vision for Netflix's new focus on producing original content that could be in the running for Oscars and Emmys when their business made a tremendous transformation to the household name it now is.
was the catalyst for remarkable business transformation. As Harvard Business Review writers Scott D. Anthony, Alasdair Trotter, and Evan I. Schwartz note:
"Since unveiling that new purpose, Netflix revenue has roughly tripled, its profits have multiplied 32-fold, and its stock Compound Annual Growth Rate (CAGR) has increased 57% annually, versus 11% for the S&P 500." -
Part of the remarkable business transformation that put Netflix on the hearts and minds of millions around the globe was an 11-page memo, one of the best examples of the power of a well-written business case.
To drive Netflix's new vision and business strategy, Reed Hastings crafted a business case to send to his team and investors to inspire them with his company vision.
Pivoting from simple video streaming to developing original programming was a significant change in direction for Netflix, while keeping its original business intact.
Reed needed to inspire people to get on board.
In this article, we'll walk you through how to create a business case, what's a business case used for, and how you can use it to get initiatives approved to meet business needs.
Get started with this business case template.
What is a business case?
A business case lays out the foundation of a project. It inspires confidence in your key stakeholders why this project is necessary and backs up your vision with concrete research and data. All this helps your stakeholders with their decision-making process.
It communicates your vision for a project and answers these questions:
Explains the necessity of your proposed project
Why a project should be taken forward using this recommendation
The benefits to the business if this project is completed
Who is responsible for leading and managing this project
How is a project going to be implemented, and in what order?
How much this project will cost
What do the project deliverables look like?
What is the purpose of a business case?
A business case is a universal document needed when you need to seek approval for and justify the existence of a new initiative or project.
In short, a business case proves your project is worth doing.
A business case keeps the focus on the potential value a project delivers and explains its rationale. It helps both the project initiator and key stakeholders ensure valuable resources aren't wasted on low-value projects. An organization can also use a business case as a record of all the various options considered to address a business problem or opportunity while documenting the decision-making process leading up to a project’s approval.
When to use a business case?
How some people may be able to use a business case:
Founders and CEOs:
Craft a business case to propose a new initiative to your employees, investors, management team, and employees. A business case helps a founder set the stage for a new market opportunity and lays out their vision to inspire their team.
Solve your organization's problems in a systematic manner by extending existing operational processes, adding to or refining product lines, or fixing an issue
Use business cases to set out the strategic framework and get a marketing budget approved for new campaigns and expansion into new regions.
Crafting a rock-solid business case is hard work.
But by going through the process (and we'll show you the exact step-by-step process), you can demonstrate that you've thought through the entirety of your project's lifecycle.
You've evaluated the potential benefits, costs, and risks of the options available while showing why your proposed recommendation is the best way forward for the business.
Even after project approval, your business case will become a yardstick and guiding light during project execution and a way to measure its success after the project's completion.
How to research for a business case
A strong business case starts with lots of research. Thoroughly research your target market and competitors.
Define and segment your target market:
Get clear on what your project idea is focused on and who it isn't targeted. Use
like demographics, geographics, psychographics, and customer behavior to communicate this clearly in your business case. The
can also aid you in defining current market trends and growth drivers.
What are your competitors doing?
methodology to analyze what your competitors are doing in a systematic manner. Think about what you can provide as an alternative solution that's different from what they do.
What should be included in a business case?
1. Executive summary
Even though an executive summary is the first thing that shows up on your business case, it should be written last.
A good executive summary provides a clear overview of your business case.
Just like the first sentence in a novel or abstract of a research paper, the executive summary should entice your reader to continue reading while keeping key facts front and center.
An excellent executive summary should:
Highlight the key points in your business case. For example, talk about the benefits and the projected return on investment of your proposal.
Discuss your problem statement. Provide context for the problem or opportunity and show why addressing this will help the business.
Show what alternatives you have considered, what happens if no action is taken and why your proposed recommendation is the best way forward.
Back up all claims with data and figures.
Keep this section to
and include information like market value and size.
2. Finance section
Naturally, your project sponsor will be most interested in this area.
Here, you discuss and evaluate how viable your project is from a pricing and financial perspective.
How much does your project cost, and what are the financial benefits of executing your project? Do the costs of executing the project justify the projected benefits?
Document the assumptions used to make these calculations and document any potential uncertainties that may change the accuracy of these predictions.
It may be useful to include these three key financial metrics in your finance section:
Cash flow predictions:
the net amount of cash and cash-equivalent coming in and out of a business
Return on Investment (ROI)
: how much-estimated percentage gain the business gains from the original investment
Net Present Value:
the overall gain from the project after accounting for the depreciating value of money over the years.
3. Project definition & scope
Now you're getting into the meat of your business case.
This section provides more general information about your project scope. Include the following:
Background information on your project:
Make your proposed project relevant to the business by providing more information on the problem it's aiming to solve and why it makes business sense to invest in your project.
How does your project support business objectives?
What problem are you addressing, and for whom are you looking to solve this problem? This will help you identify the specific items to deliver through your project.
What alternatives have you considered?
Critically examine the alternative solutions to meet these same business objectives. Then come forward with a recommended solution.
Limitations that affect your business case:
For example, does your proposed solution only work in a specific market segment or organizational structure? Are there any dependencies on other factors that affect your project's success?
Assumptions used in your calculations to inform your business case:
Set out what
you used while building your business case. For example, assumptions on your customer's purchasing behavior, access to resources, and infrastructure.
4. Project plan
Once you've explained why your proposed solution is the best and most feasible out of the alternative solutions, it's time to look at the actual course of action.
Describe your implementation approach in this section. Think about what you need to get done during this project and collect the tasks needed. Break this down into a step-by-step approach. You ultimately want to end up with a clearly defined project schedule, with clearly assigned tasks and areas of responsibility for everyone involved.
Once your plan is in place, think about how you're going to measure and report progress.
Tap on project management tools like Coda's dashboards and project management methodologies to help you monitor your actual progress against your planned progress. Setting all these frameworks in place will inspire confidence in your key stakeholders during the project's duration.
5. Expected benefits, costs, risks & mitigation plan
Relate the expected benefits of your project to organizational goals while explaining the costs and potential risks.
Get started with these four steps:
1. What is the main business objective your project is addressing?
reducing go-to-market time,
reducing the average customer service time
improving average employee satisfaction
2. Identify the relevant business metric that's a measure of success.
Metrics can be both qualitative and quantitative measures. Show what's the expected duration in which you need to deliver results.
3. Perform a cost-benefit analysis.
Quantify these costs into two categories:
upfront expenses to start the project
recurring operating costs to fund ongoing costs like paying for staff, space, and other overheads.
4. Risk assessment and management
There are risks involved with every proposal. Show that you've thought through what happens if a risk factor does occur or how you're planning to mitigate the effects of that risk. It may be useful to include a risk log as part of your project management processes.
in this section. Every project worth doing comes with an element of risk, and your readers will know this. Being upfront with risks while proactively recommending a solution to handle these risks is the best way forward.
6. Success criteria & stakeholder requirements
When you're thinking of your success metrics to use as a measure of how successful this project has been, identify the
who are going to receive your business case.
What are their motivations?
What are their preferences in terms of communication style?
Once you understand that, adjust your success criteria accordingly.
Take, for example, what a head of finance cares about is very different from someone more well-versed in operational details.
An operations head may be more concerned with preventing downtime and managing labor costs, while the head of finance looks at the overall financial health of the company and thinks about how your project can contribute to this in the long run.
7. Project impact
Closely related to success criteria, you can measure project impact by defining the associated metrics. During your proposal presentation, ensure you get agreement from your stakeholders that these are the right metrics to measure the overall success of the project and report on the results.
8. Project schedule and costs
Visualize your project schedule using project management tools, charts, and diagrams. Tools like
are handy to plan and schedule projects.
Get started with this business case template.
After you copy this template, you can start writing in this business case template and have the data saved to your Coda account. You can also share the business case template with your colleagues as you write out the business case.
How to write a business case with a template from Coda
Step 1: Customize the “front page” of your business case
page, you can customize the look and feel to meet the needs of your audience. This is the “front page” of the business case template and usually contains information like the name of the business case, who prepared the business case, the company and address, etc. Each sub-page is linked on this page so you can easily navigate to the
, and other key components of the business case template.
Step 2: Fill out sub-pages of business case template
Each sub-page can be filled out independently or with your team. By reading through this page, you can get an idea of how to fill out each part of the business case template. Sections like the
may require creating another Coda doc to manage the day-to-day aspects of your project. Templates like this
may be appropriate for you and your team to manage projects at the detailed level.
Step 3: Share business case template and gather feedback
Once you copy this Coda doc to your workspace, you can share it with your teammates to gather feedback. One of the easiest ways to gather feedback (and to ensure people have read the business case) is the reaction button:
. You’ll see one of these buttons at the bottom of every subpage in this business case template. It’s a quick way for people to mark whether they have read the business case and for you to collect feedback. Your teammates and stakeholders can also add comments to the doc as they read it and provide suggestions.
Writing tips for a compelling business case.
Be brief and clear
Writing a business case is an exercise in communication. Check for business jargon and flowery language that your target audience won't understand. Avoid complex sentence structures and keep your writing conversational. Try reading out your business case to ensure your points aren't diluted or confusing with poor presentation.
Keep your audience in mind.
Adapt your writing style for who is going to see it. For example, if you know your head of finance is going to read your business case, or your investor pays particular attention to your financial projections, tailor your presentation accordingly.
Like how you conducted market research and competitor analysis to inform your document, think about what's important to your reader and what concerns they may have.
Emphasizing these points will make your business case more persuasive while demonstrating empathy and thoughtfulness.
Establish business objectives & business case value confidently.
Your business case is meant to persuade and inspire.
You want to communicate the value of your business case and establish why it's the best solution to solve your business challenges. Avoid hesitation and 'hedging' language - words people use to soften their impact in speech and written communication like "I think, generally." These dilute the persuasive impact of your proposal.
Some business case examples to inspire you:
Business case template FAQs
What are the steps to preparing a business case?
First, research your target market, competitors, and market trends to confirm the business opportunity or problem to solve. Translate this into a persuasive case that explains why this opportunity should be addressed while keeping it relevant to wider business objectives.
Second, analyze and identify potential solutions to address the business opportunity or problem. Research to gather information and make an informed recommendation on which option is best to proceed, accounting for costs, benefits, and potential risks.
Third, translate the potential solution into a step-by-step implementation plan with details on the project schedule, who is involved, and what are the milestones to use as measures of success.
What is the difference between a business case and a proposal?
A good business case explains the business problem or opportunity. It identifies and recommends the best option to tackle this and gives a comprehensive explanation to help decision-makers and key stakeholders decide on the next steps. This is usually produced within the organization to get internal approval for a new project.
A business proposal is designed to persuade an organization to buy a new product or service. It's often sent from a salesperson from another company to meet a specific need or as a response to an offer from the organization openly requesting proposals.
What is a decision tree for a business case?
A decision tree is a branching diagram used to display the multiple outcomes of a complex decision. It's usually a more accessible way to present decision points and all their alternative outcomes and helps stakeholders quickly make critical business decisions.
Is a business case similar to a business plan?
They cover similar items but differ in scope and time horizon. A business case proposes and lays out the foundation for a new project, strategy, or potential market opportunity within an existing organization, usually involving a few aspects of the business. In comparison, a business plan is a proposal for a completely new business entity or an overhaul of an existing business.