NETFLIX – INTERNATIONAL EXPANSION CASE

NETFLIX – INTERNATIONAL EXPANSION CASE

Question 1

Netflix has built a brand name that has not been matched by a host of its competitors. This has established it as a market leader in the movie industry in particular. Its strong competitors such as HBO, Hulu do not have this advantage in the market. It, therefore, implies that there is a general preference for the TV shows to be aired in Netflix as opposed to other platforms. In essence, Netflix’s identity has been its major scale-out and hence its major source in which it has won over most of the market. Through this, it has used its huge budget to provide services in line with the consumer’s changes, tastes, and preferences. However, the success of Netflix has been down on first of all subscriber interactive experience that has been developed by the company has been the reason why numbers have been rising, translating into profits. Secondly, Netflix has invested heavily in appealing content in terms of shows that have received positive reviews.

For instance, Orange is the New Black and House of Cards. This eventually increased its popularity scale as well

Question 2.

The company needs to invest more in creating content compatibility with lower internet bandwidths. Apparently, in the international market, particularly Asia, Africa, and South America, there is lower internet penetration coupled with the existing connection being annoyingly low. This implies that streaming videos and television shows in these parts of the world are quite disappointing since even Netflix requires a lot of bandwidth. Consequently, this limits the number of consumers in these countries, whereby only a given section of the population can access the service. Netflix can overcome this by heavily investing in local content and ensuring a better streaming quality over low bandwidths connection to attract more customers. Secondly, the popularity of Netflix is only felt in the United States, owing to the availability of local content. However, to have a mantle and proper market dominance in the international market, Netflix must bring more local content that relates to these countries to create a more diverse audience. A large subscriber base can then be used to offset the costs that will be incurred by this investment eventually. In other words, the local library has to be diversified to capture the diversity in the interests of the countries that it wishes to expand to. A blanket approach alluding to putting in place similar content across all countries will only lead to a lot of dissatisfied customers.

Question 3

As revealed in the case study, Netflix is the largest online entertainment subscription service in the United States. Despite its steady growth since its inception in 1999, the company has relied on its strengths and opportunities to expand its market presence. This has also come in terms of handling its weaknesses and threats to maintain its market-leader tag. The strengths include. First, Netflix is a brand in the entire world that has increased its popularity. People end up subscribing to it even if they have not used it before. More so, brand loyalty has added to its advantage. Secondly, its convenience in terms of increasing the licensed amount of content for the streaming platform. And lastly, there is more user experience helped by its development to suit customer interests. Its unprofitable and unpopularity majorly indicates the weakness in the international market. More so, the company has failed to come up with a method to increase streaming in areas where bandwidth is low, owing to lower internet penetration. Secondly, the DVD membership has steadily been declining since streaming has increasingly become vital as compared to borrowing the DVDs. Netflix’s opportunities come in terms of its international market ambition. There is a bigger untapped international customer within the grasp of the company. However, issues such as lower internet connection should be resolved for the company to realize its dominance in the global market. On the same page, a consistently revealed threat is the intensively stiff competition because of the emergence of other streaming platforms such as Amazon and Hulu have continually decimated the market for Netflix.

Netflix should undertake the following two strategies since it has continued to reduce its market share as well as stumbling blocks in its quest to have a better footing in the global field. First, it must develop its content based on the internet connection in third world countries while at the same time trying as much not to compromise with the quality of the content. Secondly, the international market is subject to local content that is relevant within its set up. Ensuring that the local content is provided for will also increase its international market.