Report on Netflix

Report on Netflix

Executive summary

Netflix is an American media service industry and a production founded on 29 august 1997. The company uses strategies to ensure that it remains the best in the market internationally. For instance, it is now it is in over 199 countries and is planning on expanding. Netflix uses a distinct competitive strategy of developing a distinct brand name. Hence, Netflix is more successful because it uses strategies that differentiate it from its competitors. For the future Netflix market, there is a need for venturing China, North Korea, and Syria because they have a lucrative market.

On the other hand, the supplier relationship to Amazon has a significant impact on Netflix’s international competitiveness; hence it should now focus more on video streaming markets like HBO. It should also focus on other cloud computing services. For future strategies, Netflix should focus more on the extension of their reality shows, the innovation of the new content, and aim at having an adaptation factor-like language.

1. introduction

Netflix is one of the most successful online movie-by mail rental in the United States, founded in 1997 by Wilmort Reed Hastings Jr. after founding the company, two years later, it launched the company’s subscription services. In four years, its popularity has grown up to one million subscribers and had 12 million subscribers by the end of 2008. Additionally, Netflix operates under a code of ethics that guides its directors, officers as well as other employees in deterring any wrongdoing and promoting of ethical behaviors. Netflix aims at maintaining an honest and ethical code of conduct in its daily activities. A question arises on whether Netflix will survive the ever-changing streaming world. There is growing competition for Netflix from Apple, Disney, and AT &T.

Question 1

Recommendation of a Strategic Option for Netflix for Future Implementation

Different Regions Where Netflix Operates

At first, Netflix was initially available in the United States. However, it has now expounded to different countries for the last ten years. Netflix services are available in many countries except China, Syria, North Korea, and Crimea. Currently, it operates in over 190 countries as of 2016. Emarketer has estimated which states have the highest levels of user penetration by tracking down individual users per month. For instance, outside the United States, which is the home and the top market, three are other countries such as Canada and Norway, that have high levels of penetration. Hence, for future recommendations, I would recommend a strategic option of ensuring that Netflix is accessible in every country.

An example is China, which has a high population so that it can be a market target offering a large number of users. Further, Netflix now allows people to change their Netflix region and country, which makes it possible to use Netflix in any part of the world. Being flexible is a good strategy helping in expanding its market.

Competitive Strategies of Netflix

The surge and advancement in technology have a significant impact on the growth and development of Netflix. The notice is noticeably the leading online business driver in contemporary society. Netflix happens to be one of the online businesses that operate in the video rental industry. In the past, the company has gone through remarkable growth and expansion of its operation online. However, its growth and development are credited to the competitive advantages which have accelerated the industry to be the best. Netflix utilizes product differentiation. Cost leadership in addition to international market expansions and other economies of scale. These are the key competitive strategies that the firm uses to sustain its market leadership. To sum up, technology plays a vital role in the success of the firm’s competitive strategy and international upsurge.

I would recommend that the company should adopt a competitive advantage where it develops by developing a unique brand name for future implementation. Netflix is reportedly said to have surpassed its competitors in the development of distinct products and services by considering the client’s needs.  This move will help the firm in keeping its competitors and other new entrants at bay. For instance, unlike the other brands such as Redbox and Hulu, Netflix is at the top in the film industry due to its unique products and services. Mostly, the company focuses on branding its product name for the penetration of the market.

Consequently, the company has won the customer’s loyalty because of their understanding of the type of brand name Netflix represents. Additionally, Netflix ensures that its clients get to enjoy all-time advert-free movies and television shows with only a $10 per month subscription. Netflix provides its library contains several classics, movie studios containing many original collection and television shows which resonate with the clients. For future implementation, the company should ensure that there is streaming food, which will provide that there certain brand propositions. This will help the company in the establishment of competitive edges over competitors such as Hulu, which even though it introduced many tiers, it ended up making its brand name unattractive to clients. So, Netflix should strive to establish a distinct brand name which will place it at the top position in the market against any other new entries in the market or the competitors.

I recommend the company to consider the three different competitive strategies theories for future implementation, which include low cost, niche, and differentiation. The low-cost strategy will assist in achieving and providing no-frills outputs of Netflix products for small processes to broadly based clients.  These low-cost strategy outputs will help in distinguishing the company’s products from its competitor’s outputs. So there will be less minimal differentiation associated with Netflix outputs. Further, Netflix should focus on niche strategies which majorly focuses on its approach in the market.  Niche strategy will help Netflix in the enhancement of customer relationships, will help in the reduction of competition as well as increasing visibility and ensuring that the company offers users the products and services they need.

Different products Netflix offers

Netflix offers streaming services that permit its client to watch diversified award-winning TV shops, documentaries as well as movies, and other internet-connected devices. Through Netflix, it is possible to access unlimited ad-free viewing of content. Other studios produce most of its films and shows, and when they are theatrically released, then it makes its way through a period of rental availability on DVD or Blue-ray. One can access all Netflix materials through the use of compatible devices such as smart TVs, phones, computers, and streaming players. However, for a future implementation plan, Netflix should include more products in their product list.

Further, it can adopt product placement, which will ensure that firms pay Netflix for including their products or brands in their programmers. This will help in making the film companies have the ability to pay for their content creation. It will lead to an increase in profit margins for firm industries as well as the creation of more awareness for brands which positively impact the shows.

Growth Strategies (i.e., Ansoff’s Matrix)

Netflix has been successful in the streaming industry more than its competitors because it uses the Ansoff matrix strategy. Netflix uses the four strategies of Ansoff Matrix, which involve market penetration that entails putting more focus on the increment of sales for the existing products in the current markets. Further, Netflix utilizes product development, which consists of the introduction of new products to the current markets. This has made the firm to be competitive in the market and have the largest market internationally. It is through strategic partnerships where Netflix accesses other firms for the partnership to gain the different distribution channels. This helps in giving the best products in the market, and through acquiring of competitor’s products, then merging the resources helps in the creation of new products which makes it possible to offer the best for the existing markets. Netflix uses market development where it gets in a new market for its existing products. On the other hand, Netflix is more innovative when compared to other streaming firms because it offers many different products on the market. Hence, the main development driver of Netflix is its innovative nature, which is associated with is a success. The company takes advantage of being the first mover intentionally. Further, Netflix uses diffusion of innovation in seeking to explain how, why, and what rates its new ideas and technology are spreading in the world.  To sum up, Netflix uses strategies that are distinct hence differentiating it from the other competitors.

Question 2

Future Netflix Market

For the future Netflix market, there is a need for investing in countries that do not have access to Netflix. They include China, Crimea, and North Korea, respectively.

1. China

Country’s attractiveness

Netflix should invest in China in its plan since china has a large market size for online streaming, which is approximately 112 billion Yuan by 2020. In china, the market segment of live streaming has increased more than double in comparison to the previous years, which generates over $3bn as revenue as presorted by Credit Suisse. Further, the competition conditions in China are a bit favorable since Netflix offers differentiated products which other streaming industries cannot provide; hence it can attract a large market size. The cultural environment has a great impact on the market and the success of any streaming site in China. For Netflix to succeed, it has to carefully study the country’s culture and try interferer with it in all the products they offer so the Chinese can enjoy and opt for Netflix products.

The competitive strength of Netflix

By the launching of a spate of Mandarin language original shows in Netflix in china will help in tapping millions of people streaming even though it does not have to launch it in China but instead aim at that outside china. Through partnering with different Chinese streaming, companies can help in achieving over one million Netflix subscribers.  Additionally, Netflix has a good marketing ability and capacity, which guarantees that if it entirely decides on venturing in the Chinese market, then it can capture a significant market, which is evident with its ability to expand in 190 countries within only seven years.

1. North Korea

Netflix should consider expanding its market to North Korea, which is has a large market size of almost 8.million subscribers to different streaming sites. Its online users are increasing the competition conditions significantly for streaming sites are favorable, so Netflix can successfully thrive in North Korea. There is a favorable legal and political environment as long as it gets the right license.

Additionally, Netflix has competitive advantage strategies since it had a large customer base, which has grown within a short period. Further, Netflix has a global presence since it is a worldwide brand; hence when it ventures in North Korea, it will conveniently win a large market size because of its high levels of convenience and accessibility. There are new market opportunities in North Korea that Netflix can grab and offer top quality products and services.

1. Syria

Syria has a large population that is gradually increasing is one of the highest populations with high growth rates in the world. This means that it has a large market size when products are services are availed since it has a market segment for online streaming of almost 20 million. Since there are no major streaming sites in Syria, it is competitively favorable for Netflix to invest in it. Considerably, Netflix has differentiated services and products which are convenient. It attracts new customers quickly and offers a great customer experience, which makes it more competitive than any other industry. Hence, in future, Netflix should opt for investing in Syria.

3a.   supplier relationship between Amazon and Netflix

The supplier relationship to Amazon, which is through AWS, has a negative impact on the international competitiveness of Netflix. This is because it offers a direct competition with Netflix from Amazon, which puts it under risk. An example is where Netflix now feels that Amazon is turning to be an existential threat, which makes Netflix management to think of wailings away from the AWS environment.  Further amazon competes in cloud computing businesses with companies such as Microsoft, oracles, and international business machines. Hence these competitors will have an advantage in case Netflix fallout.

There is a negative impact on the international competitiveness of Netflix if it continues to keep amazon as its supplier through AWS. These are two major streaming companies that are stiffly competition against each other, so forming a supplier relationship puts Netflix on the verge of falling out. Hence, I recommend that Netflix should focus more on video streaming markets such as HBO which is an American premium television network which can be an active replacer of Amazon AWS. Further, Netflix, I recommend that Netflix should put more on cloud computing services, which is a significant focus for Amazon, its main competitor.

3. B future strategies for Netflix

Netflix has been the top streaming site in over 190 countries. Still, there is a need for a future strategy that will help in maintaining its position and competing against its rivals successfully. In the future, Netflix aims at increasing the number of reality shows by including new movies and other TV shows. For example, they include a renewal of TV shows from ABC, CBC as well as Pop TV.

Further, Netflix, for its future strategies, should focus more on the innovation of new content. These innovations include the Netflix queue, which might seem a significant innovation, but it is vital in the Netflix experience. In future strategies, Netflix, in terms of creation of new content, should officially comment on the release time, which will be ensuring that the day for the release of a new season will consider going by the clock in the time zine where the firm is headquartered.  It should also innovate a new feature that will help in tracking any incoming release which could help users. In future strategies, Netflix aims at doubling the number of different languages. For instance, it plans on increasing the number of French words used in its shows. In the case where it decides to venture into China, it will have to come up with Chinese language shows.

Conclusion

In conclusion, Netflix is one of the largest streaming companies internationally. There are strategic options that Netflix can adopt for its future implementation. They include the different regions where it operates. An example is that Netflix is now in more than 190 countries, and there is a need to expand more. Additionally, Netflix has adopted a distinct competitive strategy, which makes it top in the market. It has developed a distinct brand name that attracts the clients. Additionally, Netflix should invest in three countries ranking from China, North Korea, and Syria. They have a large market size and have favorable competitive conditions, which include the political, cultural, and political environment. Again, the supplier relationship with amazon through AWS has a negative impact on the international competitiveness of Netflix firm. Hence, it should instead focus more on video streaming markets like HBO as well as on cloud computing services.

References