business

Industry: Technology Retail

Company Description:

Netflix Inc, is an internet television network provider to over 75 million users around the world. The company was first incorporated in August 29, 1997 in Los Gatos, CA, as a movie rental business by mail. Since then it has grown into a subscription service, streaming hours of movies and TV episodes over the internet. Netflix has a wide assortment of documentaries, feature films, and their very own original series. The company operates through three operating segments, domestic streaming, international streaming, and domestic DVD. Netflix derives its revenue from its domestic and international streaming segment by charging a monthly subscription fee to its users and its DVD rental service. Netflix has members in over 50 countries around the world and can be accessed on their TV’s, computers, and mobile devices.

Strategic Issues:

With its plan for a rapid expansion in 2016, Netflix is facing different strategic issues. One of them is obviously the adaption of the content, i.e movies, series and documentaries, to the local market. The example of Star TV in China has proved the need to serve media adapted to local language. Since Netflix was first launched in the US, most of the content is in English. Yet, it won’t be enough for Netflix to provide captions and hope for the best. Dubbing is vital, so is content deeply-rooted in one’s culture. That’s why Netflix started to create the series “Marseille” right after its launch in France. What’s more, it will benefit from economies of scale and arbitrage, for instance by picking the best location for its data center according to different factors such as labor cost, electricity cost and latency. However, it will have to overcome administrative distance, like making sure the videos respect each country’s regulations.

Besides, the company has to figure out the best marketing strategy to enter these new markets, each country being specific; the marketing must be tweaked in order to be more effective at generating revenues, awareness and profit. For instance, the price of the service varies from one country to another and the level of piracy is actually one of the controlling factors.

This international expansion financed with a heavy debt may be the answer for Netflix to finally reach probability. However, it will act as a stress test for its business model which might need adaptation in some countries. Their basic and premium plan might be less relevant in countries where people live with many relatives and where the bandwidth isn’t sufficient enough to watch in ultra HD.

Action Plan:

The report will be mainly supported through various sources. However, the objective of the team is to find a primary source that can give reliable information on at least some of the topics that are being conducted. The research will be structured as followed:

· Introduction- Netflix Inc

Vision

Mission

Goals & objectives

Strategy

Structure

· Longitudinal international profile of Netflix Inc. (Past 10 years)

· Environmental analysis: PEST, Porters five Forces

· Company Analysis: Swot, Value Chain, Financial Analysis.

· Recommendations and further actions

Our group will develop an advanced business plan for Netflix to succeed when they decide to expand this year. The company is currently faced with no free cash flow and a vast debt. Changing their business policy will make Netflix more profitable. In the U.S market, Netflix is allowing five users to access the same account for the price of only $6 which is one subscription. In order for Netflix to succeed abroad, it should allow a maximum number of three subscribers to sign in on one account for a higher price. Also, another idea is to add commercial broadcasting while using Netflix, which would bring the company more profit, other than users who pay monthly fee.