Topic: Netflix Consumer Brand Portfolio

Name: Chanmonyrotana Lay

Course Code: MKT 302
Course Title: Consumer Behavior
Submission Date: 7th September 2019
 Content

I. Netflix Company
II. Netflix Strategic
III. Netflix competitor and Business analysis
IV. SWOT Analysis and PESTEL
V. Five Force Analysis
VI. Environment Analysis
I. Netflix Company

Netflix, Inc. is an American media-services provider and production company headquartered in

Los Gatos, California, founded in 1997 by Reed Hastings and Marc Randolph in Scotts Valley,
California, Netflix is a leading streaming video on demand (SVOD) company operating in 190
countries with 130 million subscribers [1]. The product and revenue model in video streaming
industry is very tangible and direct. Users watch TV shows, movies (on-demand) or any video
content on variety of devices e.g. Tablets, Laptops, Smart phones, Netflix innovations has done
till date is Netflix provides online video streaming services and DVD on demand to its
customers. Netflix came up with video recommendation algorithm in 2006. It has started video
streaming services in 2007 and exclusive content creation from 2011.Netflix have a driven Block
buster out of business. They have started DVD on demand which stopped impulsive buying.
Previously they have targeted viewers who was not served well by Block buster. later they
increased the customer base. Netflix have used Big data technologies for its video streaming
services on TV. They have started with on show "House of Cards" on a trial. Netflix is
innovative in HR policy also. They only hire top talents and also let them go when it's needed.

II. Netflix Strategic

Five step strategic control process for Netflix:

1.Goal-Setting:

The purpose of goal setting is to clarify the vision for your business, in these three key facets are
there

- define both short - and long-term objectives

- Identify the process of how to accomplish your objective

- customize the process for your staff, give each person a task with which he can succeed.

keep in mind during this process your goals to be detailed improve the values of your vision and
mission statement that succinctly communicates your goals to both your shareholders and your
staff.
2.Analysis:

The focus of the analysis should be on understanding the needs of the business as a sustainable
entity, its strategic direction and identifying initiatives that will help your business grow.

Examine any external or internal issues that can affect your goals and objectives .and also make
sure to identify both the strengths and weaknesses of your organization as well as any threats and
opportunities that may arise along the path.

3.Strategy Formulation:

The 1st step review the information gleaned from completing the analysis, and determine what
resources the business currently has that can help reach the defined goals and objectives, and
Defined goals and objectives.

4.Strategy Implementation:

Successful strategy implementation is critical to the success of the business venture, everyone
within the organization must be made clear of their responsibilities and duties, and how that fits
in with the overall goal.

5.Evaluation and Control:

Strategy evaluation and control actions include performance measurements, consistent review of
internal and external issues and making corrective actions when necessary. Any successful
evaluation of the strategy begins with defining the parameters to be measured. These parameters
should mirror the goals in stage.
The internationalization strategy of Netflix has also been successful, the company has rapidly
expanded into 190 countries with approximately 70 million users in countries other than USA. In
USA, the user penetration rate is 64 % and internationally user penetration rate is on upward
trend. Below is the snapshot from July 2018 by eMarketer.
III. Netflix competitor and Business analysis
A, Netflix competitor analysis
Netflix as a company has many challengers. There are threats from all sources of video sharing
medium including cable, DTH, YouTube and other content sharing platforms. But in terms of
similar service the major competitors are Amazon prime video, Hulu, HBO now etc. there are
other players too in the market in similar category who offer similar service but the major threat
comes from Amazon prime. If we were to analyze each of the services we can see that all of
them are different level of maturity ad market share. Netflix leads the market and is a leader
across most of the markets across the globe. Amazon prime video has been growing steadily over
last few years and have added lot of content to the library. The expansion plan led by Jeff Bezos
has threatened the market share considerably over the last few years. The membership plan and
the costs are also favorable in Amazon`s case as compared to Netflix. Hulu has been a content
provider for almost a decade and has now entered the consumer segment too. They too have
come as a threat to Netflix due to their unique content and have targeted such customers. HBO
now has exclusive access to HBO studios and this provides them first rights to showcase all the
latest movies produced by the studio. In addition to this, there are major threats from cable tv,
DTH services, theater, cinema, YouTube etc. In spite of all these threats Netflix has emerged as
the leader due to the features they provide and the services they offer.
B, Business Analysis

Netflix as a business is heavily dependent on many external factors. The political and legal
changes can impact the business hugely and can cause many issues in terms of growth and
sustainability. But there is another major player who has a huge influence on Netflix. – their own
content providers. Most of the content in the Netflix library is obtained from production houses
across the globe and they are the content creators. Even the exclusive shows Netflix produces is
creatively shot and edited by other partners. There is a huge ecosystem in the media world which
thrives on each-others success. And for Netflix the business model is the same. If we do a
detailed business analysis of the external industries which impact Netflix we see that IT industry
and changes in technology are huge factors. With any sudden change in the IT world the app and
platform can become obsolete and Netflix will have to upgrade the systems to ensure they are up
to the market demands. The other industry which has a huge impact on Netflix`s working is
internet companies and telecom industry players who provide the data for on the go access to the
content archive. If there is any major change in any of these firms, they can create huge impact
on the business and cause the entire Netflix business model to collapse. All content sharing is
based on long term sustainability of these three players – content providers, technology partners
and Data service providers. If there are any changes in any of these the business can go down
into lockdown mode.
IV. SWOT Analysis and PESTEL
A, SWOT

Strengths:

1. Acquired larger group of consumers.

2. A new phase for the consumers to enjoy what they want.

3.Captured a big segment of market.

4. Focus on consumer governance.

Weakness:

1. It is wholly based upon the availability of internet.

2. A larger number of competitors are also prevailing in the market so the company must focus on
the new and innovative ideas to make a place for itself in the market.

Opportunities:

1.Can generate a larger revenue by targeting those segments which like there type of media
anywhere and anytime.

2. By issuing shares in the eMarket the company can even generate a larger number of capitals to
establish the business.

3. Can also explore the market which are unexplored by any kind of this media.

Threats:

1. Larger number of competitors.

2. Based upon the electronic media.

3. Piracy can be easily done.

B, PESTEL

Political Factor

An investigation into the Singaporean market discovered that political hazard is genuinely low in
this nation. Shamim brought up that the investigation led by Political and Economic Risk
Consultancy held that Singapore encounters the most reduced rate political hazard in Asia.
Singapore is one of the law-based nations of the world and permit reasonable business play area
for both nearby and worldwide organizations. The constitution enables individuals to equitably
choose their delegates who will lead them at different locales. Rodney opined that since its
freedom, Singapore has delighted in high political security which is useful for new global
organizations. Harmony in the nation has a made open door for working together.
Notwithstanding, Tan likewise placed that Singapore government confine free discourse specific
from the resistance. This implies Netflix must be cautious on their announcement to maintain a
strategic distance from slander and legitimate suit which could be impelled by the administration.
The legislature of Singapore does not carefully edit web; however, it maintains rundown of
various sites which are significantly obscene.

Economic Factors

Another examination did by Political and Economic Risk Consultancy guaranteed that the
Singaporean economy is a free-advertise and a dynamic economy. The nation is growing quickly
and giving chance to outside business to benefit from. The per-capita pay of Singapore is the
appraised as most astounding in the ASEAN. As a nation which is likewise free from defilement,
its business condition supports the development of organizations. Netflix will work reasonably
without being compelled to part with influences which ordinarily increment expenses of activity.

In current years, Shamim asserted that Singapore has moved toward becoming assessment safe
house place for some affluent individuals in view of a low rate of expense dependent on the duty
exclusions on the remote based capital additions and pay. The circumstance has made an open
door for Netflix to contribute and acknowledge more benefits. Low expense guarantees that
nation has low expenses of activity while expanding its incomes.

Social Factors

In the social point of view, Singapore is an Eastern nation which is ascribed with Eastern culture.
Notwithstanding, in the ongoing years the more youthful age has slanted towards western
qualities and culture with the occupants striving to fulfil their realism wants. Rodney asserted
that English which is a western language is the second broadly spoken language in Singapore
and significantly used to lead organizations in government and private segments. The education
level has expanded and most classes are instructed in English. This is a favourable position to
Netflix which significantly bundles its administrations in English consequently Singaporean will
think that its simple to peruse guidance when they need to buy in and stream online motion
pictures or news.

Shamim expressed that the number of inhabitants in Singapore is gradually yet without a doubt
developing with normal age being 39.4 meaning youthful grown-ups. Netflix items are prevalent
among adolescents and youthful grown-up subsequently the organization is probably going to
turn into a solid brand in Singapore. An examination into the salary has uncovered that
Singaporean is a high pay nation with numerous individuals having high extra cash to buy
extravagance items and administrations

Technological Factors

There has been a developing pattern in technological selection in numerous nations. Papies and
Clement announced Singapore is one of the nations which encounters technological patterns like
increment reception of web, rising utilization of cell phone and use of innovation in business and
web-based shopping. The pattern exhibits a chance to Netflix which relies upon appeal of
innovation, web and motion pictures among its clients in its objective market.

Today, the data and innovation foundation of Singapore can be professed to be acclaim
commendable. The rate of the broadband web in the family unit is currently in excess of 70 per
cent. Subsequently, Makos guaranteed that eB2C and E-business models have improved
impressively over the most recent five years. IT framework and rapid web of over 10Mbps of
broadband have pulled in increasingly worldwide firms to set up outlets Singapore. Makos
hypothesized that in 2014, the ViewQwest set up designs to disclose fibre 2Gbit/s broadband
web access for the Singapore families giving the quickest association of web in the nation. The
administration was formally propelled in mid-2015 positioning it the quickest family broadband
web on the planet alongside Japan. In any case, Netflix should likewise dependably enhance to
abstain from being surpassed by other market players in Singapore, for example, iFlix, Hulu,
Amazon and Hooq.

Environmental Factors

Business particularly delivering of items has expanded concerns environmental debasement. In

spite of significantly an online business, Netflix still ships a few DVDs to different nations which
dirty the earth through oil spillage. Singapore is one the countries been in the bleeding edge to
the battle atmosphere in view of its past record as one of the nations which had been contributing
profoundly to carbon emanation into the climate. Truth be told, the legislature through the
National Environment Agency presently needs remote organizations entering its market
demonstrate its duty to battle environmental change. The activity additionally needs innovation
organizations to demonstrate that their items won't dirty the earth after transfer. Seetharam et al.
expressed that Netflix has anyway demonstrated its promise to moderating negative impacts of
contamination by turning to mail conveyance framework and live spilling framework which
utilizes less vitality and furthermore doesn't dirty nature.

Legal Factors

The Singaporean government accepts that electronic trade development depends vigorously on
market guidelines, enactment and straightforwardness. In this way, the administration has set
specific legal and administrative laws and arrangements which bolster electronic business morals
and improvement. The E-trade plans were imitated in Singapore in 1996 with headway occurring
somewhere in the range of 2008 and 2015. Internet providers in Singapore are offered by 3 key
Internet specialist co-ops which are frequently directed by Media Development Authority. This
body guarantees reasonable play and media morals are clung to. For example, Media
Development Authority squares baseless locales like Playboy. The administration of Singapore
additionally executes protected innovation laws to empower business to appreciate and
advantage from their substance. Mako’s inspected that Netflix focuses on gushing media, DVD
rental and web substance which exceedingly confronted robbery and scholarly burglary thus the
law will defend the company's task in Singapore.
V. Five forces analysis

Michael Porter observed five forces that have significant impact on a firm's profitability in its
industry. Managers at Netflix, Inc. can not only use Porter Five Forces to develop a strategic
position with in CATV Systems industry but also can explore profitable opportunities in whole
Services sector.
Threats of New Entrants: New entrants in CATV Systems brings innovation, new ways of doing
things and put pressure on Netflix, Inc. through lower pricing strategy, reducing costs, and
providing new value propositions to the customers. Netflix, Inc. has to manage all these
challenges and build effective barriers to safeguard its competitive edge.
Bargaining Power of Suppliers: All most all the companies in the CATV Systems industry buy
their raw material from numerous suppliers. Suppliers in dominant position can decrease the
margins Netflix, Inc. can earn in the market.
Threats of Substitute Products or Services: When a new product or service meets a similar
customer needs in different ways, industry profitability suffers.
Rivalry among the Existing Competitors: Netflix, Inc. operates in a very competitive CATV
Systems industry. This competition does take toll on the overall long-term profitability of the
organization.
VI Environment Analysis

Netflix operates in a very dynamic environment where the business is heavily dependent on the
external partners and the technological changes. The content they have accumulated or gained
rights to share also have geographic limitations. They are also affected by political constraints
placed on them by the US government. The content that is obtained from any production house
or a content provider always comes with a rights limitation to it. They can be shared only in
certain countries and that too only for a certain period. In certain areas the content needs to be
modified or censored so that it can be shown. Certain countries in middle east and China are two
prominent regions where censorship is highly used. Netflix as an organization has invested
heavily in getting new content and adding more variety to the library. But monetizing these
contents is a challenging aspect especially in the international markets. As the dollar value
fluctuates there is often an unplanned movement in terms of revenue generation. But the positive
for Netflix is that the number of subscribers have increased significantly over the last few years.
This is the industry in which they operate and this forms a very challenging aspect of business.
Reference

https://en.wikipedia.org/wiki/Netflix
https://www.cukashmir.ac.in/docs/MBA%20C%20402%20Unit%20II.pdf
http://fernfortuniversity.com/term-papers/porter5/analysis/3012-netflix--inc-
.php