ABSTRACT

Netflix Inc. is a pioneer in entertainment distribution that already has dominance in the
domestic arena. The company provides a personal touch by offering individualized packages that
appeal to the taste of a particular customer with its Cinematch algorithm. With tons of award-
winning content alongside old classics and popular TV shows, Netflix has a lot to offer at an
affordable price.

The company has incredibly grown throughout the years since its operations commenced
and continuously become a big player in the industry but the uncertainty of developing its
operations in foreign markets still concerns them.

Based on the analysis, Netflix should partner with local companies in the industry and
consider adapting their operations and contents itself to the culture of their target foreign market
that would further help them expand their operations globally.
 EXECUTIVE SUMMARY

Netflix is highly renowned as a pioneer in the home video entertainment industry in the
United States in 20101. The company offers a hybrid plan of DVD –by-mail subscription and
Internet-based streaming that allows the customers to watch a wide variety of award-winning TV
shows, movies, documentaries, and more on many internet-connected devices. People who
subscribe to Netflix can enjoy unlimited viewing of our content without having to watch a single
commercial.

The researchers identified the problem that Netflix is currently facing. The company is
trying to strategize to expand their market—globalization of their operations. Its problems include
the competitors and the cultural and legal barriers before they will be able to penetrate a foreign
market successfully.

The problems that the researchers have identified can be solved by fully utilizing the
strengths of the company such as the position of being the leader in terms of innovation architecture
of their business model, having algorithms, and the volume of titles and content owned. The
company has problems regarding the declining rate of demand for DVDs for movies and their
dependence on third parties which major changes in such can adversely affect the operations of
the company, and the easiness to imitate the business model of the latter. The company is taking
advantage of its strength to maximize the opportunities and avoid the identified threats the
company is endangered.

To overcome the existing problems of the company, the researchers have established four
alternative courses of actions: (1) Joint Venture, (2) Market Development, and (3) Market
Penetration. Among the three courses of action, after obtaining the results of the matrices used, the
first alternative, the Joint Venture strategy, is what we considered the best. The company will better
comprehend the culture of their target foreign market if the company chooses to coordinate with
the locals of that market. Therefore, it is clearly recommended to choose this Joint Venture strategy
to solve the company’s problem with expanding their market globally in the succeeding years.