MN6003 Strategy: Choices and Change

Assignment 2: Strategy Decision-Making Netflix in India

Student name: Daniel Toshev

Student number: 10119046

Word count: 2037

 Executive Summary:

In the United States, Netflix is the top provider of video-on-demand services. With
time, the company moved into European markets, supplying licenced products to
both areas at the same time. It developed a premium offer strategy for clients in the
United States and Europe in order to give visual content on demand. It created three
levels to cater to and target three distinct categories of clients in the market, called
Tier-1, Tier-II, and Tier-III. In order to improve its services, the corporation began
developing its own material, which included the development of its own series. It
includes House of Cards and Orange is the New Black, to mention a few commercial
superstars. This significantly lowered reliance on content sources in the United
States and Europe. The company extended its activities in India in 2016 with the
Друга опция, която вярвам, че ще помогне финансово на, е да предоставя
стрийминг само на мобилни устройства в Индия, за да спести пари и разходи.
Тъй като цифровото потребление и стрийминг на мобилни устройства са
толкова популярни в Индия, има смисъл компаниите да намалят разходите по
този начин. Ако Netflix успя да елиминира скоростта на предаване на данни за
поточно предаване на услугата си, вярвам, че тази алтернатива би била за
предпочитане от поточно предаване на компютри или телевизори. Живеем в
мобилно общество; по този начин предоставянето на стрийминг услуги
предимно на мобилни устройства ще отговаря на изискванията и очакванията
на индийското население, което съответства на такава тенденция.
 The CEO of Netflix:

Netflix се превърна в световен феномен, в който хората получават

възможността да предават най-популярните филми, телевизионни предавания
и дори да доставят DVD-та до домовете си срещу ниска месечна такса.
„Компанията има абонатна база от повече от 117 милиона членове в 190
страни по света“ (Харингтън, 2019 г., стр. 5). Те предлагат различно
разнообразие от пакети, които можете да получите в зависимост от броя на
екраните, на които искате да предавате техните услуги, а също така имат
възможността да добавят DVD услугата към вашия пакет, ако искате срещу
допълнителна такса.ао ао а о ао а оъ э жоа ъ жо ж ожож жоа эф эъ ъэ о ъэ
фэъ э ъжоъээъфэъ фъэ ож эъфэъ жоъ о жъ ээъ фэ ъфэфэ фэ ъж фэ фэ ф эфэ
фэъфъэжл

Porter’s Five Forces:

 Statement of the Problem:

The firm is encountering hurdles in building a solid market entrance strategy in India
owing to the presence of poor infrastructure, poor internet connectivity, a lack of local
content, and censorship concerns, all of which are impeding the company's growth in
the Indian market.
 Secondary Issues:

Despite the fact that the number of smart phone users is growing, the organisation is
having trouble finding fast internet. The limitless broad band plan degrades the speed
accessible to each user and hence has a negative influence on the company's overall
operation. Local TV material is widely consumed; thus, the firm confronts challenges
in convincing the target demographic to switch to the Netflix VOD model while cable
internet is inexpensive in the market.

The company is reliant on local content producers to provide material to Netflix,

which is tough to obtain in the face of Hotstar and EROS due to their market
dominance. There is an obvious disconnect between the content provided by Netflix
and the choices or preferences that the Indian population has for entertainment
purposes.

Finally, the censorship board is a difficulty for the firm since the company's business
model and goal promote the freedom to watch and what to view, and it defies the
censorship board regulations when developing material. Such opposition makes it
difficult to construct a full-fledged plan to properly cater to the market.

The company has a powerful designer label and well-established brand recognition in
the market, which allows it to stand out from rivals. It delivers a wide range of content
through three sorts of offerings and caters to a wide range of clients by delivering
content in many languages. It adapts its offerings and content to market demands.
The company has the ability to create its own information for the market in which it
operates. Netflix has a strong technological basis and an inventive foundation to offer
the Indian market in a low-cost, high-value manner (Arthur A. Thompson, 2012).
International Strategy:

Netflix has not only controlled the US market but has also made significant efforts to
grow abroad to other nations. In order to address the streaming demands of these
potential clients, their worldwide plan includes spreading its offering to these
additional nations. As a result, international revenues have surpassed US market
sales, transforming Netflix into a worldwide company. The corporation has long been
well-known in the United States, and it appears that Netflix is just recently started to
achieve worldwide traction (Uttley, 2018). In the first quarter of 2018, the firm
recruited 5.4 million members from across the world and just 2 million members from
the United States, representing a 50% increase over the previous year. (Uttley,
2018). "This has prompted some analysts to anticipate that by the end of 2020, the
corporation will have attracted an additional 70 million customers to its services,
mostly due to overseas expansion" (Uttley, 2018, p.5).

Netflix also distinguishes itself in international markets by offering a diverse range of

material to its users. In the beginning, the company's programming was mainly
geared toward the US market, with English being the primary language in which to
watch the shows. Now, the firm plans to invest roughly $8 billion to show all of its
information in other languages in order to attract to people in other nations across the
world (Uttley, 2018). Netflix's decision to grow to clients all over the world has had a
significant influence on widening its demand to a variety of various areas (Uttley,
2018). "By the end of 2018, CFO David Wells hopes to have 700 TV shows available
globally, as well as 80 original projects that will be non-English and not produced in
the United States" (Uttley, 2018, p. 6). As a result, Netflix's worldwide expansion plan
addresses unique demands in various nations that are not currently being served.
Despite competition from streaming services like as Hulu and Amazon Video, Netflix
remains the market leader with Amazon has 71% of demand, whereas Hulu and
Amazon offer 11% and 9%, accordingly (Weprin, 2019). If Netflix were not found,
there would be little of a streaming business today. Most individuals have grown
addicted to Netflix and choose it over alternatives streaming services due to the
range of entertainment offered. Netflix does not feel the need to cut its rates since the
streaming service looks to be in demand, despite of how much it costs the client,
because Netflix has a high requirement compared to other streaming providers.
 Weaknesses:

Netflix is among the most popular streaming services, but there are still several
issues they need to address before they can fully dominate the market. First off, they
charge more than the majority of their competitors. This year, Netflix increased its
prices in the US, raising the regular plan's price from $7.99 to $8.99, the two-screen
plan's price from $10.99 to $12.99, and the deluxe plan's price from $13.99 to the
current $15.99. (Blumenthal, 2019). As a result, Netflix has given competitors a
significant advantage in capturing potential consumers who may quit Netflix due to
price rises. In India, Netflix pricing remain unchanged at $7.35 for the basic plan,
$9.55 for the standard plan, same, the premium plan costs $11.76. (Sharma, S.,
Srivastava, Chandoke, & Prakash, 2016). Raising their charges would be foolish
because the company is now working to expand its operations and compete against
other companies in India (Pathak, 2019).
 Analysing India's Competitive Environment:

В момента Netflix доминира в индустрията за стрийминг услуги през последните

три години. Техните приходи са се увеличили драстично между годините 2016-
2018, което ги прави силна сила в тяхната индустрия. През 2016 г. приходите
възлизат на 8 830,67 милиона долара с брутна печалба от 2 800,77 милиона
долара (Harrington, 2019). През 2017 г. генерираните приходи бяха 11 692,71
милиона долара с брутна печалба от 4 033,05 милиона долара (Harrington,
2019). И накрая, през 2018 г. приходите бяха 15 794,34 милиона долара с
брутна печалба от 5 826,80 милиона долара (Harrington, 2019). Както можете да
видите, приходите на Netflix се увеличават всяка година, следователно
изглежда има определена нужда и желание за това, което Netflix може да
предложи на своите потребители. Эоа жо о о о о о о о жожгэ эг ж жгтгж жо
гжо г жг жо жо гжо г ж г жэф хэф гжо гж г жллл.
 Important Concerns:

В момента Netflix доминира в индустрията за стрийминг услуги през последните

три години. Техните приходи са се увеличили драстично между годините 2016-
2018, което ги прави силна сила в тяхната индустрия. През 2016 г. приходите
възлизат на 8 830,67 милиона долара с брутна печалба от 2 800,77 милиона
долара (Harrington, 2019). През 2017 г. генерираните приходи бяха 11 692,71
милиона долара с брутна печалба от 4 033,05 милиона долара (Harrington,
2019). И накрая, през 2018 г. приходите бяха 15 794,34 милиона долара с
брутна печалба от 5 826,80 милиона долара (Harrington, 2019). Както можете да
видите, приходите на Netflix се увеличават всяка година, следователно
изглежда има определена нужда и желание за това, което Netflix може да
предложи на своите потребители. В момента Netflix доминира в индустрията за
стрийминг услуги през последните три години. Техните приходи са се
увеличили драстично между годините 2016-2018, което ги прави силна сила в
тяхната индустрия. През 2016 г. приходите възлизат на 8 830,67 милиона
долара с брутна печалба от 2
 Recommendations:

A critical problem that Netflix must solve in the next two to four years is the need for
additional original content for Indian consumers. Because the Indian people want and
need original material, Netflix needs to up its game in delivering it to members. Netflix
is still nowhere near this offering with Bollywood being so popular and now producing
thousands of original movies per year. They have only produced one original show
and eight unique films since entering the Indian market (Mitter, 2018). Netflix needs
to make more innovative movies if it wants to rival other streaming services, rival
Bollywood, and live up to that standard.

I feel that one of the primary reasons Netflix is not as popular as it might be in the
Indian market is due to the pricing they charge for their services. I believe it would be
extremely beneficial for the corporation to pursue a cost leadership approach in the
Indian market. With so many other rivals providing cheaper costs for streaming
services, Netflix is more likely to be neglected, even if they offer a product that is
distinct from its competitors. Because their product is already distinct, it makes sense
for Netflix to fight on pricing with other rivals because it is something that other
competitors provide that they do not, giving them a competitive advantage.

I also think that limiting Netflix's streaming service to mobile devices just in India will
help it financially and save money. It makes sense for businesses to do this because
multimedia traffic and broadcasting on portable devices are so common in India. I
think this alternative would be superior to streaming on pcs or televisions if Netflix
could manage to abolish data rates for their service. In light of the fact that we
currently live in a mobile society, providing streaming services largely through mobile
devices would be in line with the needs and expectations of the Indian population as
well as this trend.
 References:

Baxi, A. (2017, December 20). India's Video Streaming Market Is Growing Faster
Than Ever, and Here's Who You Should Keep an Eye On. Retrieved from
https://www.forbes.com/sites/baxiabhishek/2017/09/30/indias-video-streaming-
market-is-bigger-than-ever-and-heres-who-you-should-keep-an-eye-on/
#60a2c4217cda

S. Bengali (2018, March 03). As Amazon and Netflix compete in India, big-budget
television meets Bollywood. The article was extracted from
https://www.latimes.com/world/asia/la-fg-india-netflix-amazon-2018-story.html.

A. Madhavan (2017, October 20). How Netflix Fell Far Short of Amazon in India |
Backchannel. Retrieved from https://www.wired.com/2017/01/how-netflix-lost-big-in-
india-to-amazon/

M. Rahman (2018, December 18). Netflix's SWOT analysis. Obtainable at

https://www.howandwhat.net/swot-analysis-netflix/.

A. Weprin (n.d.). Netflix dominates the market for subscription streaming video.
Retrieved from https://www.mediapost.com/publications/334116/netflix-dominates-
subscription-streaming-video-mar.html.