Netflix

Questions:

1. Analyze the overall profitability of the industry in which Netflix is

operating using Porter’s Five Forces Model.

2. Conduct a SWOT analysis for Netflix, and provide strategic suggestions

based on the analysis.

3. Define Netflix Competitive advantage. Why is Netflix so successful?

4. How would you recommend that Netflix overcome its challenges In the
International Market.

5. Moving forward, what future strategic initiatives might CEO Hastings

consider.

Netflix: International Expansion

– Case Solution
Netflix: International Expansion case study focuses on
the company as it expanded and dominated the video
streaming industry all over the world. It discusses the
challenges the company faced with such expansion and
how it tackles such issues.

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 WON-YONG OH AND DUANE MYER
H A R VA R D B U S I N E S S R E V I E W ( W 1 6 2 3 6 - P D F - E N G )
APRIL 26, 2016

Case questions answered:

1. Analyze the global profitability of the industry in which
Netflix operates. Use the model of Porter’s five forces.
2. Perform an analysis of Netflix’s strengths, weaknesses,
opportunities, and threats (FODA). Provide strategic
suggestions based on that analysis.
3. Define Netflix’s competitive advantage. Why is Netflix so
successful?
4. How would you recommend that Netflix overcome its
challenges in the international market?
5. In the future, what strategic actions might Reed Hastings
consider?

NOT THE QUESTIONS YOU WERE LOOKING FOR? SUBMIT YOUR

QUESTIONS & GET ANSWERS.

Case answers for Netflix: International

Expansion
1. Analyze the global profitability of the industry in
which Netflix operates. Use the model of Porter’s five
forces.
The rivalry between existing competitors: High
Netflix was the most reliable company in the industry since its
inception. However, in recent years it faces a significant
challenge due to competitors who have decided to enter this
area as well. Some of them are Amazon Prime Video, HBO,
FOX, Disney, among others.

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 The primary motivator of users to subscribe to any of these
pages is the variety of their content. Hence, Netflix must
continue to increase its catalog. The company also needs to
acquire the rights to known films or series. This acquisition
would be in addition to continuing with the release of exclusive
material of the brand.

Power of negotiation with suppliers: Medium – Low

As mentioned in the previous point, the main attraction of

these pages is content, any company that does not always
renew its content and adds eye-catching material to users.
Unfortunately, it will no longer be eye-catching to customers
and unsubscribe. That’s why providers have high power over
Netflix, because, without the content they offer, the company
will lose many users.

However, Netflix realized this situation, and that’s why it

decided to start creating and launching its content, so it no
longer had to rely on 100% of the providers.

Trading power with clients: High

This factor is high because Netflix, over the years, has earned
a recognized name in the global market due to the correct
service provided. In 2015, they already had more than 74
million people who paid for a monthly subscription. Netflix
gives them a diverse variety of movies, series, documentaries,
among others for entertainment purposes, with the ease of
which platform gives you options based on your history or your
preferences. It should be noted that Netflix, a few years ago,
started releasing exclusive content that will only be available
on the platform, which makes it more eye-catching for the
industry.

Threat of new entrants: High

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 As a growing market, many large companies want to enter this
area. Companies like Cinepolis or Google Play are some of the
ones that have adapted their business model. They are looking
into being able to offer a service similar to that of Netflix.

On the other hand, the big film producers, companies that are
currently providers, can also be a significant threat if they
decide to enter the market under their own name, as it would
be taking away content attractive to users.

As an additional factor, potential competitors in each country

that decide to launch their content platform for a specific
geographic sector should be analyzed.

Substitute threat: High

While it’s true that Netflix provides a good entertainment

experience on the internet or in the different media, there are
countless options to choose from, and Netflix becomes one
more option within them.

Reading books, tv, or listening to music are some of the actions

that can replace the service. This factor would also include
entertainment options such as cinema, theater, fairs, among
many other options, but due to the current juncture by the
COVID 19, these are not considered.

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