Netflix Case Study PDF

Preview

Summary

notes for Netflix case study for group assignment...

Description

External Analysis: The external analysis of Netflix and their operating industry will be analysed

using

the

seven

factors

that

influence

their

working

environment. Whilst the industry environment will be analysed using porters five forces.

PESTLE: The political/ legal aspect of the digital entertainment industry plays a critical role in a company’s potential for success as different countries have different regulations on censorship and age ratings for streaming services. For example, Netflix is not available in North Korea and Syria. Of the 190 countries that Netflix operates in more than 130 have censorship restrictions. The USA has the most extensive catalogue available as little to no restrictions are imposed. As a result of this users seek alternative avenues to view Netflix content illegally through avenues such as VPNs and torrents. As a result of this many governments globally have introduced piracy and illegal streaming legislation in an attempt to mitigate this problem. That been said, there is less regulation in streaming services as the viewer is not monitored for age and anyone can access the account if they know the login credentials. The economic aspect of the digital entertainment industry relies heavily on relevant corresponding events and consumer preferences. As the subscription service is a discretionary good, in counties that experience economic downturns growth is slowed. Although that been said global pandemic, COVID19 saw Netflix’s first quarter growth exceed expectations, with around 16 million new global subscribers. Netlfix’s most dominant markets are developed countries such as USA and the UK as Netflix is viewed as a luxury good. The social/cultural aspect of the external environment has benefitted many companies within the industry as the global accessibility to the internet has allowed more demographic groups to be reached. Thus, with a wider spread company must consider cultural diversity and adapt their services to meet the unique beliefs and needs of various

cultures. Further, the rise in equal rights and free speech has meant that the industry has experiences pressure to conform their services to social norms.

The technological advancements made within the last decade has greatly benefitted the industry with the rise of apps and the internet. Continuous advancements in internet speeds and accessibility have allowed those in developing countries to access the service. Social media has played a vital role in the success of Netflix as they have employed creative marketing strategies along with partnerships with large producers to appeal to the largest audience. Further, technology has meant that industry can employ from around the global creating a diverse workforce and creating greater access into new markets. Globalisation meant that industry was able to access new markets and source cheaper alternatives, to reduce costs and maximise profits. Further, technology has enabled companies to remain innovative and increase efficiency throughout their value chains. The physical aspect is one that is at the forefront of concerns for many firms in the industry. As the rise of phenomenons such as global warming and climate change has meant that consumers have become more conscious of what they consume and have a sustainable outlook for their food and products they consume. The global aspect of the digital entertainment industry has made groundbreaking progress in the last decade as the internet has allowed consumers to access services with a few simple clicks. Further, it has provided a platform for the industry to expand into emerging markets and access a larger customer base. Entertainment is one industry that is heavily influenced by current world problems and is a reflection of current culture.

The target demographic of many meal kit businesses is young to middle aged individuals as they often are time poor and seek convenience when choosing meals. The flexibility that meal kits provide attract both single and families to purchase their products, as they are often time poor. With the meal kits delivered to the door it relives that daily stress.

Porter five forces

Description

Threat from

There is a moderate threat of new entrants as the entertainment industry already

new entrants

companies which cannot be outperformed easily. There is a requirement for huge investments and access to large content to start online streaming services. Howev can come up with cost-efficient technology and changes in the industry that may customers but new entrant still face difficulty in getting supplier contracts for con

Bargaining

Customers have high power because there is a presence of a number of surviving

power of

national and international levels and customers can easily switch. Low switching c

buyers

companies from charging huge prices from customers and maintain high service q the customers.

Bargaining

The suppliers also hold high power in their hands because Netflix gets most of its

power of

third-party production houses and producing media. Netflix competes against oth

suppliers

providers to get better content and negotiate high prices with suppliers such as C Gaumont Film Company, RTL Group, etc. which differ in different nations as per th local content.

Threat of

There are many ways of entertainment where some people still prefer TV shows a

substitute

Cinemas for movies etc. The rental DVD products by Blockbuster etc. are still in th

products

impacts the business of Netflix.

Competitive

Netflix is facing severe rivalry from Amazon prime, HBO now, Hulu, Disney, etc., w

rivalry

known in the market However, Netflix already has an advantage of a high number

as a first mover to online streaming which cannot be outperformed easily

Netflix’s Opportunities and Threats (External Analysis) Opportunities:

1. Growth through expansion of product mix

2. Penetration in new markets

3. Business diversification into other industries or markets

Threats:

1. Competition and imitation

2. Entertainment media/content piracy

3. Cybercrime...