Netflix Expansion Into Overseas Markets Case Study

Length: 5 pages Sources: 3 Subject: Business Type: Case Study Paper: #81315047 Related Topics: Globalization, Expansion, Investment, Middle Class
Excerpt from Case Study :

According to the article listed above, what were the most important strategic moves that propelled Netflix’s successful international expansion?

According to the article the most important strategic moves related to Netflix’s expansion were associated to its planning. First, Netflix did not attempt to enter all markets simultaneously. Instead, it elected to enter into markets that shared many of the same market characteristic of the United States. Namely, the company was looking for a strong rule of law as it relates to intellectual property, streaming rights and so forth. Next, the market needed a burgeoning middle class similar in to size and scope of the United States. The middle class needed a sufficient amount of discretionary income that was allocated to entertainment purchases. The middle class also needed to have strong employment figures throughout an economic cycle. The country itself needed to be innovative and have the streaming capabilities needed to deliver the Netflix service in a convenient manner. Aspects such as internet access, 5G implementation, and access to similar technologies was critical as it relates to the expansion plan of Netflix. As a result, the company quickly expanded into both Mexico and Canada. As immediate neighbors to the United States, both countries shared very similar economic characteristics and were therefore prime candidates for a seamless Netflix transition (Schechner, 2014).

Another important element with the expansion strategy of Netflix was related to how it worked cooperatively with foreign markets to deliver its services. To company formed strategic partnerships with local operators to distribute its products in foreign countries. The company also entered into strategic partnerships with cell phone and cable operators to make its content available as part of their existing video-on-demand offerings. This was important for many reasons. First, Netflix aligned itself with foreign operators to form mutually beneficial product offers. These partnerships benefited both Netflix and the local communities through high paying jobs, increased wealth, and a higher quality of life. Due to this, governments were less likely to impose restrictions on Netflix as it relates to its expansion efforts. The mutually beneficial arrangements also allowed Netflix to obtain market knowledge and consumer data that it can use to cater it’s offerings in the future. All of this is beneficial as it relates to future growth opportunities for the business (Segal, 2013).

The article mentions investments in big data and analytics as one of the elements accompanying the second phase of overseas expansion. Why was this investment important? What type of information did Netflix derive from the data collected?

According to many economic sources, data and its subsequent application will become one of the greatest resources for society to leverage. The applications of data and analytics will be vital to the future success of Netflix. The investment in data is important as it allows the company to leverage its product offerings in a manner that can drive future growth and subscribers. Analytics can allow the company to determine which shows are successful, when subscribers view…failed in the past.

Many companies’ expansion plans have failed due primary to hubris and a lack of local market knowledge. Many American companies believe their products are high quality and should therefore be demanded throughout the world. Although this true for certain companies such as Hershey, Coca-Cola, and Apple, many others such the US auto manufactures fail. Countries simply have different market dynamics, consumer tastes, regulations and values relative to the United States. Asian countries for example are more collectivistic by nature. They support the group over the individual. As such products that are more individualistic, such as Ford Mustang, will not do well as it focuses on entirely different value. Likewise many Middle Eastern countries, for religious reasons, do not eat hamburgers. McDonalds must therefore adjust its menu in order to properly serve the Middle Eastern market. Companies who fail to adjust, adapt, and learn tend to fail as it relates to their expansion efforts.

Part 2 Conclusions

From the date presented the company should allocated more resources to TiQ. The data indicates that the company is still above the industry standard of 2.5 minutes at a significances level of .05. A it relates to the correlation between PE and PT, it appears that the new protocols are working. In this instance, new protocols are much more effective than the traditional protocols at both a significance level of .05 and .025. This indicates that not only are the customer services reps more knowledgeable but they are…

Sources Used in Documents:

References

1. Schechner, S. (2014, Sept. 7). Netflix tries charm in France to smooth expansion; Online media firm also moves into Germany, Austria, Belgium, and Luxembourg. Wall Street Journal. Retrieved from www.wsj.com

2. Segal, D. (2013, Feb. 8). The Netflix fix. The New York Times. Retrieved from www.magazine.blogs.nytimes.com

3. Spangler, T. (2014b, Apr. 8). Amazon streams more video than Hulu or Apple, but it’s still miles behind Netflix. Variety. Retrieved from www.variety.com



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