Netflix: International Expansion – Case Solution

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Netflix: International Expansion Case Answers

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1. Describe the market, legal, cultural, and/or institutional environment in which Netflix operates and the critical operational factors that you must consider and how they will affect your company’s success in globalization.

Netflix’s business strategy is reliant on complete Internet connectivity; its effective incorporation and exploitation of the Internet in competing with, and then overcoming rivals (Blockbuster) in the home entertainment sector and building a reputation for itself at a global level.

Market and Institutional Environment

Changes in how people watch television and movies have resulted from the rise of the Internet television and multimedia industries. The growth of smartphones on which to view material over the internet has benefited the industry as a whole. While a handful of corporations have historically controlled the sector, many others have eyed the lucrative online video-streaming market as a place to grow.

While Netflix still held a substantial piece of the market, other new competitors with distinct advantages have altered the playing field. Hulu was one such business; it was a division of Hulu LLC, which itself was a partnership between Disney, NBC, and Fox. Conceived and introduced in 2006, new competitors included international information technology corporations that widened their scope of operations to include the online video-streaming market.

One such company is the online retailing behemoth Amazon, which leveraged its massive user base, well-known brand, and robust computing infrastructure to introduce its Amazon Video service.

Legal and Operational Factors

Netflix, as an American firm, was nonetheless bound by laws and regulations enacted by the United States government. For example, its expansion to countries like Syria was noticeably absent from its growth announcement in January 2016 as a result of these limitations.

It is crucial to research government legislation that could have an impact on the company before expanding into a new market. Data security has become increasingly vital as technology has progressed. Customers in that country need to have their rights to intellectual property, consumer protection, and data security respected. Similarly, users often share credentials with one another, therefore simultaneous streaming on many devices should be monitored.

Copyright issues pose the greatest threat to Netflix. Therefore, it is imperative that they obtain the appropriate licensing for the television shows and movies they are airing.

They may also have trouble meeting local ownership requirements for content streaming services in some jurisdictions outside the country where their headquarters are located. Netflix must also employ a number of technical measures to prevent content theft by users in different jurisdictions.

Operational Factors

When a company’s quick growth allows it to enter profitable markets abroad, they are said to have “gone global. The critical operational factors Netflix must keep in mind during international business are considering the social differences, laws, and regulations regarding online business, recruiting local employees, and consideration of financial costs.

By considering and evaluating all these factors, the company would be better able to achieve its goals in a new market.

2. Discuss the kinds of communication problems managers sent from their home country (i.e., United States) might face in the host-country market, legal, cultural, and/or institutional environment. How should they prepare for and deal with these problems?

Managers from their home country can face several problems in…