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.
Won-Yong Oh and Duane Myer
Harvard Business Review (W16236-PDF-ENG)
April 26, 2016
Case questions answered:
Case study questions answered in the first solution:
- 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.
- 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?
- Imagine yourself as a Chief Human Resources Officer of Netflix and decide on the staffing policy you will use for top-level managers. Would you hire a) PCNs, b) HCNs, or c) TCNs? What would be your rationale for choosing this policy? What would be the potential disadvantages of your chosen staffing policy?
- Conduct a strengths, weaknesses, opportunities, and threats (SWOT) analysis for Netflix. Moving forward, provide strategic suggestions to the current CEO Hastings based on that analysis
Case study questions answered in the second solution:
- Analyze the global profitability of the industry in which Netflix operates. Use the model of Porter’s five forces.
- Perform an analysis of Netflix’s strengths, weaknesses, opportunities, and threats (FODA). Provide strategic suggestions based on that analysis.
- Define Netflix’s competitive advantage. Why is Netflix so successful?
- How would you recommend that Netflix overcome its challenges in the international market?
- In the future, what strategic actions might Reed Hastings consider?
Not the questions you were looking for? Submit your own questions & get answers.
Netflix: International Expansion Case Answers
You will receive access to two case study solutions! The second is not yet visible in the preview.
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.
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…
Unlock Case Solution Now!
Get instant access to this case solution with a simple, one-time payment ($24.90).
- You'll be redirected to the full case solution.
- You will receive an access link to the solution via email.
Best decision to get my homework done faster!
MBA student, Boston