University Of Southern Denmark, Campus Exam number: 4111037

Faculty Of Business and Social Sciences Date: 07-Jun-2022

Business Strategy June 2022 Exam

This exam answer is prepared by: Supervisor:

Exam number: 4111037 Stephan Billinger
MSc in Economics and Business Administration - Kevin Du
Management Accounting, 2nd Semester
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

Assignment 1

What are the strategies of Netflix and Disney in the market for streamed video entertainment? (30
points)

Answer: Netflix and Disney are known as the major players in the streamed video entertainment
industry. Since both these companies have similar ambitions for leadership in video streaming and
similar market capitalizations, however; they impose different strategies while operating their
companies.

The strategy of Netflix in the market for streamed video entertainment is given and discussed below:

• International expansion: The success of their initial operation in USA leads them to target
other markets in the world following the neighbouring countries Canada, Mexico, Europe
(United kingdom, Ireland, Scandinavia). It is later seen that most of their subscribers are from
outside of the USA and Canada. So, they started to expand their market to Asia as well. For
e.g., they have partnered with Baidu’s iQiyi for global coverage, but it was not successful as
they planned.

• Diversification: Netflix first started as a mail order DVD rental company and later they
switched to monthly subscriptions. Later with the looking at the market demand and the
market situation, Netflix started distributing movies through internet and they offered a
limited range of old movies and Tv shows, and they expanded their licensing dals with the
content owners.

• Blue Ocean Strategy: Netflix can be the perfect example of applying the Blue Ocean strategy
as they have been successful in creating uncontested market space. They have made a huge
impact in the innovation and the digitalization of the technology and applying that
digitization in the current market.

The strategies of Disney in the market for streamed video entertainment is given below:

Diversification: Disney first started as a company producing animated movies by brothers walt and
Roy Disney and then it diversifies into live action movies, film distribution, theme parks, TV
productions, Cable Tv, Broadcast Tv, local TV station, video games, hotels and resorts, real estate
development, retail Disney stores, and consumer products.,

Acquisition and partnerships: Disney have applied the growth strategy and much of its growth has
been through acquisition. It has also expanded internationally counting as the theme parks in
different countries in the world. Moreover, Disney has formed partnerships with media and
communication companies to expand the market penetration.

Assignment 2

1
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

What resources and capabilities are needed to compete within this industry? In relation to these
resources and capabilities, assess the positions of both Netflix and Disney. (40 point)

Answer: To compete in any industry and to gain the competitive advantage in general firms need to
attain these resource and capabilities as:

Basically, any firms that wants to excel in this industry need to have the enough resources as in the
assets and the investors as well the human resources who have the knowledge in optimally utilizing
the available resources. Moreover, the organizational structure and culture also a vital role in
extracting the skills and knowledge the people that are working in their firms. The proper
organization structure and working environment determines the motivation to innovate and create
new idea and products and compete in the industry.

We can say from the case that the Netflix and Disney have also use this resource and capabilities to
some extent to gain the competitive advantage in this industry. The positions for both Netflix and
Disney are assessed below:

Resource and capabilities Netflix Disney

Financial • It has expense of • However, Disney’s
around 13. 6 as shown spend 11. 0 which is
in table 1 which means probably less in
that Netflix have comparison to Netflix.
invested lot of money • The monthly
on production and subscription fee of

2
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

licensing to expand Disney is less which is

their market.
• And to recover their
costs their monthly
subscription is also
high in comparison to
Disney which is $13.99.
directly related to their
level of investment in
the production and
licensing.

Technology • Netflix have been able Disney is not found to be much

to utilize the available in technological advancement
resources in as compared to Netflix as
technological Netflix was the who used to
development and dominate the video streaming
innovation in entertainment.
technology. Along with However, Disney launched
the market demand ESPN Plus, a streamed version
and change in time, of its ESPN sports cable
Netflix can serve it channel in April 2019. And this
satisfy its customers as ESPN used the streaming
Netflix used the technology platform of
algorithms to help BAMTech, which had been
views to choose and acquired by the Disney in
select what they 2017.
wanted to watch.
• Customization: Netflix
creates its own
thumbnails that are
designed to optimize
user’s selections and
are customized to
viewer’s characteristics
rather than the use of
the artwork or still
photos created by the
producers.
• Netflix also relies
heavily on
experimentation in the
technology to generate
data and product
innovation.
Management style • Netflix’s management
style is unconventional
as titled as no rules.
Here, the staff have

3
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

much freedom, they

face no limit on holiday
nor do they need
expenses approved.
• They are also satisfied
with their payments as
they are paid more
than their market rate
and they are
encouraged to take
risks and the more the
riskier the more the
profitable.
• Additionally,
transparency and
openness are followed.

• Thus, in this type of

organizational
structure, employees
tend to be more
creative and innovative
and have much more
confidence in
portraying their ideas
and thoughts since
they don’t have the
feeling of rejection or
being criticise by the
fellow employees.

3. Generate strategy implications for how each company can exploit its key strengths while
protecting itself from its key weaknesses? (30 points)

Answer: Each company can exploit its key strengths while protecting itself from its key weaknesses
through the strategy implications.

4
 University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

High
Superfluous Strengths Key strengths
Relative strength

Zone of Irrelevance Key weakness

Low
High
Strategic Importance’

Exploiting key strengths of NETFLIX

They key strengths of Netflix would be its engagement with its customers through the service like
personalization, customization, accessible in most parts of the world and the availability of wide
range of movies and TV shows then the implications would be to make it available in every part of
the world as most of the countries in Asia still don’t have access to Netflix as they must use the
Netflix account of other people residing outside their Country. Also, the other implication would be
not to limit the movies and tv shows and add the different genre of shows and movies as sometimes
the tv shows and the movies are not available in the Netflix which tends to be available in Hulu and
other streaming entertainment channel.

Exploiting key strengths of Disney

The key strength of the Disney is its brand as it is loved mostly by the children who are influenced
by the Disney characters and the company’s capabilities in the design and operation of the theme
parks. The implications would be that the Disney must expand its theme park activities in locations
other than (Tokyo, Paris, Hongkong, shanghai, Anaheim, Orlando) which have the market potential
for customers presence in every month and every seasons.

To exploit these key strengths, one need to manage their key weakness or convert this weakness
into strengths.

Managing key weakness of Netflix

Netflix main weakness is the gap in the global coverage in China where a partnership with Baidu’s
iQiyi was terminated in 2018. About this, Netflix need to come up with the local tv shows with the
local language which enhance the local culture of that area which is basically called as localization
and these shows and movies that are in the local language can be made available in different
languages as dubbing or by the services of substitutes for different language.

5
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

Managing key weakness of Disney

The key weakness of Disney would be the lack of content as it only covers the animated movies and
shows related to Disney, dc, marvel, etc. it needs to come up with new content as in the available
of other genre of tv shows and movies besides that are related to Disney. Also, Disney need to focus
on updating the advance user interface like the Netflix.

6
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

7
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

8
University Of Southern Denmark, Campus Exam number: 4111037
Faculty Of Business and Social Sciences Date: 07-Jun-2022

Technology
Organization and management
Marketing
Distribution system