VIETNAM NATIONAL UNIVERSITY, HANOI

INTERNATIONAL SCHOOL
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯

EXAMINATION
Final Assignment

Lecture: Nguyen Phuong Mai

Course Title: International Strategic Management

Class Code: INS 4003.02
GROUP 9

HaNoi, 2023
 GROUP PROJECT CONTRIBUTION EVALUATION

No Full name Date of Student ID Contribution Signature

birth level

1 Nguyễn Minh Anh 28/06/2001 19071290 100%

2 Nguyễn Thị Lan Anh 04/03/2001 19071294 100%
3 Nguyễn Lê Hà Châu 18/10/2001 19071316 100%
4 Lê Thị Thảo Nguyên 30/03/2001 19071448 100%
5 Hồ Phương Linh 08/06/2001 19071401 100%
6 Nguyễn Văn Tú 31/05/2001 19071546 100%

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 Table of Contents
PART I................................................................................................................................4
1.1. Introduction to the company...............................................................................4
1.2. Netflix’s mission and vision.................................................................................7
1.3. Five Forces Model of Netflix...............................................................................8
1.5. Identify the ínitutional factors that might affect the company in Vietnam.
How do these factors affect the company?.................................................................13
PART II............................................................................................................................14
2.1. Use the Porter’s Diamond Model to analyze the context of this company
in Vietnam.....................................................................................................................14
2.2. What is the company’s entry mode into Vietnam? Identify the advantages
and disadvantages of the company’s entry mode to Vietnam..................................16
2.3. Explore the corporate-level strategies that the company is pursuing in
the Vietnamese market................................................................................................18
2.4. Identify any hinders or motivations for the execution of the company’s
chosen corporate-level strategies................................................................................20
2.5. Recommendation................................................................................................20
REFERENCE...................................................................................................................22

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PART I
1.1. Introduction to the company
a, History:
Netflix is a well-known streaming service that has transformed the way consumers
consume entertainment. Reed Hastings and Marc Randolph launched it in Scotts Valley,
California in 1997. Netflix began as a DVD-by-mail rental business, providing clients
with a huge inventory of movies and TV series to pick from. Netflix moved its attention
to online streaming as the internet increased in popularity and streaming technology
improved.
Netflix launched its streaming service in 2007, allowing customers to watch movies and
TV series on their computers in real-time. The firm expanded its streaming collection and
soon began creating original material, including as the critically acclaimed series "House
of Cards" in 2013. This transition into original content was a watershed moment for
Netflix, establishing it as a prominent participant in the entertainment business.
Netflix's popularity skyrocketed as it expanded abroad and formed alliances with diverse
content producers. Netflix has over 200 million subscribers globally by 2020. It continues
to develop and distribute a wide variety of original series, movies, documentaries, and
stand-up specials, providing its members with a diverse spectrum of entertainment.

Netflix’s Logo
b, Business
● Netflix’s Customer Segments: The Netflix platform is intended to appeal to a
broad spectrum of subscribers. Its portfolio includes the most diverse titles,
capable of entertaining fans of all genres, series, documentaries, and entertainment

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 for all ages and interests. As a result, consumer segmentation includes both use
and geographic, but solely to determine which form of content works best for each
group.
● Netflix’s Channels: Netflix's primary outlets are, without a question, its own
website and app. However, they also spend in online and offline advertising,
utilize social media, and gain greatly from word of mouth among their users.
● Netflix’s Revenue Streams: Subscriptions
● Netflix’s Key Activities: Netflix must produce, select, license, and acquire relevant
content, as well as build partnerships and negotiate with studios, content
producers, and movie production houses, while also analyzing and understanding
customer behavior to improve their experience. Last but not least, Netflix must
continue to improve its subscription model and pricing strategy in order to retain
and increase its client base.
● Netflix’s Key Partners: Netflix has a diverse set of strategic partners. Among
them are media companies and television networks that license their material to
Netflix; consumer electronics manufacturers such as Wii, X-Box, and PlayStation,
which bundle Netflix with their systems; and Amazon AWS, because the Netflix
infrastructure is entirely housed on AWS. In addition to this, there are investors
and regulators.
● Netflix’s Competitors:
- International competitors: HBO Max, YouTube TV, Hulu, Peacock, etc.
+ HBO: HBO offers almost 40 years of experience and a large range of original
premium programming, as well as the expertise to develop more. On July 31,
2020, the business streamlined its offerings and transferred all customers from
HBO Go to HBO Max, with HBO Now simply known as HBO.
HBO Max boasts more all-time favorite shows than Netflix, including Game of
Thrones, Friends, and Doctor Who. It also has a range of shows for children. HBO
Max users have access to all of HBO's content for $14.99 per month.
+ YouTube TV: In 2019, YouTube accounted for 70% of the entire time individuals
spent on their phones watching the top five platforms. The streaming service also
accounts for 75% of Android phone usage globally. Netflix has reason to be
concerned.
YouTube TV boosted its programming in 2020 and currently provides more
channels than any other competition, as well as limitless storage. However,
YouTube TV will hike its monthly subscription to $64.99 in June 2020, which
may drive some customers to Netflix.
+ Apple TV Plus: Since its debut in 2019, Apple TV Plus has concentrated on
building a solid portfolio of star-studded series. It signed some of Hollywood's
greatest directors, writers, and performers to develop new TV series, including
Jennifer Aniston, who hosts Aniston's.

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 Because of its connection with the Apple brand, the streaming service enjoys a
significant competitive advantage. Consumers and millennials who are 'all-in' on
the Apple brand are adding Apple TV to their extensive list of offerings. It costs
$4.99 per month and may be shared among up to six family members.
- Visible competitors in the Vietnam market:
According to data from the Ministry of Information and Communications, the top local
streaming services in Vietnam include FPT Play, K+, MyTV, VTVgo, and Viettel TV.
Customers of domestic carriers like K+ or VTV Go enjoy a plethora of local TV
programming and movies.
The promotion of popular Western and K-drama shows benefits FPT and Netflix. Netflix
Vietnam has 1,000 films accessible, according to cordcutting.com, including popular
original titles like Squid Game, Money Heist, and Red Notice, as well as anime
franchises like Demon Slayer: Mugen Train, Attack on Titan, and others.
FPT Play provides subscribers with access to hundreds of TV channels, including sport-
focused K+ stations, as well as a selection of enticing international films.

c, Achievement:
+ Streaming Revolution: By popularizing streaming as a key mode of content
distribution, Netflix played a pivotal part in transforming the way people consume
entertainment. The company's transition from DVD rentals to online streaming
revolutionized the industry and laid the stage for the global expansion of streaming
platforms.
+ Original Content Success: Netflix's venture into original content has been a huge
success. The firm has created highly acclaimed and successful original shows
including "Stranger Things," "House of Cards," "Narcos," and "The Crown,"
which have won several accolades and captivated worldwide audiences. Netflix's
success in original programming has cemented the company's status as a major
content generator.
+ International Expansion: Netflix's international expansion has been astounding.
The company's services have been successfully introduced in a number of
countries, attracting millions of users globally. Netflix has been able to tap into
multiple markets and create a strong worldwide presence by customizing its
content offers and strategy to different countries.
+ Subscriber Growth: Netflix has had phenomenal subscriber growth. From its
humble origins as a DVD rental business, the firm has grown to have over 200
million customers globally (as of September 2021, according to my
understanding). This large user base and constant increase reflect Netflix's
streaming platform's popularity and attractiveness.
+ Financial Success: Netflix has achieved amazing financial success. The firm has
continuously earned significant revenue and shown great financial performance.
Its financial success has been aided by its ability to recruit and keep a big

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 subscriber base, as well as it's excellent content investment and monetization
tactics.
+ Influence in the Entertainment Business: Netflix's success has had a significant
influence on the entertainment business. It has upset established television
networks and challenged cable TV's dominance, enabling new streaming
companies to arise and follow suit. The "Netflix effect" has changed the way the
material is created, disseminated, and consumed, impacting the whole
entertainment industry.
+ Furthermore, Netflix-streamed, distributed, and produced films have won 16
Academy Awards in 11 categories from 116 nominations at nine award
ceremonies in the United States. There are 24 different categories. Netflix has also
garnered 237 Emmy Awards out of 619 nominations, 27 Golden Globe Awards
out of 156 nominations, and 11 Grammy Awards. Netflix has also received several
honors, such as a Screen Actors Guild Award, an American Film Institute Award,
a Peabody Award, a British Film and Television Academy Award, a Streamy
Award, and so on.

1.2. Netflix’s mission and vision

● Mission: “To entertain the world.”
The objective of Netflix is to amuse the entire planet. The major purpose of the
organization is to give a comprehensive selection of high-quality entertainment
alternatives to its users. Netflix strives to provide an immersive and entertaining
streaming experience by providing a massive library of movies, TV episodes,
documentaries, and original content. The major ideas of Netflix's corporate mission
statement are as follows:
+ Content Variety: Netflix strives to offer a diverse selection of content that appeals
to a global audience. The platform includes films and television series from a wide
range of genres, languages, and nations, guaranteeing that there is something for
everyone.
+ Original Programming: Netflix spends extensively in the creation of original
content, such as movies, series, documentaries, and stand-up specials. With an
intriguing and imaginative narrative, the firm hopes to differentiate itself and
attract subscribers by providing unique and exclusive material.
+ User Experience: Netflix is committed to providing a seamless and user-friendly
streaming experience. The platform's design, suggestions, and customized features
are constantly improved to ensure that users can simply discover and enjoy the
material they love.
+ Global Expansion: Netflix's purpose goes beyond the borders of the United States.
The organization aggressively develops its services to other nations and areas
throughout the world, with the goal of entertaining audiences worldwide and
embracing cultural diversity.

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Overall, Netflix's purpose is to offer entertainment to people all over the world by
utilizing technology and content innovation to provide customers with an immersive
streaming experience.
● Vision: “To continue being one of the leading firms of the internet entertainment
era.”
In view of significant companies such as Amazon and Walmart, this vision statement
stresses the company's strategic aim of dominating the competition. It is worth noting that
Netflix announces in several of its official publications that one of its aims is "to maintain
leadership by providing an excellent entertainment experience." In light of these
circumstances, Netflix's corporate vision statement emphasizes the following
fundamental ideas:
 Continuing leadership
 Internet
 Entertainment
Netflix's strategic management claims that the firm has already achieved its previous
corporate vision statement of being a business leader. The corporation wishes to achieve
the corporate vision's aims while preserving its position as a leader and operational
effectiveness. The "Internet" component of the firm vision statement emphasizes the
significance of online media in business operations. In the same manner as the corporate
mission statement describes the firm as an entertainment enterprise, the corporate vision
mentions Netflix's nature as an entertainment business. Netflix's organizational culture is
notable because it motivates employees to support the company's continuing growth in
order to realize its vision statement by ensuring customer happiness and industry
leadership.

1.3. Five Forces Model of Netflix

a, Competitive rivalry (Strong force)
One of Netflix's challenges in Vietnam is the competition from many competitors from
both domestic and international markets.
TV shows or feature-length films, viewers in Vietnam have countless choices between
digital TV service providers such as FPT Play, VTVGo, and Vieon,... In addition to local
platforms, Amazon Prime Video, BOX Movie, or Fox are also very popular with
audiences in Vietnam. The industry is characterized by intense price competition and a
focus on original content production to differentiate itself from its competitors.
Competitors who offer more services in addition to greater control over content are thus
serious risks. Netflix with mostly content from the US and UK and the high cost of using
from 180,000 VND to 260,000 VND ($7.88 - $11.38) per month, makes it difficult for
Netflix to reach users when compared to FPT Play ($2.19-$6.13), a platform that has

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more pure Vietnamese content and has more affordable long-distance costs when
compared to Netflix. So competitive rivalry is high for Netflix.

b, Threat of New Entrants (Strong force)

A growing number of streaming services are launching or have recently launched their
new streaming services. For a new entrant who does not already produce video content,
the exceptionally large investments necessary to either make new content or acquire
material from big corporations create tremendous entry barriers.
An established company already has a fan base for an entire organization or a specific
chain when they launch the service with their content instantly with fairly low hurdles.
Barriers to entry are high for new entrants who don't already produce their video content,
due to investments mainly in content production or content purchases from major players.
Netflix faces many threats from new entrants as more and more organizations decide to
launch similar services with their own content. Vietnamese people prefer low prices and
the content is narrated, and subtitled, has a host in Vietnamese, and broadcasts regularly
to viewers.

c, Threat of Substitutes (Moderate force)

The threat caused by substitute products is actually happening, according to Netflix
Vietnam. There are many substitute contents such as unofficial sources of digital media,
online streaming service, unlicensed download pages and torrent download. YouTube is
the biggest competitor, which offers the contents freely with advertisements running in
the contents. The substitutes can be listed as Apple TV, VieOn, Galaxy Play, OTT
service, FPT Play, ClipTV, VTV Go and unlicensed and illegal digital cameras.

d, Bargaining Power of Customers (Strong force)

Customers have a relatively low switching cost because practically all services are
provided at extremely similar prices. Therefore, the content's quality, not price, is the
deciding factor in this case. International players expanded their presence in the Vietnam
market, and Netflix, the only global brand in the top 5, experienced the greatest growth.
According to Decision Lab, the streaming giant held a 16% market share in Vietnam in
the first quarter of 2021, but by the end of the year had gained 22%.

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 Top paid streaming services in Vietnam by market penetration rates

Source: The Decision Lab

In Vietnam, consumers prefer to search for their favorite movies on Google over Netflix
because there are still movie streaming sites that infringe on movie piracy in Vietnam. It's
easy for viewers to browse a competitor's website for other content when they can't find it
at Netflix. While Netflix has to pay, pirated websites do not.
Additionally, because users pay every month, the five forces model proposed by Netflix
cannot be based on annual contracts. This offers the user far more autonomy. Due to all
of these factors, customers have incredible bargaining power within Netflix's five forces.
Due to how simple it is for viewers to subscribe and cancel, the power of buyers will
always remain strong.

e, Bargaining Power of Suppliers (Moderate force)

As seen above, content plays an important role in attracting and retaining customers.
Netflix buys content through suppliers, including producing new TV shows or buying
exclusive distribution rights to shows produced by third parties. Netflix announced 159
exclusive original series on the platform from July to September, surpassing the previous
record in Q4 2021 when the platform premiered 143 new shows and nearly 900 episodes.
According to the report, Netflix's original content is much higher than other streaming
platforms such as Amazon Prime Video which released only 223 episodes, Hulu released

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194 episodes, Disney+ released 140 episodes and HBO Max released 114 episodes.
According to Nielsen, Netflix accounts for 8% of all views on streaming platforms, the
highest among other streaming services.
Netflix reaches customers through a variety of internet-connected devices, including
Smart TVs, TV set-top boxes, streaming devices such as firesticks, and mobile devices.
Personalization is applied by Netflix in Email Marketing activities, to better communicate
with customers. Tactics are optimized when Netflix signs agreements with TV
manufacturers about the Netflix button on the remote.

1.4. VRIO framework

As an influencer in the online entertainment market, Netflix Inc maintains competitive
power against large firms. This level of rivalry requires companies to develop
competitiveness that responds to market trends in consumer preferences for entertainment
content. According to this VRIO research of Netflix Inc., the company's fundamental
resources and capabilities contribute to business competitiveness.

Resource Value Rare Imitation Organization Result

Original contents Yes Yes Yes Yes CA

Marketing skills Yes No No Yes TA

Copyright and licenses Yes Yes No Yes TA

Innovation Yes Yes Yes Yes CA

Brand equity Yes Yes Yes Yes CA

User base Yes Yes No Yes TA

User experience Yes Yes No Yes TA

HRM Yes Yes No Yes TA

● Original contents
Netflix announced 159 exclusive original series on the platform from July to September,
surpassing the previous record in Q4 2021 when the platform premiered 143 new shows
and nearly 900 episodes (Forbes, 2022). With original content is the key reason why
consumers subscribe to Netflix, it is extremely rare and challenging for competitors to

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reproduce it. This makes original content substantially important to Netflix. Competitors
need to innovate themselves, which makes it very difficult to produce original content
that can get people to sign up for their services. Netflix's organizational support itself is
one of the reasons why Netflix is so successful today because there is a culture within the
company that treats every employee as an adult (Stenovice, 2015).
● Marketing skills
To reach over 200 million customers, Netflix spent a whopping $17 million on building
its video content. In addition, Netflix also spends $ 2.23 billion on marketing activities to
attract customers to sign up. Netflix users are all too familiar with push notifications from
the platform, recommending new movies or series, tailored to their interests. In addition,
in its app, Netflix has a movie list titled "Top Picks for + User's Own Name" instead of
"Top Picks for You". This makes a big difference and creates sympathy for users.
Vietnamese users often have a habit of using other social media platforms such as
Facebook and Instagram. Netflix understands that social network users, especially Gen Z,
prefer humorous elements like memes, so they use this element to attract the audience.
● Copyright and licenses
Contracts, licenses, and support from entertainment content producers and copyright
holders are a temporary competitive advantage in the VRIO analytics framework. This
strategic factor brings a strong competitive element in the market for Netflix, which has a
strong position of prestige among service users.
● Innovation
Netflix has been at the forefront of video distribution by doing what it has always done
best - innovating and revolutionizing content delivery. What the company will do next is
not really predictable. The company spends large sums of money each year on research
and development for innovation.
● Brand equity
The brand equity of a business is also a leading core competency driving superior growth
through stronger brand recognition and higher user loyalty. It is the users’ perception of
the brand that has a long-term effect on demand and sales globallyHigher brand
recognition and brand recall have started to occur over time as a result of increased brand
equity. Brand identity and how your customers perceive your brand are other factors that
contribute to brand equity. While there are more brands in the market, serving the
entertainment needs of millennial users, Netflix has proved itself more dynamic and
customer-oriented in terms of understanding their expectations. Through a higher focus
on user experience, the company achieved higher credibility and reliability, resulting in
stronger brand equity over time.
The organization gained greater trust and dependability by placing more emphasis on the
user experience, which over time led to stronger brand equity. As a result, the online
streaming platform gains a significant and long-lasting source of competitive advantage.
It will be challenging for Netflix's competitors to match the popularity it has among its
subscribers. Overall, Netflix will be less susceptible to competition pressure in the long
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term.
● User base
There will be around 251 million Netflix users in 2023, an 8.8% user growth from 2022.
Netflix’s subscriber growth is expected to rise by 18.45% in 2025, an addition of about
46.35 million subscribers from 2023.
According to statistics from the Vietnam Pay Television Association, 80% of the revenue
of the above OTT segment belongs to cross-border services. Netflix alone, with about 1.5
million Vietnamese users and only half of them paying the lowest fee of 108,000
VND/month, the revenue has fallen to nearly 1,100 billion VND per year. The number
exceeds the total revenue of domestic enterprises combined.
The revenue and operating margins of the company have expanded as the number of
users increases.
● Human resource management (HRM)
Netflix has also focused on finding new ways to diversify the leadership team and
structure of the organization by providing access to new talent by adding
Hispanic/Portuguese Organizations (HSI), and Black Colleges and Universities (HBCUs)
into other unique employment programs.
Netflix explains that leaders and managers need to live and breathe the company's values
in everything they do. Instead of writing something on a poster and sticking it on the
wall, values should be lived, breathed – and truly valued.
Netflix inspires great people to grow, gives them the opportunity to grow with brilliant
colleagues, as well as presents them with great challenges. On the other hand, the
company avoids growth processes. Traditional standardization: employees plan their
careers, not the organization.
With the goal of building a dense "talent density" for businesses, Netflix manages its
human resources with a different model: no need for policies, no laws, and no
complicated tracking management system. “Freedom and adult” is the ideology that
governs Netflix's human resource management philosophy through three stages of
management activities: pre-employment, recruitment, and post-employment.

1.5. Identify the ínitutional factors that might affect the company in Vietnam.
How do these factors affect the company?

 Legal Factors: One of the primary institutional factors that could affect Netflix in
Vietnam is the country's legal framework. The Vietnamese government is known
for imposing strict censorship laws on media content, which could limit the type of
content that Netflix can offer. Additionally, the government may require Netflix to
comply with certain regulations, such as data localization laws, which could
increase the cost of doing business in the country. The impact of these factors on

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 Netflix can be classified as strong, as they could significantly limit the company's
ability to offer certain types of content and increase its operational costs.
 Economic Factors: Economic factors such as tax policies, currency fluctuations,
and tariffs can also affect Netflix's operations in Vietnam. The government's tax
policies, for example, could increase the cost of content production and
distribution for Netflix. The impact of these factors on Netflix can be classified as
moderate, as they may not significantly limit the company's operations, but could
increase its operational costs and reduce profitability.
 Cultural Factors: Cultural factors such as language barriers and cultural
differences could also affect Netflix's operations in Vietnam. For instance, the
majority of Vietnamese speak Vietnamese, which may require Netflix to invest in
creating local language content. Additionally, Vietnamese culture may prefer
content that is different from what Netflix offers in other markets. The impact of
these factors on Netflix can be classified as moderate, as they could increase the
company's production costs and require it to tailor its content to the local market.
 Technological Factors: Technological factors such as internet infrastructure and
access to high-speed internet can also affect Netflix's operations in Vietnam.
While Vietnam has made significant progress in improving its internet
infrastructure, access to high-speed internet remains limited in certain areas. This
could limit the number of potential customers for Netflix. The impact of these
factors on Netflix can be classified as weak, as they are outside the company's
control, and it may not significantly limit the company's operations.

Overall, the institutional factors that could affect Netflix in Vietnam have a varying
degree of impact on the company. While legal factors have the potential to significantly
limit the company's ability to operate in the country, cultural and economic factors may
only increase its operational costs. Technological factors, on the other hand, have a
relatively weak impact on Netflix's operations.

PART II
2.1. Use the Porter’s Diamond Model to analyze the context of this company in
Vietnam

Factor conditions are the first of the four key factors in Porter's Diamond Model and
refer to the nation's available factors of production such as labor, capital, natural
resources, infrastructure, and technology. Here's an analysis of the factor conditions in
Vietnam for Netflix:

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 ● Labor: Vietnam has a large, young, and growing workforce, which could provide a
competitive advantage to Netflix. However, the labor force may lack some of the
specific skills that Netflix may require for its operations. The government has
invested in education and training programs to develop a skilled workforce, but
there are still gaps in certain areas.
● Capital: Vietnam has a relatively underdeveloped financial sector, but it is
growing and improving. The government has been implementing measures to
modernize the banking sector and attract foreign investment. However, there may
be challenges in raising capital for investment in new technologies and content
creation.
● Technology: Vietnam has a growing technology sector and a high rate of internet
penetration, which could provide opportunities for Netflix. However, there may be
challenges in terms of intellectual property protection and data privacy regulations.
Related and supporting industries are the second of the four key factors in Porter's
Diamond Model and refer to the presence of upstream and downstream industries that
support a company's operations. Here's an analysis of the related and supporting
industries in Vietnam for Netflix:
● Content creation: Vietnam has a growing film and television industry, which could
provide opportunities for Netflix to source local content for its platform. However,
the industry is still relatively small and may not be able to meet the demand for
high-quality content that Netflix requires.
● Internet and telecommunications: Vietnam has a rapidly developing internet and
telecommunications sector, which could support Netflix's streaming services. The
country has a high rate of internet penetration, and mobile data usage is growing
rapidly. However, the quality of the internet infrastructure may still vary across the
country, which could present challenges for delivering high-quality streaming
services.
● Advertising and marketing: Vietnam's advertising and marketing industry is also
growing, which could support Netflix's marketing efforts. However, the industry is
still relatively small and fragmented, and there may be challenges in reaching the
target audience effectively.
Firm strategy, structure, and rivalry are the third factor in Porter's Diamond Model
and refer to the nature of competition within an industry and the degree of domestic
rivalry. Here's an analysis of the firm strategy, structure, and rivalry in Vietnam for
Netflix:

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 ● Competitive landscape: As mentioned earlier, the streaming market in Vietnam is
becoming increasingly competitive, with both local and international players
offering similar services to Netflix. This could lead to intense competition and
pricing pressures for Netflix.
● Government policies: Vietnam's government has been taking steps to promote the
development of the digital economy, which could provide opportunities for
Netflix. However, the regulatory environment in Vietnam is still relatively
complex, and there may be challenges in navigating local regulations and policies.
● Consumer behavior: Vietnamese consumers are still relatively new to streaming
services, and there may be challenges in building awareness and driving adoption
of Netflix's services. In addition, Vietnamese consumers are price-sensitive, and
Netflix may need to adjust its pricing strategy to be competitive in the local
market.
● Collaboration and partnerships: To succeed in Vietnam, Netflix may need to
collaborate with local partners, such as content providers or telecommunications
companies, to overcome some of the challenges mentioned above. However,
building effective partnerships can be complex and time-consuming.
Demand conditions refer to the nature of domestic demand for a particular product or
service and its impact on the competitiveness of firms in that industry. In the context of
Netflix in Vietnam, here's an analysis of demand conditions based on Porter's Diamond
Model:
● Growing middle class: Vietnam's middle class is growing rapidly, and with it, the
demand for digital services like streaming is also increasing. This presents an
opportunity for Netflix to tap into a growing customer base.
● Cultural factors: Vietnamese culture has a strong preference for local content, and
there is a growing interest in Vietnamese films and TV shows. This could be a
challenge for Netflix, which primarily offers international content. However,
Netflix has been investing in producing local content, which could help it to
overcome this challenge.
● Internet infrastructure: Vietnam's internet infrastructure has been improving
rapidly in recent years, and there is a growing availability of high-speed internet
across the country. This presents an opportunity for Netflix to provide high-quality
streaming services to a wider audience.

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2.2. What is the company’s entry mode into Vietnam? Identify the advantages
and disadvantages of the company’s entry mode to Vietnam
- Build allies when entering new markets: When entering the Vietnamese market,
Netflix's initial move was to establish contacts with press and broadcast outlets
and confer with government organizations about regulations governing this kind of
service.
Netflix is also highly skilled at establishing cooperative connections with TV
stations or film producers in the spirit of mutual gain, encouraging filmmakers to
produce high-quality work and assisting them in getting the finest outcomes.
- Build pride in the local market: When Netflix was introduced in Vietnam, it was
the ideal opportunity to add high-caliber films with well-known actors. At the
same time, TVC promotes visuals from Vietnamese movies shown in several other
nations in addition to Vietnam.
Domestic productions were on par with cinematic masterpieces, which not only
attracted Vietnamese audiences' attention but also the press' and media's attention,
leading to massive media explosions.
Advantage: Before entering Vietnam, Netflix had a good amount of experience reaching
out to the global market and having success in many other nations. Netflix has been
around for more than 20 years at this point. When entering the Vietnamese market,
Netflix's experience is very clear in its quick adaptation to Vietnamese tastes in just 5
years and its many amazing accomplishments with a rising user base. After Netflix added
Vietnamese subtitles, as a result, users in Vietnam can enjoy a wide variety of content,
free of ads, including children's shows, television, movies with subtitles, and native
voiceovers. The quality of the audio and video content may also include UltraHD, 4K,
and HDR, depending on the package.
● Large client base: In addition, Netflix is adored by many young Vietnamese
people due to the trend of global integration (research reveals that the majority of
Netflix watchers in Vietnam are between the ages of 18 and 30). As a result, the
market merger is primarily aimed at young people. Young people in the 18 to 30
age range always make up the biggest percentage and grow the fastest. As the
number of customers grows, so does their demand when they prioritize high-
quality and diverse movie platforms in addition to just wanting to watch movies.
● Large purchasing power: People in large cities like Hanoi and Ho Chi Minh City
are prepared to pay extra for movie packages on online platforms in order to have
the best possible movie-watching experience. Therefore, the growth of Netflix
movie bundles will offer great profitability as well as achieve economies of scale
with items. This is a viable market sector with big size and strong purchasing
power.
● Customer bargaining power: Netflix users in Vietnam won't have much
negotiating power because the service's feature is an online movie bundle with a
set pricing in different countries.

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Disadvantage:
● Competition: Vietnam’s market over a period of several years with the
development of technology leading to various types of online games and online
entertainment applications having the opportunity to develop rapidly and with few
barriers to entry. market share. That's why Netflix at the moment has certain
competitors both domestically and internationally, so this is also difficult for
Netflix to gain market share and become a distribution service and platform. The
leading online movie viewing platform in Vietnam. However, Netflix still has
opportunities when Netflix can rely on the leading brand in the global online
platform market, huge revenue, large capital and owning a store of TV shows and
movies, a massive and diverse documentary film warehouse suitable for all
audiences, customers, and above all legal.Competition from many competitors in
the domestic and foreign markets is one of Netflix's difficulties in Vietnam.
Viewers in Vietnam often have many choices when it comes to digital TV service
providers such as FPT Play, VTV Go, and K-plus... when watching movies, TV
series or feature films.
● Price and affordability: Vietnam is still a developing country, so GDP per capita
income is still average, whereas Netflix's subscription fee is higher than when
compared to local platforms. And the appeal of these platforms is not only
affordable prices but also giving young people a wider variety of genres than
Netflix.
● Content localization: Vietnamese viewers may have specific cultural preferences
and nuances that should be considered in content selection and localization.
Failure to respond to local tastes and preferences can lead to a decrease in the
number of subscribers.
● Regulatory challenges: Like many countries, Vietnam has its own regulations and
censorship policies regarding content distribution and online platforms. While
Netflix is a global service, it's important to know government restrictions, comply
with Vietnamese laws, and provide ethical programming and materials when
entering the Vietnamese market. And Netflix will need to navigate and comply
with the regulations set by Vietnam such as respecting standards, fine customs and
traditions, not spreading illegal information related to the State of Vietnam to
avoid spreading such information misinformation, such as the movie "Put your
head on my shoulder" was discovered to have the image of an illegal "cow's
tongue line" map on the East Sea. Not only does this increase opposition to the
movies, but it can also add complexity and cost to its operations.

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 ● Internet Infrastructure: Although Internet usage rates in Vietnam are rapidly
increasing, there may still be challenges in Internet access and quality, especially
in rural areas. This can limit the reach and potential subscriber base for Netflix.
2.3. Explore the corporate-level strategies that the company is pursuing in
the Vietnamese market
Netflix has been operating in Vietnam since 2016, and the company has been gradually
penetrating the local market. Here are some key points related to Netflix's market
penetration in Vietnam:
● Local competition: Netflix faces competition from both local and international
players in the streaming market in Vietnam. Local competitors include services
like VTVcab ON, FPT Play, and Clip TV, while international players include
Amazon Prime Video and HBO Go. Netflix is one of the most popular streaming
services in Vietnam, but it faces increasing competition as the market grows.
● Pricing strategy: Netflix has adjusted its pricing strategy in Vietnam to be more
competitive in the local market. The company offers three different pricing tiers in
Vietnam, with prices ranging from VND 140,000 to VND 260,000 per month.
This is significantly lower than the pricing in other markets like the United States.
● Partnerships: Netflix has been partnering with local telecom companies like
Viettel and VNPT to promote its services and make it easier for customers to
access Netflix's content. These partnerships have helped Netflix to expand its
reach in Vietnam and make its services more accessible to a wider audience.
Product development is an important aspect of business growth, and in the case of
Netflix in Vietnam, the company has been investing in product development to better
serve its customers. Here are some key points related to the product development of
Netflix in Vietnam:
● Localization of content: As mentioned earlier, Netflix has been investing in
producing and licensing local content in Vietnam to better appeal to local
audiences. This includes original series like "Cursed," "Blood & Water," and
"Fate: The Winx Saga," as well as licensed Vietnamese TV shows and movies. By
offering localized content, Netflix is able to provide a more personalized
experience to its Vietnamese customers and differentiate itself from competitors.
● User interface and user experience: Netflix has also been investing in improving
the user interface and user experience of its service in Vietnam. For example, the
company has added Vietnamese subtitles and dubbing for some of its content,
making it more accessible to non-English speakers. Netflix has also been testing
new features like shuffle play and a "Watch Now" button to help users quickly
find content to watch.

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 ● Personalization: Finally, Netflix has been investing in personalization to help users
discover content that is relevant to their interests. The company uses algorithms to
recommend content based on a user's viewing history and behavior. In Vietnam,
this includes recommendations for local content that may be of interest to
Vietnamese users.
Market development is a key growth strategy for businesses, and in the case of Netflix
in Vietnam, the company has been investing in expanding its reach in the local market.
Here are some key points related to the market development of Netflix in Vietnam:
● Marketing campaigns: Netflix has been investing in marketing campaigns to
promote its services in Vietnam. The company has run advertisements on social
media platforms like Facebook and Instagram, as well as on billboards and other
outdoor advertising. Netflix has also been partnering with local celebrities and
influencers to promote its services to their followers.
● Content partnerships: In addition to producing and licensing local content, Netflix
has also been partnering with local content providers to expand its content library
in Vietnam. For example, the company has partnered with Vietnamese film
production company BHD to bring popular Vietnamese movies to its platform.

2.4. Identify any hinders or motivations for the execution of the company’s
chosen corporate-level strategies
Motivations:
● Large and growing market: Vietnam has a large and growing population, with a
sizable portion of the population being under 30 years old. This demographic is
particularly attractive to Netflix, as they are more likely to be early adopters of
new technology and more receptive to streaming services.
● Untapped potential: The Vietnamese streaming market is still relatively untapped,
presenting a significant growth opportunity for Netflix. By investing in
localization efforts and partnerships with local production companies, Netflix can
better serve the Vietnamese audience and tap into the market's potential.
● Mobile-first market: Vietnam is a mobile-first market, with a high percentage of
the population accessing the internet through their smartphones. By optimizing its
mobile app and launching a mobile-only subscription plan, Netflix can cater to this
growing demographic and gain a competitive edge over its rivals.
Hindrances:
● Cultural differences: Despite Netflix's localization efforts, there could be cultural
differences that the company may not fully understand, leading to potential
misunderstandings or offense to the Vietnamese audience. Netflix must be

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 sensitive to local cultural nuances to avoid missteps that could damage its brand
reputation.
● Regulatory hurdles: The Vietnamese government has strict regulations on foreign
media companies operating within its borders, including censorship and licensing
requirements. These regulatory hurdles could slow down or limit Netflix's content
offerings in the country.

2.5. Recommendation
Over the past few years, Vietnam's 98 million people have shown increasing interest in
subscription video on demand (SVOD) services, demonstrating their willingness to
access and pay for streaming video content from a variety of local and international
suppliers.
According to Statista's Digital Market Outlook, SVOD subscriber numbers increased
21% year over year to reach 5.1 million in 2020 as a result of the imposition of financial
constraints and social segregation laws designed to battle the coronavirus pandemic. By
the end of Statista's estimated period, Vietnamese SVOD services are anticipated to
attract between 400k and 600k paying customers a year between 2022 and 2025, bringing
their total to 7.5m. Those numbers climbed once again by another 10% to reach 5.1
million in 2021. Vietnam is a nation that is rapidly developing, with a middle class that is
expanding and the capacity to use new technologies. The average internet time for
Vietnamese people aged 16 to 64 is 6 hours 47 minutes, of which 2 hours and 40 minutes
are spent streaming material. More than 97% of the population owns smartphones.
According to a report by YouNet Media, 31% of all conversations on social media
networks during the three months of lockdowns in Vietnam's coronavirus outbreak were
about movies. There are a lot of social conversations around movies, which shows how
big of a market Vietnam is for streaming services. We offer some ideas for Netflix to
participate in the fiercely competitive market because the coronavirus outbreak created
the conditions for a more intense competition among streaming services in Vietnam.
Focusing on the “original contents”. Netflix has a great attempt to build its own series
making Netflix become more authentic and can’t be replaced as these series are only
streamed on Netflix which brings the company spirits and new directions for the future
development.
Netflix also did a great job splashing on social media by launching humorous editorial
social content fuelled by local trends and local user insight in July 2021. Netflix taps into
user tastes and interacts with its growing domestic audience with close and witty
Vietnamese editorial content, while platforms such as iQiyi or WeTV pay more attention
to running paid ads on social media. The humorous editorial social contents are closely
related to Gen Z that helps Netflix to maintain and develop its own large customer base.
Netflix's “Free Plan” was made up of online and Out of Home video content starring
Vietnamese rap star Suboi, and Instagram and TikTok videos including KOLs such as
Quynh Anh Shyn, Jun Vu and Trang Hyon. The #NetflixGoiMienPhi (#NetflixFreePlan)

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hashtag constantly appeared on online platforms and attracted a tremendous amount of
interaction. The launching of this plan brings Netflix a great opportunity to limit the
status of sharing accounts which brings more concerns about privacy terms.
Netflix is still new to the Vietnam market appearances just for a few years thus we think
that Netflix is just testing Vietnamese market for the very first research to decide whether
to stay in the Vietnamese market or not, thus, whatever happens next in the race of
Vietnam’s streaming services, Netflix is still doing a great job.

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