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Table of Contents
Coursework Cover Sheet.................................................................................................................1

Introduction......................................................................................................................................2

External and Internal Environment Analysis...................................................................................3

PESTEL ANALYSIS...................................................................................................................3

Political Factors........................................................................................................................3

Economic Factors.....................................................................................................................3

Social Factors...........................................................................................................................3

Technological Factors..............................................................................................................4

Environmental Factors.............................................................................................................4

Legal Factors............................................................................................................................4

Porter’s Five Forces Model..........................................................................................................4

Competitive Rivalry.................................................................................................................4

Bargaining Power of Supplier..................................................................................................5

Bargaining Power of Buyer......................................................................................................5

Threat of Substitute..................................................................................................................5

Threat of New Entry.................................................................................................................5

VRIO Analysis.............................................................................................................................6

Value........................................................................................................................................6

Rarity........................................................................................................................................6

Imitability.................................................................................................................................6

Organization.............................................................................................................................6

Critical Factors from Analysis.....................................................................................................6

Strategy in Global Environment......................................................................................................8

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 Netflix motives for International Expansion................................................................................8

Market Saturation.....................................................................................................................8

Growth Opportunities...............................................................................................................8

Diversification of Revenue Streams.........................................................................................8

Content Diversification............................................................................................................8

Economies of Scale..................................................................................................................8

Competitive Pressure................................................................................................................8

Overall Impact on Company Strategy..........................................................................................8

Content Strategy.......................................................................................................................8

Technology and Infrastructure.................................................................................................9

Marketing and Localization......................................................................................................9

Regulatory Compliance............................................................................................................9

Pricing Models.........................................................................................................................9

Entry Strategies for Netflix Inc....................................................................................................9

1. Collaborations/Strategic Partnerships...............................................................................9

2. Partnerships in Licensing..................................................................................................9

3. Investment Directed........................................................................................................10

Corporate Strategy.........................................................................................................................11

Strategies....................................................................................................................................11

1. Horizontal Integration........................................................................................................11

2. Vertical Integration.............................................................................................................11

3. Outsourcing........................................................................................................................11

4. Strategic Alliances..............................................................................................................12

Framework for Increasing Profitability......................................................................................12

1. Customer Acquisition and Retention.................................................................................12

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 2. Content Strategy.................................................................................................................12

3. Pricing and Revenue Optimization.....................................................................................12

4. International Expansion......................................................................................................13

Strategic Purpose – Ethics and CSR..............................................................................................14

CSR Strategy..............................................................................................................................14

Economic Responsibilities.....................................................................................................14

Legal Responsibilities............................................................................................................14

Ethical Responsibilities..........................................................................................................14

Philanthropic Responsibilities................................................................................................14

Recommendations for Improvement..........................................................................................14

Ethical Responsibilities..........................................................................................................14

Philanthropic Responsibilities................................................................................................15

Ethical Issues..............................................................................................................................15

Data Privacy...........................................................................................................................15

Content Regulation.................................................................................................................15

Conclusion.....................................................................................................................................16

REFERENCES..............................................................................................................................17

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Introduction
Netflix Inc. is one of the popular online streaming services which offer different movies,
documentaries, TV shows, and real life content. Netflix Inc. was founded in year 1997 with its
initial offering of DVD by email where it allows customers to rent their DVDs online and
delivering it to their door (Shattuc, J., 2020). In 2007 it started streaming services and become the
largest streaming service on global level. It can be accessed in multiple devices like laptop,
mobile phone, tablets, and smart TVs (Hoffman, A.N).

The purpose of this report is to intend the comprehensive strategy update and review
global strategies for Netflix Inc. by keeping in view their growth opportunities along with
sustainability in the Europe, Africa, Middle East and Asia. In this report we will critically
analyze the external as well internal environment of Netflix by using relevant models. Secondly,
we will look after their strategic options for internationalization and the current sources of
competitive advantage of Netflix. Additionally, we will analyze their corporate strategy for
improving their supply chain on global level. In last, we will evaluate CSR strategies of Netflix .

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External and Internal Environment Analysis

PESTEL ANALYSIS
This research is analyzing external environment of Netflix Inc. using the PESTEL
analysis model. In which political, economic, social, technological, environmental, and legal
factors are being assessed (Gregory, A., 2021).

Political Factors
When doing a PESTEL analysis, it is essential to include the ways and levels of
government intervention in the economy and specific industries. In the last ten years, political
circumstances have changed for Netflix. Ten nations, each with its unique political leanings, are
part of Netflix's extensive international network. Netflix is subject to the laws and rules in each
nation in which it operates. Due to various legislation and more stringent government controls,
there are several nations where Netflix should not offer its services. Certain sections are not
allowed in certain nations, which is another political consideration. So, it's crucial for Netflix to
keep tabs on which countries have prohibited material and remove it from those regions' user
interfaces (Bobmanuel, A.A., 2022).

Economic Factors
Factors influencing the economy include not just product or service prices and consumer
spending power, but also growth rates, disposable income, and currency rates. The monthly
pricing of Netflix varies across different countries. Netflix needs to take each country's economy
into account when deciding on a pricing for their services. Netflix sets this fee based on the
country's economic situation and the regionally relevant material it deems suitable for that
region's culture.

Social Factors
One way to look at social elements is as a microcosm of a population's values and
demographics. Age, gender, financial level, and other demographic variables all have an impact
on societal aspects. Values can be embodied via religious and cultural practices. The preferences
and viewing habits of movie and TV show viewers differ by demographic and geographic area.

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While every consumer is different, societal and cultural factors do influence what the majority of
buyers prefer (Smith, A.Y., 2015).

Technological Factors
As technology progresses, technological factors are gaining significance, when it relates
to internet services and technology. Netflix employs a piece of software that reduces the amount
of data needed to stream movies and TV episodes without compromising with quality.

Environmental Factors
There has been a noticeable upsurge in the number of people worried about
environmental issues including climate change and environmental degradation. . Netflix is less
harmful to the environment than other companies since it does not produce any physical things.
Because of this, Netflix (Tapalaga) is eco-conscious. It bears repeating that Netflix is a major
contributor to the ongoing environmental crisis due to carbon dioxide emission.

Legal Factors
When discussing laws, legal considerations are sometimes more detailed than political
considerations. Legal considerations, like political ones, might vary from one country to another.
Copyright restrictions are among Netflix's primary legal hurdles (Mora). Streaming video that's
readily available in additional nations has been a problem in the past for Netflix because to
foreign users hacking it (Pfeifer, P.E., Conroy, R.M. and Pfeifer, P.E., 2017).

Porter’s Five Forces Model

Competitive Rivalry
The world of entertainment and media has long been a hotbed of fierce competition, but
the streaming sector has seen a new kind of conflict emerge in recent years. Netflix was the
pioneer in the streaming market. Disney+ is one of Netflix's main rivals. From kids to grownups,
the Disney population is massive. Disney+ also has subscriber-only material that isn't available
anywhere else. An all-inclusive family plan with ESPN+ and Hulu is also available. The online
retail giant Amazon Prime is another formidable rival. Among the many special perks offered by

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Amazon Prime members include access to streaming services, free online books, expedited
shipment (often within one to two days), and more (Fristly, A. and Gunawan, D., 2022).

Bargaining Power of Supplier

Suppliers' influence over Netflix has grown substantially in recent years. Several years
passed during which Netflix served as the exclusive streaming option. Netflix, for those that is
part, got to choose the shows and movies they wanted to stream. However, Netflix's suppliers
were able to increase their bargaining strength as new players entered the streaming business. In
addition to Netflix, a number of content providers also entered the streaming sector. Because of
this, Netflix lost a lot of material and, as a result, had less leverage when negotiating with its
suppliers. The providers that supply Netflix are growing in influence as more and more content
creators launch their own streaming services (Fleischman, B., Ondracek, J., Saeed, M. and Bertsch, A.,
2021).

Bargaining Power of Buyer

Customers are in a stronger negotiating position than ever before due to the proliferation
of streaming service providers. In the end, fans will have more control when there have higher
streaming service alternatives accessible. Based on the characteristics and material that the client
wishes, customers can pick from a number of suppliers. . Netflix may risks losing subscribers
and content if it doesn't start producing original, high-quality material.

Threat of Substitute
The streaming sector is now facing a very modest danger of replacement. With the rise of
streaming services, television shows aimed at teenagers and young adults have all but
disappeared from the airwaves. One alternative to streaming services is YouTube, where viewers
may see user-generated material for free.

Threat of New Entry

Although it has been a problem for a while, the danger of new entrants is now beginning
to fade. These days, it's not easy to break into the streaming sector. The most significant obstacle
is the content. The streaming industry got its start with Netflix. Other businesses eventually got
on board when they started seeing consistent results. There isn't much space for anyone who isn't
already a huge producer in this sector after Disney, Hulu, HBO, and innumerable others arrived.

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New entrants pose practically little threat when you consider the quantity of skill currently
present in this field (Bobmanuel, A.A., 2022).

VRIO Analysis

Value
Significant source of value for Netflix’s is its extensive library of original content along
with licensed movies and TV shows. Moreover in data analytics Netflix has sophisticated
analytics of algorithm for giving suggestion to the customers as per their content preferences
(Venkatesan, R., Gibbs, S. and Shively, D., 2021).

Rarity
Netflix Inc. strategy of producing the original content is making it different from other
streaming service providers. Additionally, global reach of Netflix Inc. is providing it a rare
advantage. And this global reach is allowing them to target the diverse audience ( Vilkevicius, K.
and Stanislovaitis, I).

Imitability
Netflix Inc. content creation strategy is not imitable for competitors because this requires
huge cost, time, and innovative talent which has less chances of replication of Netflix content
creation strategy. Secondly, its capability of providing suggestion to customers in their search
engine which is based on the data analytics is being built upon the years of data collection. This
is highly challenging for customers to replicate their strategy and capabilities ( Fleischman, B.,
Ondracek, J., Saeed, M. and Bertsch, A., 2021).

Organization
Netflix mindset of fostering innovative culture by taking the risk in creating original
content is enabling company to head inside the streaming industry. Also agile business model of
Netflix in providing positive response to changing behavior of customers along with any change
in technology is contributing in effectiveness of organization (Gabrielli, G., 2017).

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Critical Factors from Analysis
Current competitive advantage of Netflix depends upon some critical factors which
include its extensive content library, global reach, data-driven personalization, technological
innovation, and organizational flexibility. To remain competitive inside streaming industry
Netflix’s has to maintain its investment inside the original content creation, data analytics
capabilities, expanding operations on international level, adaption the dynamic conditions of
market and stop over as forefront in streaming technology.

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Strategy in Global Environment
Numerous strategic management models allow for a rigorous evaluation of Netflix's
worldwide development. The Ansoff Matrix is one such model; it lays out four ways to expand:
penetrating new markets, creating innovative products, expanding existing markets, and
diversifying your business (Kumar, J., Gupta, A. and Dixit, S., 2020). Market development, in which
Netflix tries to expand by penetrating new geographic areas with its current services, is largely
responsible for the company's expansion into Asia, Europe, Africa, and the Middle East.

Netflix motives for International Expansion

Market Saturation
The local market for Netflix is reaching saturation, so the company had to go overseas for
additional subscribers.
Growth Opportunities
With more and more people getting online and a larger middle class, emerging nations are great
places to invest.
Diversification of Revenue Streams
Growing a business globally lessens reliance on a small number of markets and increases
revenue diversity.
Content Diversification
The worldwide platform may benefit from the different material that is accessible through
international marketplaces.
Economies of Scale
Economies of magnitude in purchasing materials and technical infrastructure can be achieved by
increasing the number of subscribers.
Competitive Pressure
Netflix feels pressured to launch early in strategic areas due to the presence of both domestic and
international streaming service rivals (Curuksu, J.D. and Curuksu, J.D., 2018).

Overall Impact on Company Strategy

Content Strategy

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Adding to its already extensive global content collection, Netflix has made investments in local
content in order to appeal to a wide range of tastes.
Technology and Infrastructure
To guarantee a smooth streaming experience across many areas, expansion need strong
technology and infrastructure.
Marketing and Localization
To better appeal to local audiences, Netflix has produced to modify its advertising campaigns.
Regulatory Compliance
Netflix adjusts its content and business strategies in response to the unique regulatory hurdles
faced by each new area.
Pricing Models
In response to shifting consumer preferences and economic conditions, Netflix has tried out a
number of alternative price models. To keep its dominant position in the streaming sector
worldwide, Netflix has expanded internationally. Expanding into new areas has been a win-win
for Netflix: it increases the number of subscribers and improves the quality of the material
offered, which keeps existing customers and draws in new ones (Czinkota, M.R., Kotabe, M., Vrontis,
D., Shams, S.R., Czinkota, M.R., Kotabe, M., Vrontis, D. and Shams, S.R., 2021).

Entry Strategies for Netflix Inc.

1. Collaborations/Strategic Partnerships
 Europe: Collaborate with European radios to provide regionally relevant programming.
 Africa: Use the client base and payment methods of mobile network carriers by
collaborating with them.
 Middle East: Join forces with local media outlets to better understand and comply with
local laws and customs.
 Asia: Team together with regional filmmakers and TV producers to make films and
series tailored to the Asian market.

2. Partnerships in Licensing
 Europe: Get your material licensed to current streaming services with the possibility of
transferring subscribers to Netflix.

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  Africa: Grant permission for material to be streamed on broadcasting networks and
mobile devices.
 Middle East: Cooperate with media outlets that have been authorized by the government
to license material in a manner that complies with the rules in your area.
 Asia: License well-known Western shows and movies to Asian platform while taking
local tastes and regulations into account.

3. Investment Directed
 Europe: Set up data centers to meet data protection regulations while simultaneously
improving streaming quality.
 Africa: To get around infrastructural problems, put money into local networks that make
and distribute content.
 Middle East: Create a regional headquarters to oversee daily operations and modify
information according to local customs.
 Asia: To expand into new areas and increase brand recognition, it is important to set up
local servers and launch advertising campaigns.

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 Corporate Strategy

Strategies

1. Horizontal Integration
When two organizations at different levels of the supply chain merge or acquire each other, this
is called horizontal integration. This may lead Netflix to buy out other content creators or
streaming providers.

Benefits:
 Increased Market Share: The market share along with user base of Netflix can be expanded by
acquisitions of rival streaming providers.
 Diversified Content: Expanding Netflix's content offerings through acquisitions can help the
streaming service appeal to a broader audience.

2. Vertical Integration
When a company becomes vertically integrated, it gains influence over many links in the supply
chain. There are two possible outcomes here for Netflix: either increasing spending on content
creation (backward integration) or controlling the infrastructure that streams content (forward
integration) (Sieffert, M., 2012).

Benefits:
 Control Over Content: By creating its own content, Netflix is able to have greater say over its
supply network in order and rely less on third parties.
 Improved User Experience: Since Netflix owns the streaming platforms, it can optimize and
regulate the streaming process, which improves the user experience.

3. Outsourcing
The practice of outsourcing entails entrusting the execution of specific company functions to
third-party firms. Things like customer care, technical assistance, and content localization are all
things that Netflix might outsource.

Benefits:

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 Cost Efficiency: Netflix is able to take use of the knowledge and reduced overhead of other
organizations through outsourcing, which can save money.
 Focus on Core Competencies: By contracting out non-essential tasks, Netflix is free to
concentrate on what it does best: curating content and building its platform.

4. Strategic Alliances
Cooperation with other businesses for the advantage of both parties is the essence of a strategic
partnership. For bundled services, Netflix might team up with telecom firms; for locally
produced content, it could team up with producers in the area.

Benefits:
 Expanded Reach: Because it can be integrated with other things that consumers currently use,
Netflix's reach may be expanded through alliances with telecom providers.
 Localized Content: Netflix can reach more people by forming partnerships with local content
creators so it can deliver more locally relevant content (Lamba, H.K., Meena, A., Srivastava, S. and
Khoa, T.T., 2020).

Framework for Increasing Profitability

1. Customer Acquisition and Retention

 Targeted Marketing: Find new viewers and appeal to their interests using watching patterns
and preferences-based tailored marketing.
 Enhanced User Experience: Maintain and grow the platform's subscriber base via iteratively
bettering the UI, optimization algorithms, and content discovery.

2. Content Strategy
 Original Content: Instead than depending on licensing fees, put your money into making
unique, high-quality content to draw in and keep members.
 Content Localization: Increase the variety of information available in different places by
adapting it to local tastes.

3. Pricing and Revenue Optimization

 Dynamic Pricing: Put into action pricing plans that adapt to user actions, market demand, and
localized economic conditions.

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 Partnerships and Bundling: Increase client value and income by teaming up with telecom and
other companies providing services to deliver bundles of services.

4. International Expansion
 Market Penetration: Direct your efforts towards penetrating new global markets by developing
content and price strategies specifically for them.
 Local Partnerships: To get an advantage in new areas, form strategic alliances with local
content distributors and creators.

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Strategic Purpose – Ethics and CSR

CSR Strategy
There are four tiers of social responsibility in general (CSR), as outlined in Carroll's
Pyramid: financial, regulatory, ethical, and charitable.

Economic Responsibilities
For Netflix's continued existence and expansion, maximization of profits is of paramount
economic importance. In this respect, the business has been successful, as seen by the
progressive growth of both its total number of customers and its income.

Legal Responsibilities
Netflix follows all local regulations in every country it does business. It abides by content and
privacy standards, pays its taxes, and respects intellectual property rights.

Ethical Responsibilities
By encouraging diversity and inclusion in its employees and the material it creates, Netflix has
demonstrated its dedication to ethical obligations. Nevertheless, it has been criticized for how it
deals with certain ethical concerns, such the presentation of delicate subjects within its narrative.

Philanthropic Responsibilities
Less well-known are Netflix's charitable endeavors. Its social responsibility initiatives are
smaller in scale compared to those of other companies, however it has done some charitable
giving and formed partnerships (Heath, R.L., Saffer, A.J. and Waymer, D., 2017).

Recommendations for Improvement

According to Stakeholder Theory, a better corporate social responsibility (CSR) approach would
involve greater stakeholder engagement, especially from Netflix in the parts of ethics and
charitable giving.

Ethical Responsibilities
Netflix needs a better mechanism to deal with moral dilemmas in its programming. Experts or
stakeholders impacted by the topics it portrays might be consulted for this purpose.

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Philanthropic Responsibilities
More charitable giving or the creations of a corporate foundation are two ways Netflix may step
up its giving. Society would reap the benefits, and Netflix's standing and relationships with its
stakeholders would improve as a result.

Ethical Issues

Data Privacy
Privacy and security of information are major issues due to the massive volumes of user data
collected by Netflix. (Bilton, 2016).

"Netflix knows regarding us than we have knowledge of ourselves" (Bilton, 2016, p. 2).
Recommendation: More openness regarding Netflix's data gathering and use methods is
required. Users should also have greater say over the data that is collected.

Content Regulation
The absence of content restriction by Netflix has been a point of criticism, especially in relation
to violent and graphic content. (Wayne, 2018).

"Netflix's content restrictions policies have been termed 'the Wild West'" (Wayne, 2018, p. 5).
Recommendation: Netflix has to upgrade its message rating system and impose more stringent
standards for content regulation.

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Conclusion
Measuring overall performance of the Netflix Inc. they are performing much better in
streaming industry. Company is achieving its long-term success by enhancing original content
production for the customers. Additionally, their capabilities of providing suggestions to users in
their search engine based on data analytics is quite engaging for customers. In above research we
analyzed their environment in detail using PESTEl analysis, Porter’s five forces model, and
VRIO analysis. After analyzing their environment, we provided some recommendations to
Netflix Inc. for corporate strategy. Moreover, this research examines some entry strategies for
them and also analyzed ethical issues of Netflix Inc.

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References
1. Shattuc, J., 2020. Netflix, Inc. and online television. A companion to television, pp.145-164.
2. Hoffman, A.N., Netflix, Inc. Strategic Management and Business Policy.
3. Gregory, A., 2021. Complete Analysis of Netflix, Inc.
4. Bobmanuel, A.A., 2022. THE STRATEGIC ANALYSIS OF NETFLIX, INC.
5. Smith, A.Y., 2015. Netflix: a company analysis.
6. Pfeifer, P.E., Conroy, R.M. and Pfeifer, P.E., 2017. Valuation of Netflix, Inc. Darden
Business Publishing Cases, pp.1-13.
7. Gabrielli, G., 2017. Netflix inc. valuation (Doctoral dissertation).
8. Venkatesan, R., Gibbs, S. and Shively, D., 2021. Netflix, Inc.: The Mouse Strikes Back.
9. Fleischman, B., Ondracek, J., Saeed, M. and Bertsch, A., 2021. Netflix: Strategizing
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Subscribers in Indonesia Using Porter’s 5 Forces. International Journal of Innovative Science
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Introduction to Management Consulting in the 21st Century, pp.129-152.
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D. and Shams, S.R., 2021. Product and Service Decisions. Marketing Management: Past,
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18. Heath, R.L., Saffer, A.J. and Waymer, D., 2017. “The Devil’s in the details”: Contested
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19. Bilton, N. (2016). 'Netflix's Opaque Disruption Annoys Rivals on TV'. The New York Times.
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