A M A L I A S O L I H AT I

Y U S U F K U R N I AWA N
S H AV I R A L A R O S A S
COMPANY OVERVIEW Netflix, Inc. is the world’s leading internet
entertainment service with over 139
million paid memberships in over 190
countries enjoying TV series,
documentaries and feature films across a
wide variety of genres and languages.
Found by Red Hastings and Marc
Randolph is a pioneer in the internet
delivery of TV series and movies,
launching streaming service in 2007.
Netflix members can instantly watch
movies and TV programs streamed over
the internet to PCs, Macs and TVs. As of
December 31,2018, Netflix had
approximately 7,100 full-time employees.
Domestic streaming, international
streaming and domestic DVD are their
CURRENT VISION & MISSION

Vision Mission

“To continue being one “ We promise our customers

stellar service, our suppliers a
of the leading firms of valuable partner, our investors
the internet the prospects of sustained
profitable growth, and our
entertainment era”
employees the allure of huge
impact ”
BUSINESS MODEL CANVAS
Key Activities Channels
• Tech and
development • Dekstop, tablet,
• Content licensing mobile phone
and aquisition • Apps store Customer
Key Partners Value Proposition
• Content creation • Social media Segments
• Marketing • Media outlet
• Content Owners • Analytics • Content library • Film ferstival • Technology used
• Internet Service • No ads
• Viewing behaviors
Providers • On-demand
•
Key Resources/ •
• First movie
Cinemas, Theaters Localisation Customer
• Influencers Assets • Personalisation
watched after
• Regulators • Brand • Freemium Realtionships subscribing
• App/website • Self-Service (apps) • Browsing
• Incvestors • Simple pricing
• Content • User support behaviors
• Algorithms and • Social media
Data • Recommendatio-n
• Staff, actors, system
Filmakers

Cost Structure Revenue

• Marketing
• Technology and Development
• Subscription fees (international streaming, US Streaming,
• Content Amortization
• US DVD
Operation cost
FINANCIAL PERFORMANCE-
FINANCING ACTIVITIES
Liquidity Ratios Leverage Ratios

Liquidity Ratios 2018 2017 2016 2015 2014 Leverage ratios 2018 2017 2016 2015 2014

Debt to asset ratio 0.80 0.81 0.80 0.78 0.74

Current ratio 1.49 1.40 1.25 1.54 1.47 Debt to equity ratio 3.96 4.31 4.07 3.59 2.79

Quick acid ratio 1.49 1.40 1.25 1.54 1.47 Long term debt to 2.72 2.78 2.36 2.00 1.36
equity ratio
Cash turnover 0.58 0.52 0.32 0.51 0.42
 This figure shows that company's
highest component on its balance sheet,
its total assets amounting to 26%
followed by total liabilities amounting to
21 %.

FINANCIAL PERFORMANCE- FINANCING ACTIVITIES

F I N A N C I A L P E R F O R M A N C E - PROFITABILITY
AND INVESTING ACTIVITIES ANALYSIS
ROA Calculation

Year 2018 2017 2016 2015 2014

Net Income 1,211,242 558,929 186,678 122,641 266,799

Revenues 15,794,341 11,692,713 8,830,669 6,779,511 5,504,656

Total Assets 25,974,400 19,012,742 13,586,610 10,202,871 7,042,500

  7.669% 4.780% 2.114% 1.809% 4.847%

0.000000295
ROA 0.000000251% 0.000000156% 0.000000177% 0.000000688%
%
F I N A N C I A L P E R F O R M A N C E - PROFITABILITY
AND INVESTING ACTIVITIES ANALYSIS

Based on the figure above it can be concluded

that the company have an increment from
year to year in 5 years comparative years for
revenues and net income. Consolidated
revenues for the year ended December 31,
2018 increased 35%, including an increase of
24% and 53% in revenues in the Domestic
streaming and International streaming
segments, respectively, as compared to the
year ended December 31, 2017
FINANCIAL
PERFORMANCE-
STOCK
PERFORMANCE
ANALYSIS
NATURAL ENVIRONMENT
• Energy : Experts say the ease of streaming services comes with a hefty environmental price
tag. Watching a half-hour show would lead to emissions of 1.6 kilograms of carbon dioxide
equivalent, said Maxime Efoui-Hess of French think tank the Shift Project. That's equivalent to
driving 3.9 miles (6.28 kilometers).

• Technology : Netflix, Inc. in the streaming industry before licensing the product into
Streaming/VOD products they use a high number of DVD/Blu-ray physical discs by
acquisitioning from distributors and big names entertainment incorporation companies such as
Warner Bros., Twentieth Century Fox, and Universal Studios Home Ent.

• Health : Recent research suggests that binge-watching can contribute to everything from heart
disease to lower sex drive and even climate change.
PESTEL ANALYSIS

1. U.S has restrictions on several countries that have

disputes with them.
2. Indonesia has a program that is often called “Tol
Langit '' and Palapa Ring project , thus the
internet is easier to access. .
Politics and Regulation 3. There is Omnibus Law to taxation for companies
that do not have branch offices but have businesses
in Indonesia.
4. There are content restriction policies in some
countries.
 1. Fluctuating exchange rate can affect company’s
revenue.
Economic 2. Economic Growth
3. Recession
1. Social trends are showing that many customers are
moving to watch video content on their
smartphones rather than traditional larger
Socioculutural screens.
2. Younger viewers are watching a third less
traditional television and turn to online streaming
service for their entertainment

1. Video piracy is the reason for huge loss to the

streaming and cinema industry
Legal 2. Fight against Geoblocks and copyright
infringements
3. Streaming on multiple devices to reduce cable
bills.
 1. Increasingly sophisticated screen resolution
technology.
Technological 2. Developed new software codenamed “Hermes”
which automatically grades a translation.
3. The technological shift to 4k screen resolutions.

1. The access to data servers puts huge pressure on

the environment.
Ecological 2. Using wind power to offsets its energy for cloud
storage is a new initiative to reduce its carbon
footprints.
NETFLIX’S EFAS ANALYSIS (OPPORTUNITY)
No External Weight Rating Weighted Comments 2. Economic 0,10 3,9 0,39 Increasing disposable
Strategic Score Growth income leads to more
Factors spending on
entertainment which
will impact purchasing
 
power on Netflix as a
1. Opportunity
provider of
entertainment products.
1. Indonesia has a 0,10 4 0,4 This program will make
 
program that is Netflix easier to be
often called accessed and increase
“Tol Langit '' their market share,
and Palapa Ring especially in Indonesia. 3. Recession 0,02 2 0,04 In a current global
project , thus recession where many
the internet is customers' spending
easier to access. budgets are tight,
services like Netflix
are more attractive than
costly traditional media
subscriptions.
 
4. Social trends 0,06 4 0,24 Netflix is media 6. Increasingly 0,04 3,5 0,14 Using 4K technology will
are showing entertainment service sophisticated increase Netflix customer
that many that can be accessed screen resolution satisfaction because the
customers are in various media technology video resolution is getting
moving to including via better and clearer.
watch video smartphone, thus the
7. Developed new 0,09 4 0,36 This innovation will allow
content on phenomenon
software for faster and higher quality
their supports the business
codenamed translation effort for Netflix
smartphones model of Netflix.
“Hermes” which to serve its programming to
rather than
automatically its 190 countries.
traditional
grades a
larger screens.
translation

8. Using wind power 0,05 3 0,15 With using this innovation

to offsets its will help Netflix to lessen
5. Younger 0,04 4 0,16 This behavior will
viewers are benefit Netflix’s energy for cloud their carbon footprint and
watching a business because the storage is a new make their company more
third less factor indicate there is initiative to reduce eco friendly.
traditional more opportunities in its carbon
television and the market. footprints.
turn to online
streaming
service for
their   0,5 18,4 1,88  
entertainment. Total Opportunity Score
NETFLIX’S EFAS ANALYSIS (THREATS)
1. Omnibus Law 0,10 2 0,2 Omnibus Law is a 3. Fluctuating 0,03 3 0,09 A key issue that affects
rule that Netflix must Exchange Rate Netflix’s expansion is the
obey for taxation in issue of exchange rates.
Indonesia, if this law This factor could
are not obeyed, then potentially affect
Netflix will be attracting a whole “price-
threatened to be conscious” segment.
blocked.

4. Video piracy is 0,10 2 0,2 Based on Netflix’s annual

the reason for report, the company claim
huge loss to the piracy in particular,
2. Content 0,10 3 0,3 This regulation force streaming and threatens to damage their
Restriction Netflix to lessen their cinema industry. business, as its
content which is their   fundamental proposition
core product in to consumers is so
several country and compelling and difficult to
will impact their compete against: virtually
business. all content for free.
 
5. Fight against 0,05 2 0,1 Due to licensing 7. The technological 0,03 3 0,09 The amount of data required to stream in
Geoblocks and arrangements, many shift to 4K screen this 4k screen resolution technology is a
copyright countries have much smaller resolutions. huge strain on customers broadband
infringements. content libraries than what is services, especially if Netflix using this
available to viewers Netflix technology will incriminate their
in the U.S. This will lead subscriber.
unauthorized access to
streaming using VPN or
other technological
workaround.
8. The access to data 0,05 4 0,2 To keep server running, will produce
 
servers puts huge carbon dioxide by using electricity.
6. Streaming on multiple 0,04 2 0,08 Netflix offer customers
pressure on the Currently Netflix has been rate “D” by
devices to reduce cable subscriptions that can stream
environment. an independent energy group for their
bills. on multiple devices at a time.
lack of commitment to offset its carbon
However some customers
footprint. It will tarnish their company’s
have taken advantage of the
image.
multiple device options by
 
sharing login information
with friend and family at
different location thus
reducing subscription
  0,5 21 1,26  
revenue.
Total Threats Score
 
   
1,00 39,4 3,14
Total Score (O+T)
Type of Forces Weight Rating Score Logic
Threat of new entrants 0.10 4 0.40 This business model is easier to replicate, but provides an edge to Netflix is
the range of content available at the company and convenience. Netflix has
been known as one of the industry leader and hence developing this
competitive advantage requires capital investment, supplier contracts, and
networking in the industry which can be difficult to follow by new entrants.
Set aside from all of the competitive advantages that Netflix has, the company
should always acknowledge that there will be a constant development of
technology in delivering the content program that could be new entrants and
other business investing in.

TASK ENVIRONMENT ANALYSIS

I N D U S T RY A N A LY S I S ( P O RT E R ’ S F I V E F O R C E S A N A LY S I S )
Rivalry among 0.30 3 0.90 The media and entertainment industry has intense level of competitive rivalry,
competitors pressuring the companies to strive to retain customers through to offering affordable
prices. This industry is dominated by a few large brands which is a high
competition on capturing the audience by the fact that Netflix facing sever
competition from traditional broadcasters, rival companies providing videos on
demand and retailers selling DVDs. The cost of switching for Netflix’s consumers
is minimal, there is no annual contract, and the recurring fees are negligible. Hence
its easier for their consumer to use another streaming channel.

TASK ENVIRONMENT ANALYSIS

I N D U S T RY A N A LY S I S ( P O RT E R ’ S F I V E F O R C E S A N A LY S I S )
Threat of substitutes 0.10 4 0.40 The substitutes products pose moderate level of risk in the media and entertainment
industry. Netflix faces from substitute service which are offering similar products
through rental DVDs and online streaming. In addition, the traditional media content
provides constitute another example of substitutes products. Customer can also engage
in another sources of entertainment and leisure activities than online streaming and
watching media content. To handle this moderate level of threat from substitutes,
Netflix has to update its content library by adding new TV shows, movies and etc. in
which are the demand by the customer base. The company has to engage in marketing
to maintain the profitability and further expand the customer base.

TASK ENVIRONMENT ANALYSIS

I N D U S T RY A N A LY S I S ( P O RT E R ’ S F I V E F O R C E S A N A LY S I S )
Bargaining power 0.3 3 0.90 The suppliers of Netflix can be viewed as holding high bargaining power. This high
of suppliers degree of influence on pricing is due to the few number of entities producing media
and entertainment based content. Obtaining a contract and acquiring the license to
distribute the content involves negotiation on pricing, where the suppliers have an
edge. Since Netflix is competing against traditional media distributors, it has to show
greater flexibility in agreement than the traditional business. Likewise, the suppliers
have a weaker bargaining power while dealing with the broadcasting business, but
online distributors like Netflix face a higher degree of influence from the suppliers.

TASK ENVIRONMENT ANALYSIS

I N D U S T RY A N A LY S I S ( P O RT E R ’ S F I V E F O R C E S A N A LY S I S )
Bargainin 0.20 3 0.60 One of the biggest threats that Netflix faces is high switching costs. With the many video streaming options
g power to choose from such as Amazon Prime, Hulu, HBO Go and more, it’s easier for customers to switch between
of buyers each. Apart from that, customers can cancel subscription anytime without any termination fee. At $8.99 a
month, Netflix is quite inexpensive when it comes to their library and the content available to stream so that
works advantageously for them. Netflix mitigates the bargaining power of buyers by offering customers
original content only available through Netflix. In March 2011, Netflix began acquiring original content for
its popular subscription streaming service, beginning with the hour-long political drama House of Cards,
which debuted on the streaming service in February 2013 (Netflix, 2015). Since then it has added more
original content, which has popular with customers, including Orange is the New Black, Fuller House and
more.

Total 1.00   3.20  

TASK ENVIRONMENT ANALYSIS

I N D U S T RY A N A LY S I S ( P O RT E R ’ S F I V E F O R C E S A N A LY S I S )
TA S K
ENVIRON
MENT
A N A LY S I S

Strategic Groups
Analysis
 TA S K
iTunes ENVIRON
Youtube
Video MENT
A N A LY S I S
Amazon
HBO Go Competitor Analysis
Prime

Hulu
 iTunes Amazon
Weig Netflix Youtube Video Prime HBO Go Hulu
Key Success Factors
ht Ratin Ratin Ratin Ratin Ratin Ratin
g Score g Score g Score g Score g Score g Score
Subscription Price 0.1 3 0.3 4 0.4 2 0.2 4 0.4 2 0.2 3 0.3
Users (subscribers, members,
viewers) willingness to pay 0.3 4 1.2 4 1.2 3 0.9 3 0.9 2 0.6 3 0.9
Content Selection 0.3 4 1.2 3 0.9 3 0.9 4 1.2 3 0.9 3 0.9
Brand Equity 0.1 3 0.3 3 0.3 3 0.3 4 0.4 3 0.3 2 0.2
Rate of technological advancement 0.15 3 0.45 3 0.45 3 0.45 3 0.45 3 0.45 3 0.45
Strategic Marketing 0.05 2 0.1 1 0.05 3 0.15 3 0.15 2 0.1 2 0.1
Total 1   3.55   3.3   2.9   3.5   2.55   2.85

TASK ENVIRONMENT ANALYSIS

INDUSTRIAL KEY SUCCESS FACTORS NETFLIX
TASK ENVIRONMENT ANALYSIS
S U P P LY C H A I N A N A LY S I S
Product
INTERNAL
Price ENVIRONMENT
Place
A N A LY S I S

Promotion Business Function

Analysis – Marketing
People

Process

Physical Evidence
 Netflix Product Mix

Film and INTERNAL

Television
Series ENVIRONMENT
Content
A N A LY S I S
Video Games
Film
Distribution and
Production` Remote Business Function
Controls
Analysis – Marketing
Product

DVR
Finance Function Strategic Strength Strategic Weaknesses
Obtaining fund (financing Netflix anticipate continuing to finance their Netflix rely heavily with long term debt as of
decision) future capital needs in the debt market, as they the end of 2018.
continue to believe that their after-tax cost of
debt is lower than the cost of equity. Their
ability to obtain this or any additional financing
that they may choose to, or need to, obtain will
depend on, among other things, our
development efforts, business plans, operating
performance and the condition of the capital
markets at the time they seek financing.
.

INTERNAL ENVIRONMENT ANALYSIS

B U S I N E S S F U N C T I O N A N A LY S I S – F I N A N C E
Allocating fund (investment) Netflix primary uses of cash include the Netflix expect to continue to significantly
acquisition, licensing and production of increase the investments in global streaming
content, streaming delivery, marketing content, particularly in original content,
programs and personnel-related costs. Cash which will impact their liquidity and result
payment terms for non-original content have in future negative free cash flows for many
historically been in line with the years.
amortization period.  

INTERNAL ENVIRONMENT ANALYSIS

B U S I N E S S F U N C T I O N A N A LY S I S – F I N A N C E
 Operation (dividend policy) Netflix doesn’t currently pay dividend
since 2002. Based on all the above, a
dividend may not be the right choice
for Netflix given its spending and debt
repayment remain much higher
priorities for management.

INTERNAL ENVIRONMENT ANALYSIS

B U S I N E S S F U N C T I O N A N A LY S I S – F I N A N C E
Infrastructure

INTERNAL
ENVIRONMENT
A N A LY S I S

Business Function Analysis

HRM
– Operation
Netflix Inc. presents its organizational culture as unusual,
especially with regard to how employees are encouraged to
behave in the workplace
Technology

Netflix uses adaptive bitrate streaming technology to

adjust the video and audio quality to match a customer's INTERNAL
broadband connection speed and real-time network ENVIRONMENT
conditions. A N A LY S I S

Business Function Analysis

– Operation
I N T E R N A L E N V I R O N M E N T A N A L Y S I S HUMAN RESOURCE

Procurement (HR Planning, Development (training &

recruitment, selection, placement, development and career
and orientation) development)

Maintenance (compensation,
integration and labor union,
evaluation)
INTERNAL ENVIRONMENT ANALYSIS- MIS
Operational Level (Transaction Processing System)
 Using Oracle ERP system for recording financial
transaction and other finance information.
 Starting to write their own system for DVD
shipping process in order to improve their
Supply Chain Management strategy.
 Storing all of the company’s content information
in data warehouse which is CineMatch which
basically an oracle databases that organizes the
entire Netflix library into groups of similar
movies
NETFLIX’S IFAS ANALYSIS (STRENGTH ) Innovation is a
INTERNAL STRATEGIC WEIGH SCOR
RATING COMMENTS must and will
FACTORS T E
Strong focus on innovation stabilize the
5 0,05 4 0,2
A. STRENGTH across the organization existence of an

Exclusivity with regards to organization

These licensing helps netflix
 
1 licensing through 0,10 5 0,5
grab the global market as Doesn’t need a
studios/broadcast networks
leading media-service provider. fixed infrastructure
Flexible infrastructure with low
Status as pioneer in the 6 0,10 4 0,4 for production and
operating costs
industry (helps secure many can switch places to

highly-demanded titles to The other follows the success of places

Tons of consumer data AND
build database → deterrent netflix Consumer data can
2 0,10 4 0,4 expertise/data analysis
to new entrants because   be a great way to
capabilities to generate
there is a smaller pool of   understand the need
audience-specific content
producers from which to of customer on a
o Strong understanding of the
gleam content). 7 0,02 4 0,08 program that must
user base
be and can be
Competitive first-mover o Knowledge AND
Netflix as a name won’t be produce, but its
advantage understanding of target
3 0,05 4 0,2 forgotten by the consumer also a policy that
o Strong brand audience and consumer
  must be kept
name/knowledge base preferences
Ratings mean
With large scale of production, High quality ratings for in-
Established economies of 8 0,02 3 0,06 customer
4 0,03 3 0,09 it helps improvement in the house content
scale satisfaction
infrastructure
 Convenient one-stop- Doesn’t need a big shop of a
9 0,02 3 0,06 Ability to promote
shop kind Free advertising inside the
14 content on the 0,02 4 0,08
No reliance on ad Netflix don’t rely on ad app
10 0,02 2 0,04 platform itself
agencies agency as it main income

Netflix has more Lots of customer

subscribers worldwide Monopoly the streaming 15 interaction through 0,02 4 0,08 Brand image pass through

11 than all other 0,02 4 0,08 service worldwide in a good media

streaming services business way

combined
Little traditional
Tremendous breadth Attracts user interest and lead advertising → organic
12 0,02 3 0,06
of content offerings to sales opportunities brand content strategy
(subscribers grow, Free branding throughout the
16 social media 0,02 3 0,06 customer cause of the
Not fragmented engagement based on engagement
(license content AND high-quality content
own the platform that and resulting word of
content is consumed mouth)
through → access data
  Asset is growing with the
to drive success across 0,02 2 0,04
13 license content
entire business → Account for more than
vertically integrated) one-third of North Loyal customer give power to
17 0,02 3 0,06
o Important to American internet the brand

leverage this traffic

information
TOTAL STRENGTH (S) 0,65  59 2,49  
 NETFLIX’S IFAS ANALYSIS (WEAKNESSES)  
B. WEAKNESSES        
   
High cost to develop 0,05 2 0,10 Content takes time as
0,10   5
in-house content well as cost
Heavy dependence on
  When the supplier turns down
suppliers (networks etc.)
1 2 0,2 negotiation it will impact netflix
o Suppliers are becoming
 
competitors

Environmental costs
   
→ terrible ranking
    for environmental
awareness (garnered
0,05 3
2 High fixed costs 0,15 Hard for development bad publicity as
competitors like
CSR will trouble Netflix
Amazon and
as the brand is worldwide
6 Facebook use over 0,05 3 0,15
approach
40% renewable
 
energy with their
   
Financial resources are services)
0,05 3 o Data server
strong, but limited with Gamble for investor capacity puts
3 0,15
regards to competition   tremendous pressure
on the environment
(like Amazon)

   
0,05 2 Employees will copy the success
Low brand loyalty (but
4 0,10 of Netflix into their own path
high brand recognition) TOTAL
  WEAKNESSES (W) 0,35 15  0,85  
TOTAL SCORE 1,00  74 3,34  
N E T F L I X ’ S VA L U E
CHAIN
A. Primary Activities

• Inbound Logistic : Netflix focus on gaining

the distribution right of physical and digital
good.

• Operation: For Netflix, the management of

the distribution centres and also the products
coming out if the centres is key.

• Outbound Logistics: For Netflix, this would

involve serving more digital distribution
centers for better access

• Maketing & Sales: For Netflix, they depend

on advertising using digital access such as
internet and social media and word of mouth
to gain more customers.

• Service: Activities must be in place to

enhance or maintain value of the service of
Netflix once the customer has subscribed
N E T F L I X ’ S VA L U E
CHAIN
B. Support Activities

• Firm infrastructure: This focuses on the

general management of Netflix as a
business entity, for example planning and
finance.

• Human Resource Management: Netflix take

a innovate approach by allowing brain
storming and creating potential ideals for
the company and rewarding these
employees.

• Technology Development: For Netflix, they

are developing a technology that allows
customers to stream high quality content at
a lower bandwith rate.

• Procurement: For Netflix, the main

procurements to provide value to the
customer is to source distribution right to
provide more content that is in demand,
thus providing more value.
TANGIBLE AND INTANGIBLE RESOURCE ANALYSIS (TANGIBLE)
Oganizational Resource & Capabilities
Tangible Resources V R I N Competitiveness
Cash account Yes Yes No - Temporary Competitive
advantage

Financial
Paid Membership Yes No - - Competitive Parity

Building Yes Yes - - Sustainable Competitive

Advantage

Physical Aplication and Website Yes No - - Temporary Competitive

advantage

IT Server Yes No - - Sustainable Competitive

Advantage
TANGIBLE AND INTANGIBLE RESOURCE ANALYSIS (INTANGIBLE)

Oganizational Resource & Capabilities

Intangible Resources V R I N Competitiveness
Human Resource Work team skill Yes Yes Yes Yes Sustainable Competitive Advantage
Work team effectiveness Yes Yes No - Temporary Competitive advantage
Transpancy culture Yes Yes Yes Yes Sustainable Competitive Advantage
Innovativeness Creation of creative ideas Yes - - - Competitive Parity
Technological Content for streaming Yes No - - Competitive Parity
Capacity for original content Yes Yes Yes Yes Sustainable Competitive Advantage
Software "Hermes" Yes Yes No - Temporary Competitive advantage
Reputation Brand name Yes Yes Yes Yes Sustainable Competitive Advantage
Patent Yes Yes Yes Yes Sustainable Competitive Advantage
Copyright Yes Yes Yes Yes Sustainable Competitive Advantage
Trademark Yes Yes Yes Yes Sustainable Competitive Advantage
KEY INTERNAL AND EXTERNAL STRATEGIC FACTOR
Duration
Code
Strategic Factors Weight Rating Weighted Score Interm- Comment
Name Short Long
ediate

Exclusivity with
These licensing helps
regards to
netflix grab the global
S1 licensing through 0,1 4 0,4     ✔️
market as leading media-
studios/broadcast
service provider.
networks

Status as pioneer
in the industry
(helps secure many
highly-demanded
titles to build The other follows the
database → success of Netflix and
S2 0,1 4 0,4   ✔️  
deterrent to new increase brand awareness
entrants because and recognition easier.
there is a smaller
pool of producers
from which to
gleam content).
 Duration
Code
Strategic Factors Weight Rating Weighted Score Comment
Name Short Intermediate Long

Heavy dependence
on suppliers
When the supplier turns
(networks etc.) or
W1 0,15 3 0,45     ✔️ down negotiation it will
Suppliers are
impact netflix
becoming
competitors
Employees will copy the
success of Netflix into their
own path. because
technology is increasingly
advanced and makes it easy
Low brand loyalty
for users. There is
W2 (but high brand 0,1 3 0,3 ✔️    
possibility, one of Netflix's
recognition)
workers will be able to create
a similar application, thus it
can provide consumers with
many alternatives and
influence brand loyalty
 Duration
Code
Strategic Factors Weight Rating Weighted Score Comment
Name Short Intermediate Long

Indonesia has a
program that is This program will make
often called “Tol Netflix easier to be accessed
O1 Langit '' and Palapa 0,1 4 0,4     ✔️ and increase their market
Ring project , thus share, especially in
the internet is easier Indonesia.
to access

Increasing disposable income

leads to more spending on
entertainment which will
O2 Economic Growth 0,05 2,5 0,125   ✔️  
impact purchasing power on
Netflix as a provider of
entertainment products.

Developed new This innovation will allow

software codenamed for faster and higher quality
O3 “Hermes” which 0,1 5 0,5     ✔️ translation effort for Netflix
automatically grades to serve its programming to
a translation its 190 countries.
 Duration
Code
Strategic Factors Weight Rating Weighted Score Comment
Name Short Intermediate Long

Omnibus Law is a rule that

Netflix must obey for
taxation in Indonesia, if this
T1 Omnibus Law 0,1 2 0,2     ✔️
law are not obeyed, then
Netflix will be threatened to
be blocked.

This regulation force Netflix

to lessen their content which
T2 Content Restriction 0,1 3 0,3     ✔️ is their core product in
several country and will
impact their business.

Based on Netflix’s annual

report, the company claim
piracy in particular, threatens
to damage their business, as
T4 Video Piracy 0,1 2 0,2     ✔️ its fundamental proposition to
consumers is so compelling
and difficult to compete
against: virtually all content
for free.

Total Score 1   3,275  

REVIEW OF VISION AND MISSION

Vision
Continuing leadership Internet
Entertainment Netflix’s
strategic management supports
the goal of continuing
leadership, indicating that the
company has already achieved
its previous corporate vision
statement of global industry
leadership.
Mission
Add more business ventures
to its portfolio, in addition to
original content production
and on-demand digital
content streaming that the
mission statement
encompasses.
REVIEW OF OBJECTIVE AND STRATEGY

OBJECTIVE STRATEGY

The platform has The company makes

achieved reliability and use of latest user-
stability that makes it a friendly features in
distinguished company. order to give the best
experience to its users.
TOWS MATRIX
SO • In house production

Strategies
• Developing new-environmentally friendly technology

WO • Reduce its current supplier reliance by producing its in-house

production content

Strategies
• Developing new technology for current cloud storage system
and reducing it’s carbon footprint in return

ST • Negotiate for any law restrictions, content restrictions, geo-

blocks and any other technicality threat

Strategies
• Developed firewall system and enhancing its legal sanctions on
piracy

WT • Improving bad-media impression

Strategies
• Avoid a hard-entry country as a new targeted market
SPACE MATRIX

Conclusion
Aggresive Profiles (x
Conservative Profiles axis and y axis are
FP Average : +12/ 3 = +4
positves)
IP Average : +13 / 3 = +4.34
SP Average : -10 / 3 = -3.34
CP Average : -8 / 3 = -2.67
Directional Vector Coordinates ;
X axis : -2.67 + +4.34 = +1.67
Defensive Profiles Competitve Profiles Y axis : -3.34 + 4 = +0.66
IE MATRIX

With an EFE of 3.14 and IFE of 3.54,

Netflix falls in the top of the chart.
This recommends us to use a hold
and maintain strategy.
GRAND STRATEGY MATRIX
BCG MATRIX
GE MATRIX
STRATEGY CHOOSING
Alternative Strategy TOWS SPACE IE GRAND BCG GE TOTAL

Forward Integration   X X X     3

Backward Integration X X X X X   5

Horizontal Integration   X X X X   4

Market Penetration X X X X X X 6

Market Development X X X X X X 6

Product Development X X X X     4

Relate Diversification   X   X     2

Unrelate Diversification   X         1

Retrenchment             -

Divestiture             -

Liquidation             -
NETFLIX QSPM
  STARTEGIC ALTERNATIVES
  Market Development Market Penetration
Key Factors Weight AS TAS AS TAS
Opportunities
1. Easier access on the internet 0.08 4 0.32 2 0.16
2. Economic Growth 0.09 3 0.27 3 0.27
3. Recession 0.07 2 0.14 2 0.14
4. Switching behavior from traditional screens to
smartphones 0.03 2 0.06 4 0.12

5. New younger generations as targeted customer 0.08 3 0.24 3 0.24

6. Increasingly sophisticated screen resolution
technology 0.02 3 0.06 2 0.04

7. Developed new software codenamed “Hermes”

which automatically grades a translation 0.02   0   0
8. Energy safer technology 0.05 2 0.1 2 0.1
   STARTEGIC ALTERNATIVES
  Market Development Market Penetration
Key Factors Weight AS TAS AS TAS
Threats
1. Law restrictions 0.10 2 0.2 4 0.4
2. Content restrictions 0.08 2 0.16 4 0.32
3. Fluctuating
exchange rate 0.09 2 0.18 4 0.36
4. Piracy 0.06 2 0.12 2 0.12
5. Geo-blocks 0.10 2 0.2 4 0.4
6. Multiple device
streaming 0.04 4 0.16 2 0.08
7. 4k screen resolutions 0.01 2 0.02 3 0.03
8. Environmental harm 0.08 1 0.08 2 0.16
  1        
   STARTEGIC ALTERNATIVES
  Market Development Market Penetration
Key Factors Weight AS TAS AS TAS
Strength
1. Licensing exclusivity 0.09 3 0.27 2 0.18
2. Industry pioneer 0.10 4 0.4 2 0.2
3. Strong brand name 0.10 4 0.4 2 0.2
4. Economies of scale 0.04 3 0.12 2 0.08
5. Strong innovation 0.07 4 0.28 2 0.14
6. Big data on customer 0.06 4 0.24 2 0.12
7. High quality content 0.08 3 0.24 3 0.24
8. One stop shop 0.03 2 0.06 2 0.06
9. No reliance on advertising agencies 0.02 3 0.06 2 0.04
Weaknesses
1. Heavy dependence on supplier 0.09 2 0.18 3 0.27
2. High fix cost 0.10 1 0.1 4 0.4
3. Limited usage of financial resources 0.07 2 0.14 4 0.28
4. Low brand loyalty 0.07 2 0.14 4 0.28
5. Terrible ranking at environmental issues 0.08 2 0.16 3 0.24
TOTAL 1   5.1   5.67
ORGANIZATION CHART
JOB DESCRIPTION Position
Chief Marketing Officer
Chief Talent Officer
 
Chief Communications Officer
 
Chief Product Officer
 
General Counsel:
 
Chief Streaming and Partnerships
Officer
 
Chief Content Officer
Chief Financial Officer
 
Description
Leads Netflix’s marketing team
Leads the team that maintains the company's unique
corporate culture, hires new talent and keeps the
organization lean and flexible despite enormous growth.
Leads the global team responsible for corporate
communications, content publicity, social media and brand
public relations.
Leads the product team, which designs, builds and
optimizes the Netflix experience.
Responsible for all legal and public policy matters for the
company.
Responsible for the global partnerships with consumer
electronics companies, Internet service providers and
multi-channel video programming distributors that enable
Netflix to deliver movies and TV shows across a full range
of devices and platforms.
Leads content acquisition for Netflix and distribution of
films and television programs
In addition to his financial and planning responsibilities,
he oversees a number of operating areas as well including
customer service, real estate, and employee technology.
BUDGETING
No Activity Budget  Information
1. Marketing expenses consist primarily $. 1.935.000 Certain payments made to the
of advertising expenses Company’s partners, including CE
manufacturers, MVPDs, mobile
operators and ISPs. Advertising
expenses include promotional activities
such as digital and television
advertising. Advertising costs are
expensed as incurred.

2. Product Development $. 2.200.000.000 Producing new Netflix original

content, license, launching, and
promoting.
PEOPLE (DEPARTMENT)
No. Department Responsible
 Calculating budgeting on its new program
 Calculate company cash flow
1. Finance
 Note every funding
 Cash Efficiency
 Improve employee performance
2. Human Resources  Improve employee competence
 Candidate new partner
 Offer cooperation
3. Marketing  Claim market target
 Claim acquisition
 Market information

 Operational efficiency
 Spending on its original conten
4. Operations  Supervised on the program
 Mapping on its progtam
 Identifies market
 PROGRAM SCHEDULING AND BUDGETING
Market Penetration&Development Strategy maintain strategy
Month Budget (In USD) Explanation
No Program PIC/DIC
J F M A M J J A S O N D    
Program 1.1 Marketing & advertising expenses

digital and
  television
Promotional activity Operation, advertising.
P.1.1.1                         500 Thousand
such as digital marketing Advertising costs
marketing are expensed as
incurred.

Payment to CE
Operation, manufacturers,
Payment to
P.1.1.2 Finance, Human                         1,4 M MVPDs, mobile
company partner operators and
Resource
ISPs.
Program 1.2 Product Development
Research on film,
Market research Marketing, and video trend
P.1.2.1                         200 M
  finance and what market
want

Operation, Producing original

Producing original
P.1.2.2 Finance,                         2B content based on
content market research
Marketing
STRATEGY CONTROL AND EVALUATION
 Perspective Objectives Measures Targets Initiatives

Financial Revenue growth Increase in revenue Increase by 20-30% Boost marketing strategy for selling products

Perspective Maximize Net profit margin Increase by 20%

profitability

Maximize P/E ratio Increase by 20% Generate Economic Value Added (positive
shareholder value difference between return on capital and cost of
capital)

Internal Business Waste reduction Environmental From harmful to Elevate its renewable energy, waste less
Process Perspective awareness ranking less harmful

Enhancing its Customer’s Satisfied customers Free shipping, fast response customer service,
service satisfaction increase by 30% wide range of movie choices

BALANCE SCORE CARD

 Customer Increasing Customer’s survey Satisfied customers Intensify post-sale customers service
Perspective customer’s results increase by 30%
Fast-response hotline
satisfaction

Brand identity Brand perception Maintaining as number 1 Unlimited number of TV shows and
survey position movies anytime, anywhere.

Expand global Additional market Expanding to 4 new

Reach out to the unavailable countries
market are countries

Expand licensing Addition licensing Adding more 30 new Easier licensing application, and
partner partner production house promoting independent production house.

BALANCE SCORE CARD

 Employee
Employee’s satisfaction
Employee satisfaction Increase by 40% rewards and
survey
benefit

Great
Learning and Growth
Employee retention and performance
Perspective Turnover rate Less than 20%
engagement management
system

Hours trained per Intensify

Training and development 5 hours per month
employee per month training

BALANCE SCORE CARD

 Selling Metrics Customer’s Customer Distribution Communication
Readiness Metrics Metrics Metrics
Metrics

Revenue Brand Customer Increase Customer service

growth by 20 awareness by satisfaction rate number of film hotline
QUANTITATIV % customers increased by and tv shows performance

E
remain at 20% production
number 1 house by 20 %

MEASUREMENT position

-MARKETING Expanding Customer Lessen Unlimited Advertising scope

global market preferences customers movie and tv
by 5 % towards Netflix complaint by shows genre
30% and country of
origin

  Re-subscribe Number of HD quality Advertising

rate increase subscribers content frequency
by 20% increase by distribution
30% with no bugs
 HR Function HR Characteristics Turnover Cost Per Hire
Metrics Metrics Metrics Metrics

QUANTITATIVE ROI in HR Rate of hiring a diverse Turnover rate Average cost in

MEASUREMENT- function workforce by gender hiring process
HRM
Average cost of Rate of hiring a diverse Employee tenure  
training and workforce by race, and and engagement
development religion.
program

Average rate of Outsourcing employee    

employee rate
absenteeism
 Operation Metrics Service Quality Product Quality Quality Control
Metrics Metrics Metrics
Delay in movie or Customer’s HD quality Quality of A/V
tv shows complaint number content and audio assets
QUANTITATIVE distribution rate deliverables rate rate
MEASUREMENT- Number of system Customers Customers Translation
OPERATION bugs satisfaction rate satisfaction rate accuracy and
consistency rate
(subtitle error
rate)
      Segment / Bumper
transition error
rate
Indicators Measurement Notes

Maintaining whereas the company still able to meet its

Liquidity Current ratio, quick ratio, cash ratio, and cash turnover
current obligation

Debt to asset, debt to equity, long-term debt to equity,

Leverage Have a more portion for its equity financing
coverage ratio

Gross profit margin, return on investment, return on equity,

Profitability earnings per share, net profit margin, operating profit margin, Increasing in overall company’s earning.
return on assets

Company’s Gaining market capitalization and great stock

P/E ratio, M/B ratio, EVA, MVA
value performance.

QUANTITATIVE MEASUREMENT-FINANCIAL
 Qualitative Measurement – Customer Satisfaction Survey
 Online survey provide by Netflix on its current service quality
and customer care
 Online survey provide by any other media for customer
QUALITATIVE engagement and satisfaction rate

MEASUREMENT Qualitative Measurement – Employee Satisfaction Survey

 Survey provide by Netflix on its current employee satisfaction
and engagement rate
 Online survey/ poll provide by any other media for employee
engagement and satisfaction rate
THANK YOU