Question

5. International expansion appears to be a major growth opportunity for Netflix. What challenges does Netflix face by going beyond the U.S. market? What can Netflix do to address some of the challenges encountered when going internationally? And which international markets should Netflix focus on, and why?Describe the question in a min of 1000 words. This question relates to Netflix case in Frank Rothaermel Startegic Management text book 4th edition

Answer 1

1. Netflix is an American based online streaming media provider of films and television shows. Though Netflix retains its No. 1 position in America, it is currently focusing on expanding its market around the world.

The challenges that Netflix will be facing in the markets outside the US are:

(I) Competing with subscription fees of top, well established competitors in other regions

(ii) Adding new contents to satisfy regional viewers.

(iii) Establishing good infrastructure for quality streaming of online contents to reach maximum subscribers.

(iv) Abiding with local laws and their constraints pertaining to media services in the respective countries.

2. Netflix has a huge advantage over its competitors due to its globally recognisable name.

(i) It can collaborate with regional media streaming service providers and expand their content database.

(ii) They can also welcome upcoming content creators like regionally recognised film makers and producers and stream their creation in Netflix. This will encourage subscribers to stick with Netflix and also refer them to their friends and families.

(iii) Netflix can alter their membership according to the country or region they offer services.For eg; In South American and Asian markets where subscriber base can be high, even minimum fee can reflect greatly in a middle class household.Therefore strategising prices according the the countries can boost Netflix membership greatly.

3. Netflix can focus on heavily populated countries like China,South Asia, South east Asia and South America because it can increase subscribers instantly. And also their internet speed coverage are above average compared to other regions.

European countries can be slightly complicated to enter due to complex laws and content availability.

African countries can also be a little difficult to establish Netflix due to poor economic conditions and low internet speed and connectivity.