Analysis On Entertainment Industry (Netflix) - Assignment Solution

Introduction and background to the study;

The entertainment industry across the globe had always been dominated by the two main sources the TV and Cinema. However, since few decades Netflix has emerged as the most appealing and demanding source of entertainment. Owing to the type of service Netflix is offering, it has superseded the two major conventional entertainment sources i.e., TV and Cinema.  Netflix’s idea of providing fastest and most economical entertainment to a common man around the world, and the strategy it adopted to practically implement its idea leaded the company to ultimate success. Today, with more than 62 million members, Netflix touts itself as the world’s largest online entertainment subscription service, with operators in more than 50 countries (Ferrell & Hartline 2017, p. 466).  

Analysis of the Netflix and the strategy it adopted will enable to comprehend the route to success of Netflix, core theme of Netflix and the strategy it adopted needs to be analyzed.  

Netflix’s External Environment;

Business operations conducted in compliance with the external environment are mostly seamless and succeed in the long run. External environment is often characterized by demand uncertainties, the economy, and market competitiveness (Peng et al 2014, p. 562), and is prone to continuous changes. Companies for their success, in response to the erratic external environment, formulate flexible policies which can be modified with the external changes or demands. Factors contributing to the external environment are beyond the company’s control, it is the strategy and leadership management of the company that how it maneuvers its operations taking leverage of the external environment to attain its targeted goals. 

Success requires a keen strategic understanding of external influences in order to respond in ways that will ensure the organization's survival and success (Labis 2013, p. 38). Factors contributing to the external environment are beyond the company’s control, it is the strategy and leadership management of the company that how it maneuvers its operations taking leverage of the external environment to attain its targeted goals.

Netflix was launched during the times when internet technology was gaining popularity among the communities and businesses. It envisioned the developments in external environment and taking advantage of technology advancements designed its strategy in consideration with the consumer’s demand and access. Consumer changing demands, market trends, changes in technologies, weather conditions, and government influence are some major contributors of an external environment, whereas Netflix’s streamlining service getting significant popularity among the communities on globe, people shifting from traditional video players with least choices of content to online platforms offering range of choices to watch, communication’s rapid speed, and government’s interest  for the development of internet technology are the external factors that can righty be awarded for the company’s success.    

Netflix – A Five Forces Analysis:

Porter’s five forces model is the most appropriate tool to measure the competence, competitiveness and progress probabilities of an organization in consideration of its challenging factors. The purpose of developing the model is to aid managers in evaluating the external threats so they can become more successful in creating strategies to neutralize them (Rice 2010, p. 379). 

Applying five forces model to Netflix business model, Netflix enjoys the leverage of advance internet technology, consumers demand for range of choices, accessibility, competitive pricing, and availability of all TV and cinema content at one platform. Whereas, its competitive rivals TV and Cinema owing to certain limitations like limited contents, community changed mindset, and accessibility are unable to accomplish the peoples demand, hence losing business. The open Internet--whether fixed or mobile--gains market share over managed networks, and some households now rely solely on the Internet for their video consumption (Fontaine, Bachschmidt, & Leiba 2010, p. 26).