MGT3SMG Research Portfolio Netflix - Assignment Solution

An introduction and background

In the contemporary world, it has become an undisputed fact that Netflix is serving as the dominant leader in the entertainment industry as a source of readily available entertainment at the customer’s behest, challenging both the domain of the television and the cinema, both long-standing pillars in the entertainment industry. It is for this reason that it has been serving as a market leader in the domain, and the strategy that it has been applying has helped cultivate its market share to the position that it is at today. By making a strategic analysis and by understanding the principles behind the strategic methods applied, and their analysis can one understand the dominance that Netflix has been able to acquire in the market. 

Netflix’s External Environment

At this point, it is crucial to understand the external environment within which Netflix operates. As Editors (2016) have put it very astutely, we live in a day and age where “Netflix and chill” culture has become the most common courtship ritual over the past 100 years. Netflix is most efectively able to merge together two great demands that an everyday customer would have; a love affair and entertainment all meshed into one, via the utilization of the one, same channel. The other theory is offered by Pitre (2019) who stresses upon the culture of binge watching, essentially meaning that because there is an excess of information there is also an excess of time that is wasted watching it. This also relates to the trend of consumerism borne out of the capitalist framework, whereby a greater and greater amount of authority is being allocated to consumers with regards to trends, and the trends that do the most well are those which are able to convenience customers most. And, in this regard, Netflix is faring well.  Hanson, Ireland and Hoskisson (2013) have stressed on this exact context regarding the impact of the external environment. 

Netflix – A Five Forces Analysis

Netflix’s current competitors can be classified into three categories: the cinema industry, the television channels, and the online streaming websites. All operate in a glocal scenario, and give one little leeway to operate in isolation. Because, the company needs to be globally oriented, and capable of supplying its vast audience with all the comport they need, Netflix is seen combining all of the benefits of its three categories of competitors, namely: the benefit of watching in a cinema format at home, the benefit of having easily accessible entertainment just like you TV, and with the flexibility to work on all your IT devices so that your convenience can be ensured, and this entertainment can be accessed from anywhere that you are. Upon Kovac’s (2019) analysis with regards to the PEST analysis being employed, do Porter’s five forces analysis gain weight, behind why and how Netflix has been successful; in specific, legislations around television, the growth of unemployment, the widespread acquisition of mobile technology and the technological revolution have all contributed and changed the lifestyle situation for today, making Netflix dominant due to such environmental factors.