Netflix in China Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Netflix in China Case Study Solution

Netflix in China

Netflix is the largest provider of Video on demand service in US. Over the period of time, the company entered into the European markets from US Base by offering the licensed content to both markets simultaneously. It developed the premium offer strategy for US and European customers to offer the visual content on demand of the customers. It made three tiers to cater and target three different types of customers in market namely Tier-1, Tier-II, and Tier-III respectively.

Also, in elevating Netflix’s services, the company started producing its own content which included the series production of its own. This included House of Cards, Orange is the New Black, to name a few blockbusters in the market. This greatly reduced the dependence on the content providers in US and Europe effectively. Though this has allowed Netflix to increase its market development and market penetration along with sustainable sales, however, the opportunity that has emerged in the emerging markets China.

China is an emerging market with an over-increasing population of 9 billion.Over the period of time, the country has shown increasing demand for the online video demand, which can be seen from the data gathered on online videos streaming in China.Such increasing market trend can be a huge opportunity for Netflix since sustaining and operating effectively in China is only the game of the giant companies with deep pockets.

And since Netflix has the financial capability and ability to develop the local alliance with Netflix model, Chinese market will serve the company a huge sales and revenues and will also sustain its presence globally.

Though it has been found that Chinese market is a difficult market with high government regulations that does not support the internationalization and FDI moving into China and disturbing the local chine markets, however, it has also been analyzed that the country regulates and welcome the international business through partnership and strategic alliance. In addition to this, since China has opened up its gateway for the international business lately in 2008, it is advantageous for Netflix to enter into China through first-mover benefit and acquire large market share.Many other competitors like amazon may also plan to enter into these markets through collaboration with Baidu or other local players, it is high-time for Netflix to enter into China by adopting the customization strategy and producing local content.

Such strategy is important to enter and “sustain” in Chinese market, since Chinese are reluctant to adapt to the English content and prefer to watch the content in national language, hence language is a big barrier for Netflix to account,in order to enter into China.Moreover, according to Netflix global strategy #Netflix every where, it is best suited that the company should strategize the global expansion into the most leading emerging markets.(Rosenfeld, 2015)

Though previously, Netflix has failed to entry and stabilize its presence in china, due to regulatory issues, language barriers, however, since in the recent time, China has eased up the entry policies and regulatory laws, it is right time for Netflix to enter into the Chinese market.

Growth Strategies

Under the growth/expansion strategy, Netflix lies in the first quadrant of the growth matrix where it already has the global presence in the western hemispheres and in the Asian hemisphere of the world.However, entering into the market will allow Netflix to capture a big huge chunk of the market share in Asian hemisphere since China represents a large market with highest consumption patterns.

Though Netflix is already pursuing the global strategy for the different region, whoever for the Chinese market, it has to customize its global strategy by either converting the existing content into Chinese language to increase the customer virility and awareness in the Chinese market for the own produced content, to develop the local content at initial stage by joining and with the local content developers or entertainment industry player.Such strategy will offer benefit to Netflix in two ways (1) it will fulfill the requirement to join hands with local players to enter into the Chinese market (2) will allow Netflix to develop a concrete and precise targeting strategy the right content for the Chinese market.This will henceforth allow Netflix to successfully stabilize its presence in the Chinese market.

Netflix in China Harvard Case Solution & Analysis

Therefore, it is recommended that Netflix should enter into the Chinese market through partnering with Baidu or Alibaba group to launch a great business into the Chinese market .Baidu or Alibaba group is selected since these two players have an extensive online presence and above substantial customer awareness, data and influx to capture for the Netflix model.Moreover, these two companies especially Baidu is an American-Chinese company, which increases the chances for Netflix to have good developed business relationship with Baidu in the long term. In implementing the strategy, Netflix may need to develop an urgent entry strategy and should target Beijing, Guangzhou and Shenzhen as the prime entry markets since these markets have high consumption rates, low unemployment and more developed infrastructure to support Netflix Model. Moreover, the plan should be executed within the 1 – 2 years since it is eminent that amazon might also enter into the Chinese market that may untimely drive all the benefits away from Netflix............................

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