Netflix in India The way ahead Case Study Solution
The case illustrates the growth and internationalization strategy of Netflix in India. The company has recently entered into Indian market in 2016, with an aim to offer the SvoD services (Sophisticated video on demand). Over the period of time, the Indian market has shown the continuous increase in middle class population and increasing disposable income spending on products and services.In addition, the market has been seen with increased penetration of internet usage among the young generation and high propensity of smart phones usage among the population.
In addition to this, the Indian market is a diverse market with each group showing different characteristics and buying behavior.Such trend and diversity has given Netflix the opportunity to invest in Indian market in order to expand its business in emerging markets.
Since Netflix is not the early mover in the market, it faces the great competition from already developed players like Eros and Hot star on top along with the competition from the local cable providers.In addition to this, the internet speed and the availability of the contents is also a constraint for the Netflix, since the content offered by the Hot-Star and EROS is more culturally inter active and bounding than the Netflix.
However, regardless of these constraints, the Indian market is a huge market to capture for Svod industry, and since the market still have the fragmentation, the company has the opportunity to expand its business by adopting the market customization strategy and producing its own content, the Indian market may offer the Netflix with great growth and market penetration along with the sustainability in the long run.
Keywords: Market Growth, Market Penetration, SWOT, India, Growth, Internationalization.
Introduction
Netflix is the largest provider of the Video on demand service in US.Over the period of time, the company entered into the European markets offering the licensed content to the 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 its services, the company started producing its own content which included the series production of its own. It 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.
In the recent year, 2016, the company has expanded its operations in Indian with the same strategy to offer the Svod services to the Indian users. Such has been taken account by analyzing the trend and changing market dynamics in India which is shifting towards extended smart phone usage and broad band internet.On average majority of the Indian users spend more time on smart phones to access videos and movies than on TV. This has been a great opportunity for the company to launch its model in India, however, the Indian market isan emerging market with adequately developing infrastructure problems.Such problems include the low internet speed, availability of Cable TV and presence of well-established Bollywood content provider like hot star and EROS.
Hence in the presence of these challenges and growth opportunity, Netflix has to design the growth strategy to target the emerging but relatively different customer market by developing the customized market entry strategy that on one hand develop certain value proposition while on other hand sustain its models in India in the presence of well-developed competitors.
Problem Statement
The company is facing challenges in developing strong market entry strategy in India dueto the presence of weak infrastructure, low internet connectivity, non-availability of local content and issues of the censorship that are hindering company’s growth in the Indian market.
Secondary Issues:
- Though the number of smart phone users are increasing, the availability of fast internet is an issue for the company. It is due to the unlimited broad band package that mirage the speed available to each individual andhence creates the bad impact on the overall business of company.
- The local TV content is being watched on a wide scale, hence the company faces the issues in converting the target population to switch to Netflix VOD model when the cable net is cheap in the market.
- The company is dependent on the local content producers to offerthe content to Netflix which in the presence of Hotstar and EROS is difficult to acquire since they have strong market hold.
- There is a clearmisalignment of the content that Netflix provides with the choices or preferences that the Indian audience have for entertainment purpose.
- Lastly, the censorshipboard is challenge for the company, since the business model and objective of Netflix supports thefreedom to watch and what to watch, it resists the censor board policieswhile creating content. Such resistance create hindrance in developing a full fledge strategy to cater the market effectively.
Netflix in India The way ahead Harvard Case Solution & Analysis
Analysis
SWOT Analysis
Strengths:
- The company has strong brand name and well established brand recognition in the market which allows it to stand out of the competition.
- It has a wide range of content available under three models of offerings and caters the wide range of customers by offeringthe content in different languages.
- It customizes its offerings and content accordingto the market needs.
- The company has the ability to produce its own content for the market it is operating in.
- Netflix has strong technological support and innovation base to caterthe Indian market with low cost and high value model.(Arthur A. Thompson, 2012)....................
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