Netflix In India: The Way Ahead Case Study Help
Reduce threats from the state
The threat could be reduced through offering the high quality content at the reasonable rates so that everyone could afford to enjoy on-demand movies at low rates. This would reduce the threat of competition in the market.
Create threats and uncertainty
The company could create the uncertainty & threats through following the regulation guidelines with regard to the requirement of censorship of content and increase the sustainable practices and following the industry trends to keep pace with technological advancement and innovation.In doing so, the competitors would be threatened at greater extent.
Logic of Firm – Platforms
Transactions
The company has gained lot through becoming the multisided business and linear business as it license and pays for all of itscontent. Even though, Netflix is one of the technology based companies, it is not a transaction business but a linear business.
Innovation
The company come up with innovative as well as unique offerings due to the reason that the users and audience are more sophisticated in high technology era.
Hybrid
Netflix is the native app rather than hybrid app due to the fact that the platform is developed for use on the particular service or device.
Business Models - From Pipeline to Platforms
Value proposition
While thecountry witnessestremendous growth in the smartphone usage and internet penetration, themajority of the growth tends to come from the rural areas and tier II and tier III cities. As the regions are less likely to pay the higher fees of subscription and have low disposable income, the strategy of the Netflix would be to target the customers with good income and offer them better quality of videos, premium shows coming at the reasonable rate of subscription.
Value chain
The company should offer its services by adapting value-based pricing strategy which would allow the company to measure the output on the basis of how much value the company delivers to its customer in relation to the alternatives available in the market.The business plan that would distinguishes Netflix from competitors is the unique value proposition and strong brand image that should be developed “the top of mind state” in consumer mind. It is mainly due to uniformity and continuous value addition in the service and value chain that keeps the customer intact, engagement and involved with brand. The company by its virtue incorporated technology as it core fundamental, and it is due to technology and digital platform, that though smart acquisition technique and behavioural analysis, the company should develop smart recommendation service that wouldkeep the customer engaged with the brand and develops the loyalty loop that guarantees the sustainability and retention of the customer base.
Value capture
The company should capture value through increasing profit which could be done through producing a variety of local content in Indian languages with core consideration to with the larger base of customer where increased use mobile data & smartphone is supporting the services demand.
Concept - Global Strategy
Adapt
The company should offer its high quality content to the customer in India at the low price to get safe from the risk of being ignorant and rejected by the customers over the low cost content providers. The cheaper way should be used by company to popularize the service in the country.
Avoid
It is important for the company to avoid being offer its services to the premium segment of the market due to the fact that the majority of the population in Indiafalls in the low income group. So, targeting only premium segment of the market would not reap desirablebenefits to the company.
Shape
Adding the local content into the business model would help the company to maximize the users of the service and increase the long terms profit returns. It should offer ease, conveniences, buyer experience and value to the customer.The company should develop the smart recommendation logarithm that offered it’s the competitive edge in understanding the customer buying behavior and this would help in developing the right customized plan for different customer segments.
ADDING Scorecard
Adding Volume
A low rate of subscription& foreign show model would lead to higher margin to the company and would support the growth as a whole. A low subscription rate would appeal to the majority of the population. By targeting the middle income customers, the company would be able to get the benefit of economies of scale and would become the active market player.
Decreasing Costs
Yes, the globalization tend to lower the cost of operations but it leads to high cost of setting up the business in the international market along with the ongoing cost to keep running the operations of the business smoothly.
Differentiating/Driving Up Willingness to Pay
The company could driving up the willingness to pay through offering unique and innovative services to customers and evolve with the changing trends of the industry as a whole. In doing so, the customer would not find any other competitor offering unique service & high quality content at low price and would not afford to switch to other competitor.
Improving Industry Attractiveness
The expansion into the international market would allow the company to seize the market share, improve the brand position, and generate higher profit returns and creating strong barrier to entry for the new entrants.
Normalizing Risk
The globalization tends to reduce the risk of losing the market share in international countries and compete with the competitors at larger scale. Also, it reduces the risk of limited revenues generate in the existing market and inability to exposure to the international investment opportunities.
Generating and Upgrading Knowledge / Capabilities / Other Resources
The skills, capabilities, and/or other resources in the new marketswould add the existing capabilities of the company in terms of accessing to the new talent pools. In addition, the international expansion tend to offer the variety of advantages in terms of international labor with increased productivity, improved innovation output, diverse educational backgrounds and advanced language skills.
Recommendation
A “mass appeal strategy” should be used by company due to the low disposable come of people in India which does not allow them to spend their money on paying high fee subscription per month. The company should also createaninexpensive plan for mobile streaming to popularize the services in market of India. Investing in global and local production and offering high quality content would help the company to woo more users. It should also target smartphone-centric customers because the country has the highest usage of phone data usage in the globe...............................
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