Netflix In India – The Way Ahead Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Netflix In India – The Way Ahead Case Study Analysis

Decreasing costs;

It will be advised to the business to reduce operating cost by employing the suggested aggregation strategy i.e. centralizing the research and development and management for various regions in India at one central location i.e. Mumbai. This will enable the organization to operate at lower cost, achieve operational efficiency and enjoy quality control.

Differentiating or increasing willingness—to—pay:

The organization can increase the customer’s willingness to pay by providing access to wide variety of existing Indian content i.e. movies in multi languages that includes Malayalam, Telugu, Tamil and Hindi. In addition, the customer’s willingness to subscribe for Netflix services can be increased by providing unique local content i.e. new movies or webs series in Hindi such as Sacred Games. This will allow the organization to differentiate itself from the competitors in the Indian market.

Improving industry attractiveness or bargaining power:

The industry attractiveness can be increased by targeting the cities that has higher internet penetration rate and high number of youngsters as the youth is the primary segment for Netflix considering, the young users prefers to watch movies on the online platforms. Expansion into the relevant market will enable the organization to seize high market share and create strong brand image and demand.

Normalizing (or optimizing) risk:

Expanding the business in International markets will reduce the overall risk faced by the organization as the macro environment factors pertaining to the particular country will only affect the profitability earned from that region. Thus, normalizing and optimizing the risks faced by the organization.

Generating and deploying knowledge (and other resources and capabilities):

The skills, capabilities and resources in existing market i.e. India matches the global capabilities of the firm considering, the organization has an image of entering the markets that has high demand of local content. In addition, the organization will be establishing a franchise in Mumbai that has higher literacy rate as compared to other posh cities of India. Therefore, adequate skilled employees will be hired easily.

Logic of Place: Growth Model

The growth of Netflix Inc. Corporation is based on the following factors:

Macroeconomic factors:

In order to achieve economic growth, the organization employs consumer led growth models i.e. the organization adopts a pricing model after incorporating the effects of interest and exchange rates. As both exchange rates and interest rates have significant effect on consumer’s income, the organization determines its pricing strategy based on these factors. Employing high rate subscription model in market where interest rates are high or the currency is weak, organization will not be able to create demand or seize adequate markets share in the market.

Legal factors:

The organization has to incorporate the legal consequences in the market strategy it employs considering, there are various laws and regulations pertaining to the production of content and distribution of content as the organization will need to approve the content from the regulatory authorities. In addition, the organization will need to provide censored content in India.

Co-coordinating mechanisms:

The firm coordinate with their workers by establishing effective communication and hierarchy between the executives and lower management. A positive work culture is provided, Effective HR practices area adopted which includes proper trainings given provided by overseas senior executives who guides and trains them regarding the marketing techniques, sharing strategic approaches and more. The firm will be financed mostly by debt as it is the cheapest and quickest source of finance as compared to equity finance sources.

Logic of Firm: Business Model

Value Proposition:

The organization will create value proposition by targeting one tier and two tier cities of India as the literacy and penetration rate in these areas appears to be high. Moreover, the organization will create value proposition by targeting young segment as 50 percent of the country’s population is under 25 and prefers to watch movies on the go thus, indicating high demand of video consumption on mobile phones. The value proposition will be created for the young segment by providing access to a wide local and international content at affordable prices as the disposal income of young users appears to be low.

Value Creation/Chain:

The organization will create and capture value by employing a low subscription model, partnering with various telecom operators such as Airtel to ease the problem for payment by customers as consumers will pay for the services as part of the monthly bill. In addition, various payment options will be offered to the customers for their convenience along with one month free subscription and access to wide range of international and local content.

Value Capture:

The organization will capture value by adopting the minimization approach i.e. capturing sufficient value to sustain the business. The approach will allow the business to attract adequate customers and achieve long term success as when quality services will be provided at competitive rates and little value will be captured, the customers will become loyal to the customers and spread word about brand’s quality services to other potential customer.

Non-Market Strategy: Baron’s 4 I’s

Issues:

The issues faced by the organization in seizing adequate market share in the country involves piracy issues as the content is easily pirated in the country. This will reduce the demand for original content since the consumer income is already low in the region, they will prefer watching the content free of cost instead of paying monthly subscriptions.

Institutions:

In order to provide services in Indian market, license to operate will need to be obtained from the relevant regulatory authorities. In addition, the organization will need to obtain approval for the produced content from the Central Board of Film Certification and other relevant regulatory authorities.

Interests:

As Netflix is an international brand, various production houses will prefer broadcasting their content on the online platform. In addition, various production houses will want to be associated with the brand to increase their income and viewership as people around the world will be able to watch the content.

Information:

The organization increases the brand knowledge and awareness among the wider population by partnering with various brands, sending personalized suggestions to the users and associating with various production houses and mainly using social media as a primary marketing channel.

Blue Ocean Strategy:

Using the blue ocean strategy, an uncontested market space can be created by using the following measures:

Market Space:

The organization can create uncontested market space by focusing on value innovation through providing original local content at competitive rates. In addition, value be created by reducing cost as result of standardizing operations at one central location.

Competition:

The organization made the competition irrelevant by disrupting the market, instead of competing on price or becoming better than its competitors, the organization changed the customer experience of watching movies by providing commercial free movie streaming services at competitive rates for the convenience of customers.

Demand:

The organization can capture and create new demand by offering services at competitive rates and providing access to new and original local content. For instance, the demand of the organization significantly increased following announcement of production of Sacred Games.

Value Cost trade off:

The organization achieved value cost trade off by achieving differentiation, creating more value for customers at low cost. This can be achieving by creating economies of scale and reducing cost by standardizing operations at one central location i.e. Mumbai and achieving differentiation by providing access to original new unique local content.

Product differentiation:

The organization can align its system in order to achieve differentiation and at the same time, low cost by standardizing operations at one central location i.e. Mumbai and providing access to original new unique local content................................

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