QUESTION 1.

1. Industry Competitors

Current competitors: The main competitors of Netflix include Amazon Prime Video, Hulu,
Disney+, and other regional streaming services such as BBC iPlayer, Hotstar, and cable
television services.

Pressure Level: High

Explanation: The trend of globalization leads to fierce competition in the online video streaming
industry. Long-standing rivals offering exclusive content further intensify Netflix’s competition
with industry peers. Large technology companies have various scales and resources. This forces
Netflix to continuously innovate, improve technology, services, and offer competitive pricing to
maintain its performance.

2. New Entrants

Potential competitors: Large technology companies that have the potential to expand into the
streaming sector such as Apple (with Apple TV+) or traditional
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media companies undergoing
digital transformation, the giant Amazon, Xbox, and PlayStation.

Pressure Level: Medium

Explanation: It’s not only the existing streaming companies but also newcomers from
multinational information technology sectors that have expanded their business interests into the
field of Internet video streaming, with Amazon being one example. Although the initial costs and
barriers related to technology, infrastructure, etc., to enter the market are quite high, potential
competitors are always on the lookout for opportunities to grow strongly.

3. Suppliers

Providers: Film studios, television program producers, companies providing bandwidth and
network infrastructure.

Pressure Level: Medium.

Explanation: Providers wield significant influence over Netflix due to the reliance on exclusive
content and productions by program producers. The quality of network services and
infrastructure also affects the quality of Netflix’s service, which is crucial for attracting and
retaining customers. Competing for the rights to broadcast exclusive content and the associated
licensing costs also leads to a fairly high level of competition for Netflix. Currently, Netflix is
becoming less dependent on providers due to the exclusive content it produces itself.

4. Buyers

Buyers: Individual customers subscribing to the service.

Pressure Level: Medium

Explanation: Users have diverse needs when using Netflix’s service. They hold a certain power
because they can easily switch between different services if Netflix does not meet their needs in
terms of price or service quality. However, Netflix can minimize the competition from buyers by
offering exclusive content as well as various subscription packages and pricing to meet the needs
and cater to different customer segments.

5. Substitutes

Substitute products: Traditional television, going to the cinema, using non-subscription video
streaming services (like YouTube), video games, and other forms of entertainment.

Pressure Level: High

Explanation: The entertainment industry is rapidly evolving along with the explosion of the
Internet and the emergence of new technology products, providing many alternatives to watching
movies and TV shows online, such as the popularity of platforms like YouTube or video games.
Although the quality and convenience of Netflix somewhat limit this threat, Netflix needs to
continuously innovate and adapt to keep up with trends to maintain its competitive edge.
QUESTION 3.

1.Legal and Regulatory Issues

Challenges: As an American company, Netflix still has to face legal restrictions imposed by the
U.S. government. Additionally, Netflix has to deal with legal regulations in the countries they
choose to expand into. For example, in Malaysia and Vietnam, Netflix must comply with and
respect religious issues, while in China, the challenge for Netflix is the strict regulations imposed
on the media and entertainment industry.

Recommendation: Netflix needs to adapt and comply with the different laws and regulations in
each country where it operates internationally. It should strengthen its work with local legal
advisors to gain a deeper understanding of each country’s specific regulations and respect each
country’s content regulations. At the same time, the company can negotiate with regulatory
bodies to find ways to adapt content appropriately while still maintaining its identity.

2.Infrastructure and Technology

Challenges: In many developing countries, the network infrastructure is not strong enough to
support high-quality streaming services. The lack of widespread broadband coverage and 4G/5G
technology, as well as compatible devices (such as smartphones, computers, etc.), limits users’
access to online services like Netflix. High data costs and large initial investment capital are also
challenges for Netflix when entering these markets.

Recommendation: Netflix could develop lighter application versions that consume less data to
suit markets with less developed infrastructure. The company could also negotiate partnerships
with local internet service providers to expand bandwidth and increase internet coverage to offer
optimized service packages for streaming.

QUESTION 2.

1.Export Phase (2007-2010):

Expansion to Canada (2010): Netflix made its first move into the Canadian market in 2010. This
move marked the company’s initial breakthrough into the international market outside the United
States, making Netflix a streaming service exporter.
Netflix attempted to establish a successful business model to minimize risks when entering new
markets. Netflix used data from initial subscribers - mainly the types of programs they streamed -
to create more effective region-specific business models that take into account subscriber
behavior in certain markets.

2.Multinational Phase (2012-2016):

The multinational phase (2012-2016) was a crucial period in Netflix’s multinational

development. By expanding into new markets, investing in original content acquisition, and
enhancing localization efforts, Netflix solidified its position as a global streaming service
provider and laid the foundation for continued growth in the years to come.

Netflix significantly expanded its presence during this period, launching in Latin American
countries in 2011 and expanding to Europe, including the United Kingdom, Ireland, Denmark,
Finland, Norway, Sweden, and the Netherlands in 2012. The company continued to expand into
Asia-Pacific markets such as Australia, New Zealand, and Japan in the following years.

Using an exclusive strategy for the countries Netflix entered, pursuing exclusive licensing deals
and partnerships to develop original content. This helped Netflix reduce its dependence on
content providers and Netflix also began to pursue an active international expansion strategy,
which further helped the company achieve its goals.

3.Global Phase (2016-present):

Expansion to over 190 countries (2016): Netflix announced a global expansion, offering
streaming services in over 190 countries simultaneously. This marked the company’s
transformation into a truly global company.

Original Content: The Key to Success:

• Netflix strongly focuses on producing original content, investing billions of dollars to create a
treasure trove of high-quality movies and TV shows that attract audiences worldwide.

• Collaborating with talented filmmakers and actors from around the world, Netflix brings
diverse stories that reflect culture and current trends, affirming its global appeal.

Subtle Localization - Understanding Each Market:

 • Understanding the importance of localization, Netflix continuously strives to adjust content to
fit the culture and preferences of each country.

• From providing subtitles and dubbing in multiple languages to producing local content, Netflix
shows respect and understanding of the market, creating a deep connection with viewers.

REFERENCES

10 years on: How Netflix in Canada has evolved a decade later - BNN Bloomberg

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