3-1 Discussion_Share Your Initial Findings
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3-1 Discussion: Share Your Initial
Findings
This is a collaborative discussion in which you will share your initial findings. Provide a short overview of your company and selected challenges, and be sure to include information that your peers would need to know to assess your findings. List and briefly
describe the strengths, weaknesses, opportunities, and threats that are the focus of your analysis. Why are they the most important? Which strengths, weaknesses, opportunities, and threats did you choose not to take into consideration, and why? What problems are you seeing, and what solutions are you considering for implementation?
I chose the company Netflix, a subscription-based streaming service of TV shows and movies. Below are the strengths, weaknesses, opportunities, and threats I chose to focus on so far, but there are may be others to take into consideration. For example, for their strengths, I can focus on their adaptability. Netflix has adopted various technologies to provide streaming services that have helped them grow significantly. Also, from an opportunity perspective, many tech companies like Amazon, Google, and Facebook have started using renewable energy to help sustain the environment. I would like to start researching what green initiatives Netflix has created to promote environmental sustainability.
Strengths
Exponential Growth –
In the past ten years, Netflix has become an influential brand for online streaming content in the US and worldwide.
Brand Reputation
– Netflix has risen to become a household name quickly.
Global Customer Base –
Netflix serves over 190 countries across the world, having a global customer base. There are over 167 million subscribers to Netflix, giving the company strong bargaining power with the studios to secure exclusive content.
Originality –
Another one of its strengths is that Netflix has been producing original content over the years with the highest quality. Some of its shows, like Tiger King, Stranger Things, Narcos, Mindhunter,
and Orange Is the New Black, became so popular that its subscriber count kept increasing over the quarters.
Weakness
Limited Copyrights –
Netflix does not own most of its content, which negatively affects the company. The rights taken from other studios expire after a few years, and that content starts appearing on other sites.
Raising Prices
– Netflix has raised its subscription prices, while other new video streaming services, such as Disney+ ($6.99 per month) and Apple TV+($4.99 per month), have introduced their services at much lower prices.
Increasing Debt—
Netflix serves its diversified content in many countries worldwide, which requires vast amounts of money. Netflix keeps adding to its long-term debt by funding new content. As of April 2020, Netflix reported $14.17 billion in debt and plans to raise $1 billion more through a debt offering. The increase in debt every year is a significant weakness.
Opportunities
Low – Price Mobile Streaming Option
– Netflix can offer a lower-priced option to entice and retain subscribers in the international market. Netflix has been testing a cheaper mobile-only plan in India that costs only $3 a month. It can expand this lower-priced option globally to compete more effectively against cheaper alternatives like Disney +, Apple+, Peacock, etc.
Expand Global Customer Base—
With such a huge current subscriber base, Netflix can tap into many other countries and expand its services and subscribers. They can start to target the countries where it is currently unavailable. Recently, Netflix expanded its operations and added a few more countries to its operation list. However, it is still unavailable in China, Crimea, North Korea, and Syria.
Introduce Cheaper Annual Subscription
—Whenever Netflix releases new content, users often pay for
one month only and binge-watch all their favorite shows within a short period. Netflix loses a lot of revenue because users can cancel their subscriptions
without penalty once they have reviewed all the new content. The company can increase its revenue by introducing an annual subscription with discounts to encourage monthly subscribers to switch to yearly plans.
Threats
Competitive Pressure –
Netflix is not the only one providing worldwide digital streaming. Its competitor's keep increasing every year. Disney+, Apple TV+, HBO, Amazon, Hulu, and YouTube are competing continuously with Netflix by giving repeated access to new and original content to its subscribers.
Government Regulations—
Strict governmental rules and regulations regarding service providers like Netflix in many countries can significantly threaten them. For example, Netflix's expansion to China will be unlikely because of its restriction on foreign content. CEO Reed Hastings has indicated the company would need government permission to do so, so it is focusing on gaining a share in other markets like India.
Piracy—
Digital piracy is still at its peak as thousands of people around the world find ways of downloading media content because of the high monthly costs they cannot afford. It is another big threat
that Netflix faces.
References
Centuro Global. (2024, April 4). The Remarkable Netflix Global Expansion Journey. Explore the story of how Netflix became a global streaming powerhouse.
https://www.centuroglobal.com/blog/netflix-global-expansion-
journey/
Forbes. (2024). Netflix Profile. Forbes.
https://www.forbes.com/companies/netflix/?sh=4cdd00768541
Investopedia. (2023, July 18). How Netflix Is Changing the TV Industry.
https://www.investopedia.com/articles/investing/060815/how-netflix-changing-tv-industry.asp
Stoll, J. (2024). Netflix’s annual revenue 2002-2023.
https://www.statista.com/statistics/272545/annual-
revenue-of-netflix/
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