Netflix in China Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Netflix in China Case Study Solution

Business Model

Value Proposition

The segmentation of the market for the services provided by Netflix is mainly categorized into two different parts i.e. video-on-demand streaming business and the original DVD rental business. In hoisting Netflix's administrations, the organization began started delivering its substance which incorporated its series creation. This decreases the reliance on content suppliers in the US and Europe viably. However, after the concrete decrement, Netflix has been permitted to expand its market advancement in various Chinese markets.

The Chinese business sector is developing with an increasing population of 9 billion. Over this period, the nation has shown an increased interest in online video and content creations. People these days are fonder of staying at home and chilling with Netflix rather than moving out. These factors and trends have become a huge opportunity for Netflix to expand successfully in China.

Since Netflix can compete and develop financially, so it will be a great advantage for Netflix to expand its market to China, which will serve to provide a higher value proposition and generate higher revenues globally.

Value Creation:

The value of Netflix can fundamentally be created by providing an effective price strategy to the customers as compared to the other substitute present in the market. Despite the other substitute running in the market, Netflix is working successfully as it provides vast content scale and joy for the viewers in their leisure time. To maintain its worth in the market, Netflix has to develop and innovate consistently throughout its entire life span. This is considered critical to hold the customer base and their faithfulness towards the brand.

Value Capture:

To catch the value, Netflix is needed to adopt key strategies to foster a core competitive advantage for example; to develop the content in specific regional languages. Few factors need to be focused on to expand its value in the market. These factors are developing the proper network connection, eliminating the language barrier; so that it can be easily understandable by the different classes of people. Another factor that adds value to the market is to provide unique packages and price ranges, which will attract people more frequently than ever.

Growth Model

Macroeconomic

As the relationship between the interest rate and inflation is inversely proportional.

The interest rate in china was found to be declining around 2-3% these days as compared to the before. Between the late 1990s and 2010, the interest rate circulating in china was about 3-4% but now it seems to be lessening. Whereas other countries, such as India, which has even more declining interest capacity than China, are less effective and have less purchasing power in comparison to the Chinese market.

Netflix is running and expanding successfully in over 190 countries now, but scarcely not in China.

The main issue that arises in the expansion of Netflix in China is that Netflix is not yet running in china due to some legal reasons. The government of China has reportedly said that no such content can be streamed in China whichis comprised of 30% or more than 30% foreign content. (Staff, 2017) After the debate, Netflix has partnered with iQiyi, Baidu, which helps people to consume some Netflix originals on iQiyi's streaming service in China.

Legal/Regulatory

The rules and legislations in china are quite restricted and difficult as compared to other countries. The CEO of the company, Reed hasting has decided to launch Netflix in nearly every country at the end of 2016, including China. But after struggling for years, He said that the regulatory environment for digital content services in China has become more challenging and it is very hard for Netflix to expand in China. It is because China has strict regulations which state that the company having more than 30% content of foreign countries is highly not acceptable in China.

After the constant state and struggle, Reed has found other solution rather than expanding Netflix as a brand, he signed a contract with local brands that was running successfully in China and in this way, Netflix has found a place in China, but as a locally administered brand.

Firm level

In terms of developing coordination and communication with the individual employees and workers who are associated with Netflix as locally in China, the organization is required to focus on facilitating the alternative strategic approaches against the issues faced. The provision of a good working environment, training, involvement in the process of decision-making, and listening to their ideas, opinions, and concerns are considered to be the key factors influencing the performance of employees resulting in increased productive outcomes and efficient behavioral outcomes.

The workers and employees in the brands are trained in such a way that develops the sense of responsibility in them to behave in such a way that will be beneficial in the economic and qualitative growth of Netflix as an individual. The goal to expand Netflix in China can be fulfilled by providing quality content and looking forward into such levels that need to fulfill the regulatory terms of china and helpful in growth and advancement in near future.

On the other hand, the business operations of the organization can be significantly financed through taking debt from the financial institutions, mergers, and acquisitions to improve the product portfolio and expand the range of services offered to the potential clients based on their preferences. The interaction with the suppliers is required to be maintained at a positive level as they are the key suppliers of the products....................

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