Global Strategy and Sustainability Sample
Introduction
In terms of business implementation of global strategy and provide strategic guidance to business organisations in globalisation. The current report specifically focuses on analysing the internal and external environment of Netflix for understanding the current position of the organisation in the market. In addition, the report also involves an evaluation of specific strategies for making the global expansion of Netflix increasingly effective.
Task 1 -The External and Internal Environment
Internal environment analysis
Value chain analysis
Primary activities of Netflix in value chain analysis
| Inbound logistics | ● Netflix has a strong relationship with effective content developers.
● Several companies that produce digital content provide their media to Netflix. |
| Operations | ● Users can make connections to the service of Netflix by multiple devices.
● Netflix also uses cloud architecture. |
| Outbound logistics | ● As outbound logistics Netflix operates as a rental business related to digital media delivery services through streaming or downloads. |
| Marketing and sales | ● Marketing involves an Agile approach |
| Services | ● Products and services of Netflix are delivered online |
Table 1 : Primary activities within value chain
(Source : Influenced by Mees-Buss et al. 2019)
Support activities of Netflix
| Infrastructure | ● Infrastructures support activities of Netflix involves general management quality management planning legal services accounting and finance. |
| Human resource Management | ● Participation of employees and rewards |
| Technology development | ● Customers are provided with advanced user experience with the reliable online video rental service. |
| Procurement | ● Organisation has been obtaining a copyright licence for selling digital contents. |
Table 2: Support activities within value chain
(Source: Influenced by Mees-Buss et al. 2019)
VRIO analysis for competitive advantage
| Resources or capacity | Valuable | Rare | Imitation | Organisation | Competitive advantage |
| Financial resources | Yes | No | Yes | Yes | Temporary competitive advantage |
| Human resources | Yes | Yes | No | Yes | Strong comparative advantage |
| Technological resources | Yes | Yes | Yes | Yes | Temporary competitive advantage |
| Fixed assets | Yes | Yes | Yes | Yes | Strong competitive advantage |
| Loyalty from consumers | Yes | Yes | No | Yes | Providing a strong competitive advantage |
| Innovation | Yes | Yes | Yes | Yes | High competitive advantage |
| Marketing | Yes | Yes | No | Yes | Sustainable advantage |
| Strong global presence | Yes | Yes | No | Yes | Strong competitive advantage |
Table 3: VRIO internal business environment analysis
(Source: Influenced by Baloch et al. 2021)
External analysis
| Factors | Description | Impact |
| Political | Due to the policies and rules of the government within certain countries, the entire content of Netflix is not readily available in all the countries along with its viewers (Isa et al. 2019). | Negative |
| Economic | The fluctuating rate of exchange impacts a country’s economy leading to a steady hike in the subscription price of Netflix. | Negative |
| Social | Environment of working in Netflix is in the favour of the organisation.
|
Positive |
| Technology | Any users can watch high quality video with minimal data being spent within Netflix. | Positive |
| Environmental | Netflix has been making a partnership with EPA that shows its willingness in shifting towards using renewable sources of energy (NETFLIX, 2023). | Positive |
| Legal | Facing issues due to continuous blame of copyrights business, a small segment of its customers. | Negative |
Table 4: External business environment analysis
(Source: Influenced by Baloch et al. 2021)
Current sources of competitive advantage of Netflix
Growth of Netflix includes the organisation’s focus on its continuous technology innovation. Additionally, as another significant source of competitive advantage of Netflix involves offering superior customer service. In this aspect, Netflix has been launching a new Netflix experience for game and TV consoles based on their premise that each shows a movie as a narrative that can be conveyed by the UI (NETFLIX, 2023). This initiative by Netflix involves telling a much wider story by providing relevant cinematic art and evidence to explain efficiently the thought process of the organisation within the website.
Task 2- Strategy in the Global Environment
Strategy in global environment
Yip framework
Globalisation can be considered as a concept that has been assisting in the transformation of several sectors from national towards global and multinational competitive structure. Related to the specific factor, as per George S. Yip there are four key drivers of globalisation. These drivers of globalisation as per Yip’s framework involve competitive drivers, market drivers, cost drivers and government drivers.
Cost drivers
As per the cost driver globalisation assists in the enhancement of increasing the volume of products. Accordingly, increasing scale economies can lead to the reduction of cost specifically within the areas that involve high cost of development (Baloch et al. 2021). Related to the specific factor, the organisation of Netflix keeps its competition based on cost related to low capital and the input costs as well as scale economies.
Competitive drivers
The competitive drivers of globalisation also offer opportunities boosting complete advantage. In this aspect the key drivers of competitive advantage of Netflix involves its extensive library of content and personalised customer experience. Along with this Netflix has also incorporated innovative technology.
Government drivers
An organisation operating in the global market includes meeting the requirements of the government. In this aspect, Netflix is not available in all the countries and does not offer content from all the countries either. In addition, if Netflix requires operating in the Chinese Market organisation is required to work with policies related to censorship.
Market drivers
Netflix is specifically engaged incorporating strategic campaigns of marketing in attracting new subscribers.
Strategic options
A significant strategy that can be implemented by Netflix in making an international expansion of its business within the countries of Africa, Europe, Middle East and Asia is a multi domestic strategy. Implementation of a multi domestic strategy keeps the focus on responding locally over global standardisation (Mees-Buss et al. 2019). Accordingly, multi domestic strategy involves customisation of products of processes for specific conditions within each country. Therefore, the multi domestic strategy in its incorporation within Netflix can assist the managers within the organisation in understanding the local custom, laws along with the ways by which efficiently it can be met.
Three entry strategies for Netflix
As a global expansion strategy Netflix can implement a joint venture strategy in which it can make a combination with another business seeking the development of a project for profit. However, the involved parties within a joint venture are required to be a combination of two entities in which the risks of conducting a business is also shared within its development (He et al. 2020). On the other hand, licensing can be another significant strategy of global expansion for Netflix. In this aspect, a licensor provides a licensee as a right to use the intellectual property. Additionally, strategic alliance can be another significant strategy for Netflix in which two or more organisations collaborate with each other without changing their independent status.
Conclusion
It can be concluded that the current sources of competitive advantage of the organisation Netflix involves its effective customer service. In addition, the competitiveness of the organisation can be replicated its resources as per the internal analysis of its business. Implications of the specific strategies along with theories can help the business in its International expansion through a much more effective approach.
References
Azeem, M., Ahmed, M., Haider, S. and Sajjad, M., (2021). Expanding competitive advantage through organizational culture, knowledge sharing and organizational innovation. Technology in Society, 66, p.101635.
Baloch, M.A., Ozturk, I., Bekun, F.V. and Khan, D., 2021. Modeling the dynamic linkage between financial development, energy innovation, and environmental quality: does globalization matter?. Business Strategy and the Environment, 30(1), pp.176-184.
He, Q., Meadows, M., Angwin, D., Gomes, E. and Child, J., (2020). Strategic alliance research in the era of digital transformation: Perspectives on future research. British Journal of Management, 31(3), pp.589-617.
Isa, A.M., Mahmud, W.A.W., Sulaiman, W.I.W. and Pitchan, M.A., (2019). Netflix and dilemma of content regulation in Malaysia. International Journal of Advanced Science and Technology, 28(16), pp.460-468.
Lotz, A.D. and Eklund, O., (2023). Beyond Netflix: Ownership and content strategies among non-US-based video streaming services. International Journal of Cultural Studies, p.13678779231196314.
Mees-Buss, J., Welch, C. and Westney, D.E., (2019). What happened to the transnational? The emergence of the neo-global corporation. Journal of International Business Studies, 50, pp.1513-1543.
NETFLIX. (2023)Building the New Netflix Experience for TV | by Netflix Technology Blog | Netflix TechBlogOfficial Website Available at : https://netflixtechblog.com/building-the-new-netflix-experience-for-tv-920d71d875de [Accessed on 8.11.2023]
NETFLIX. (2023)Renewable Energy at Netflix: An Update – About Netflix Official Website Available at : https://about.netflix.com/en/news/renewable-energy-at-netflix-an-update [Accessed on 8.11.2023]
