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

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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.

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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]

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