Global Strategy and Sustainability Insights Case Study

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Introdcution

The sustainability and global strategy provide the understanding about the behaviours, procedures and some forces which are effecting the environment. Netflix is the American streaming services which provide the acquired films, television shows. The report will shed light on external and internal environment factor of the organization, more some strategies which are related to the global environment. The report will discuss about the corporate strategies for improving the supply chain globally. The report will delve into Netflix’s strategic purpose about the ethics and CSR model.

Task 1: The External and Internal Environment

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1.1 The External and Internal Environment

PESTEL analysis of the Netflix

Political factors: The political factor about the Netflix is censorship factors which is an issue for the organization. However, the content has been prohibited in the some country like china. Due to some rules and regulations of government the whole content of Netflix is not available in every country and for the audience. The restricted access is not allowed by Netflix to function in numerous of countries. If the Netflix agrees to allow it but government doesn’t permit for view it.

Economic factors: The fluctuation in the exchange rate put impact on the economy when it comes about purchasing content from others. Additionally, Netflix can have profit only form the original content such as TV shows and Movies. The loyal customers often make complain about the continuous hike in the price subscription. The high- quality content is the remedy to audience to make them know the content is worth the money (World Health Organization, 2020). Nowadays, the competition is increasing in the streaming services; this is the biggest threat for the Netflix. The platform is raising itself with the highest quality content. The massive threat is content privacy for The Company, this factor affects the profitability.

Social factors: The work force working environment works in the favour of the organization. The CEO and Netflix are known for the generous nature and the kindest gesture of which have touched the people (Netflix PESTEL Analysis, 2023). For the black people they allocate 2% of the annual income and also make support for the students with low incomes families. The biggest benefit is the flexibility of the company, along with the seeing the live streaming with the latest trend, only Netflix has the power to made it possible.

Technological factors: Everyone can use Netflix on the high quality of videos along with the minimal use of data spending, this is the biggest example of it among the numerous of advantages. The on-going changes in the algorithms can confuse the audience; the best instance about the app is rating system of the content. Moreover, the most popular among audience is automatic translation software.

Environmental factors: Recently the organization invests in the joining hands with the EPA it shows the enthusiasm to change in the new energy. The increasing in the awareness of environment can lead to the growth of the company. The step headed for the sustainable future involves the reductions of paper in the office of the company. The company operates in the online platform so it can’t effect the environment directly but the consumption electrically is high on the earth.

Legal factors: The unexpected hike in the subscription leads conflicts between the customers and company. Numerous clients who are dissatisfied with the prices filed class action for the company. Netflix has been facing issues due to on-going copyrights with the small segments of the clients. Company has to come with the strategy which is suitable for all without blocking audience from the different countries.

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1.2 Determining Netflix Inc.’s current sources of competitive advantage

VRIO analysis of the Netflix

Global Strategy and Sustainability Insights Case Study

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Value: The available resources are valuable if they permit the organization to improve the effectiveness and productivity via facilitator strategy. The organization has its presence in the numerous locations internationally (VRIO Analysis of Netflix, 2023). The organization is focusing on expanding the manufacturing operations in the various countries such as Europe and Asia.

Rare: The organization is having permission of special licensing permissions for producing and manufacturing in numerous countries that are more than remote towards firms which is internationally.

Inimitable: The unique culture of the Netflix is being developed via beliefs and core values, focusing on the managing the style (Eyhorn, et al, 2019). The organization has strong department of HRM which emphasis on the new opportunities and activities related to training and development.

Organized: The best method to develop the physical infrastructure of the different external and internal chances is the by capitalization of the opportunities.

Porter’s five force of the Netflix

Competitions in the industry: The competitors’ analysis showcases the competition in the industry of content it is the strong force. The new entrants have the obstacles due to the low profits and costs. Moreover, it is the simple for the organizations which is already paying with the areas like HBO and Amazon, Which are venturing in the operating models.

The threat of new entrants: The numbers of the barriers are available for the new entrants in this industry; just few of them can get success in the industry. The present competitors are aware and got progress in the clientele base. New entrant’s threat is low to the Netflix 2000 because the platform has a big network side internationally; Netflix has an image which is well reputed among the clients and market.

The bargaining power of the suppliers: The Netflix is dealing with the content which is from expensive commodity to products; in the market the few suppliers are available. Due to the few suppliers, the Netflix is having dominant effect on the emerging market. If the some new suppliers are entering the VOD market or the clients, Due to they need to brand the content for their organization. The recent incident was the removal of the friends from the Netflix due to in favour of the HBO.

The bargaining power of the customers: The switching cost of the consumers with the services is available at very less cost differences. The main motive is not the price; it is about the content quality. The customers of the Netflix are paying every month; the five forces model is not dependent on the annual contracts. By seeing the all factors it made the bargaining power of the clients a strong force in porter’s five force of the Netflix.

Threat of substitute products or services: In the industry available substitute are only few, so the substitutes are very moderate (Rume and Islam 2020). The company has the threat from the organizations which are producing similar content on the streaming and DVDs. The Biggest threat is the accessibility of the other opportunities of entertainment and leisure activity.

1.3 Supporting arguments with academic literature

On the critical note there numerous factors which are affecting the internal and external environment. Political factors are about the rules and regulations of the Netflix which is different in every country. On the economic factor, Netflix has profit from its own content only. On the bases of the social and technology factors the organization is working on the favour of the generous nature and the rating system is the best factor in it (Nizam et al, 2019).

Task 2 – Strategy in the Global Environment

2.1 Critically evaluating the motives for Netflix Inc.’s international expansion

The Globalisation framework is showing the choice of the markets is influence with the presence of the customers with the power of purchasing and the available internet broadband. The model is focusing on the process of the operational globalisations. The next phase of the Netflix is continuation of the learning about the international market and Netflix wants to make diversify the audience (Hiep et al 2021). The expansion in the Africa, Europe, Middle East and Asia need to venture the non- English countries internationally. The company need to face many obstacles such as data protection, taxation legislation, privacy laws; culture and local rivalry pose main challenges in the international platform.

The main goal of the Netflix is to expand the vast content in the different country to build the digital platform globally. However, it is very vital to create and maintain the trust on the international platform, which needs encryption technologies, security measure and some privacy policies for protecting the data (Hadley et al 2020). The business shape a robust presence in the new market, it creates a new base of customers which diversify the growth of the company. On the other hand managing and developing the team on the international level is hard, the organization has to face limitless resource to know the diversify cultures and different business environment. Increasing in the new marker is all about increasing the customer base.

2.2 Identifying the Strategic Option(s) of Internationalisation

By using the global strategy Netflix can enter the Middle East, Africa and Europe. It helps in sacrifice the responsiveness to the local needs within the market. The strategy is totally opposite to the strategy of the multi domestic. Few alternations to the products and services Netflix can gain economical scales for the services and products in the market place. This strategy helps the organization to improve the marketplace on the international bases as well. Netflix is grounded on the strategies which are related to the integrating marketing; The global strategy can describe the needs in every single international market and show the responsibilities.

2.3 Applying at THREE Entry Strategies to illustrate how Netflix Inc. can enter and compete

Merger: With the merger entry strategies, The Netflix can have new subscribers and can know about the culture preferences. It offers the largest and fastest offer quick advantages. The approach offers quick involvement in the new market due to the merging with the company.

Acquisition: By strategy of acquisition offers a scale when it needed, it offers gaining control over the operations, productions, resources and market share (Caradonna 2022). By undertaking acquisition strategy Netflix can enhance the stream services and can gain the value in the market. By entering in international market the company can foothold its image.

Joint venture: By joint venturing with the foreign market can share the risk and rewards, by joint venturing with the some companies can be beneficial for the organization. This offers a sharing of the risk, strengthen the international client base.

2.4 Support arguments with academic literature

In the critical note the entry strategies are beneficial for Netflix to enter in the new market. By using merger entry the Netflix can stream in the every culture and gain the clients in the other countries and improve the revenue. On the critical bases by utilising acquisition strategy offers gaining in the valuable market place and focus on the penetration. It offers achievement on the economical bases and offer aces to the synergies and in entering new market (Hiep et al, 2021). However on the critical note the joint venturing emphasis on the value choice in entering new market and it permit the organization to reduce the risk by sharing of it. Due to the joint venture can get some advantages from the partners who are local.

Task 3 – Corporate Strategy

3.1 Evaluating how Netflix Inc. can improve its supply chain globally by applying Corporate Strategies

The organization can improve the supply chain globally with the Vertical integration, the organization is offering a subscription bases stream services but the organization has to focus on the producing the content. The strategy permits the Netflix to Control the process entirely and distribute the range from the start point to final product (Ponte 2019). The Horizontal integration can try to entail the partner with the numerous mobile and home entertainment platform bases, can offer platform for the video games, PCs TV rooms and mobile phones. Netflix can give permission to the viewers to stream from anywhere or anytime, there can’t be any limitation of the content. Streaming can be used in the supply chain such as can live stream the information and mark the exact locations. To improve the data supply chain can use logistics and IOT with the algorithm learning.

3.2 Using a suitable model or framework, show how Netflix Inc. can increase their profitability

By making use of the Ansoff matrix Netflix can improve the profits, the model helps in evaluation of the growth strategies which can leverage the products which already exists. For the Netflix Marker penetration is the best to enhance the profit, by giving them ease and affordable services. The company can offer free streaming and extra channels to the viewers with the no time limit. This can help the organization to grow more and make more profit from the international countries (Naylor et al 2021). By using the penetration strategy helps to speed up the acceptance of services and products among the customers. By starting it with the low price can put the pressure on the sale of rate. With the use of strategy other market rivals can be off guarded, it can make them to low the prices. With the starting low and aiming high, it can make effect to create goodwill and amass buyers. The strategy can enhance the volume of the sale to lower the risks, this can help the organization to increase the sale and make the profit more.

3.3 Supporting the arguments with academic literature

On the critical bases Netflix can improve the supply chain by using horizontal and vertical integration, the vertical integration can be beneficial in the offering stream which can be subscription based and control the beginning to final products. In the Horizontal integration, can create numerous platforms for entertainment, gaming etc. However on the critical note the strategy can’t always work as expected (Nizam et al, 2019). The strategies can create poor fit in the culture and companies, this create uncertainty in the pending layoffs and M & A integration issues. Throughout the Ansoff matrix, for the Netflix penetration strategy can be the best in the initial level on globally. This can create a good brand image about the company and pricing policies. On the critical note penetration strategy can reduce the price and it can affect the profit which can be lower than other countries.

Task 4 – Strategic Purpose – Ethics and Csr

4.1 Analysing and evaluating Netflix Inc’s CSR strategy using a relevant CSR model

By using Carroll model it explains the responsibilities towards the society, the Carroll’s CSR offers to the economical profits, align with the laws and support it socially and ethically.

Economic responsibility in Carroll’s model

Netflix is adhering to the economic responsibility: Netflix fulfil the economical responsibilities by focusing on the long term growth and set the ethical and environmental levels. Company focuses on the balancing the services and products which is needed by the society, the economical scale is consider as social responsibilities. The Netflix is considered as a sell and manufacture of the goods which can make profit and benefits to the stakeholders.

Legal responsibility in Carroll’s model

Netflix’s legal responsibilities includes the compliance with the rules and laws, Netflix is expected to make sure about the agreements meanwhile operating with the society (Rees 2021). These rules and regulations reflect the point of view of the ethics and can focus on conducting the business in fair and transparent method.

Ethical responsibility in Carroll’s model

Netflix has the ethical responsibilities align with the all kind of key stakeholders; make the fulfilment in the ethical responsibilities to embrace the concerned stakeholders. Netflix focus on the all stakeholder’s leadership, suppliers, leadership and customers clearly. The responsibility which is extends beyond the normal expectations (Carroll's Pyramid of Corporate Social Responsibility, 2023). By having the responsibilities, it embraces the practice and activities

Philanthropic responsibility in Carroll’s model

Netflix contributes ten million dollars to the reasons around the world each year. Aside from picking specific reason, Netflix do this via a two-to-one worker match. The main responsibility is about the regulatory and legal expectations. It is regarding “good corporate citizen” enhancing the world.

4.2 Discussing the main ethical issues which Netflix Inc. currently face

The main issues which Netflix is facing are about the content moderation and privacy of the data. The organization is facing the data analytics to customise the recommendations. It can track the behaviour of the users and understand about the privacy rights and the responsibilities about the customer’s data. The ethics of the business are significant for running the Netflix successfully, an ethical issue occurs when the company organization or the workers face an options form the two replacements.

Data protection: One of the main challenges is faced by the Netflix is about the security challenge which is related to the cloud environment and virtualized protection for the data. The services about the streaming, the organization collect and store the huge amount of the data, which is related to the sensitive customers, involving the personal data and viewing the history (Nizam et al 2019). The main risk includes the access that is unauthorized, breached of the data and some data security laws. Netflix should focus on the making some policies regarding the security of the data, regular information about the clientele data.

Production of the content: The main issues is about the prosecution of the content which includes the unethical accounting, data privacy, health and safety norms, harassment, discrimination. The Netflix should focus on the content creation which is safe for the all age group and clear reviews.

Cultural demonstration: Since the organization is adopting the streaming services, it has effect on the culture and the people views of the people (Gardner et al 2019). The organization should focus on the diversity with training activities which can includes the sessions about the culture norms and involve the comprehensive storytelling.

The Comparison of the CSR model of the Amazon prime, the organization needs to focus on the benchmarking and by delivering the products which will not damage the environment. This includes the supply chain, rights of the employees, environmental sustainability.

4.3 Supporting the arguments with academic literature

The CSR and ethical issues are numerous which has been faced by the Netflix. On the Critical note the numerous responsibilities, the economical responsibilities which set the environment issues due to numerous of factors (Ponte, 2019). On the critical point of view, The CSR model for the organization is not stable and need to be aligning with the rules and regulations.

CONCLUSION

By concluding the report it delves into the external and internal environment of the Netflix, by using the VRIO and PESTEL analysis, it provides the deeper insight into the rules and regulations, loyal customers, content, environment works, etc. The factors provide the position of the Netflix in the market place and some environmental factors. The strategy related to global environment which showcase the power of the customers and the global strategy of the Netflix. The Netflix can improve the supply chain within international market place, by using vertical integration since it can easily control the overall process. By utilisation of the Carroll’s model, Netflix can fulfil the responsibilities and reduce the ethical issues.

REFERENCES

Books and journals

• Caradonna, J.L., 2022. Sustainability: A history. Oxford University Press.
• Eyhorn, F., Muller, A., Reganold, J.P., Frison, E., Herren, H.R., Luttikholt, L., Mueller, A., Sanders, J., Scialabba, N.E.H., Seufert, V. and Smith, P., 2019. Sustainability in global agriculture driven by organic farming. Nature sustainability, 2(4), pp.253-255.
• Gardner, T.A., Benzie, M., Börner, J., Dawkins, E., Fick, S., Garrett, R., Godar, J., Grimard, A., Lake, S., Larsen, R.K. and Mardas, N., 2019. Transparency and sustainability in global commodity supply chains. World Development, 121, pp.163-177.
• Hadley, T.D., Pettit, R.W., Malik, T., Khoei, A.A. and Salihu, H.M., 2020. Artificial intelligence in global health—a framework and strategy for adoption and sustainability. International Journal of Maternal and Child Health and AIDS, 9(1), p.121.
• Hiep, P.M., Tien, N.H., Dana, L.P., Kuc, B.R., Van Tien, N. and Ha, V.X., 2021. Enhancing social responsibility and sustainability in real estate industry. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(14), pp.4999-5013.
• Naylor, R.L., Hardy, R.W., Buschmann, A.H., Bush, S.R., Cao, L., Klinger, D.H., Little, D.C., Lubchenco, J., Shumway, S.E. and Troell, M., 2021. A 20-year retrospective review of global aquaculture. Nature, 591(7851), pp.551-563.
• Nizam, E., Ng, A., Dewandaru, G., Nagayev, R. and Nkoba, M.A., 2019. The impact of social and environmental sustainability on financial performance: A global analysis of the banking sector. Journal of Multinational Financial Management, 49, pp.35-53.
• Ponte, S., 2019. Business, power and sustainability in a world of global value chains. Bloomsbury Publishing.
• Rees, W.E., 2021. Achieving sustainability: reform or transformation?. In The Earthscan reader in sustainable cities (pp. 22-52). Routledge.
• Rume, T. and Islam, S.D.U., 2020. Environmental effects of COVID-19 pandemic and potential strategies of sustainability. Heliyon, 6(9).
• World Health Organization, 2020. Global strategy to accelerate the elimination of cervical cancer as a public health problem. World Health Organization.
• Online
• Carroll's Pyramid of Corporate Social Responsibility. 2023. Online. Available through <https://www.mindtools.com/avhp0vj/carrolls-pyramid-of-corporate-social-responsibility>
• Netflix PESTEL Analysis. 2023. Online. Available through https://www.edrawmax.com/artcile/netflix-pestel-analysis.html
• VRIO Analysis of Netflix. 2023. Online. Available through https://abhijeetpratap.medium.com/vrio-analysis-of-netflix-2a67751f9408