Managing strategy - Essay Example

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The streaming services of Netflix are available on televisions, personal computers and smartphones and other mobile devices. The…
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Managing strategy
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Download file to see previous pages The company’s maximum revenue is earned from the domestic streaming services, which accounts for $2.75 billion of revenue generation. Netflix is dominant in the American market, which generates almost 84% of its revenue (Marketline, 2014). This paper discusses the external and internal environment of Netflix, using theoretical models like PESTLE framework, porter’s five forces, VRIN framework, Value chain model etc. This is followed by the discussion of the challenges faced by Netflix along with the vantage point which the company has leveraged. The paper further discusses about the company’s strategic growth options which have been justified in the light of relevant facts and theories. Finally the paper will conclude with the summary of the major findings from the study, followed by recommendation on the chosen strategic decisions.
Political influence: Netflix operates in the movie streaming and DVD rental business, which is rarely affected by the political scenario of a region. However, the political framework can impose certain regulations and ban particular movies with controversial content. Movies with political storyline often bring controversies and are eventually banned in several countries, which affect the business of Netflix.
Economic influence: The economic condition of a region highly influences the business operation of a firm. The movie steaming and rental business is highly dependent on the disposable income of the consumers. Moreover, movies are considered to be leisure products and a customer will spend on watching movies only when his disposable income is in and above satisfactory level. The economic crisis of 2012 has impacted the sales of Netflix significantly as it has reduced the number of viewership and subscriptions (Li, 2013). Moreover, the economic crisis has also led to lower number of film productions.
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