SWOT Analysis and Service Marketing Challenges of Netflix

This report presents a SWOT analysis of Netflix and analyses the key service marketing challenges faced by the organization. It also provides recommendations based on theoretical principles of services marketing to overcome these challenges.

Principles of Marketing Individual
written Report

TABLE OF CONTENT
INTRODUCTION 3
MAIN BODY 3
Presenting SWOT analysis of Netflix 3
Analysing organization’s key service marketing challenges 4
Analysing the threats relating to theoretical principles of services marketing 6
CONCLUSION 6
REFERENCES 7
INTRODUCTION
Proper marketing techniques used by the company helps in earning higher amount of revenues in the most efficient manner (Polanco-Diges and Debasa,
2020). Furthermore, the present report is based on Netflix that is well-known American subscription streaming service and production company that provides variety of
online videos and movies on paid basis (Netflix, 2022). Also, report will analyse strengths and weakness faced by the organization and will also help in identifying the
key service marketing challenges that would be faced by the firm in the coming years. Lastly, the study will present theoretical principles of services marketing and
will provide set of recommendation that would help the company to overcome the future challenges in most efficient manner.
MAIN BODY
Presenting SWOT analysis of Netflix
Netflix had been successful over the years through providing the best customer satisfaction across various regions. Also, there are certain things that are still lacking
and could be easily identified through presenting the SWOT analysis in detail, as shown below in Table 1.

Table 1: SWOT analysis of Netflix
STRENGTHS
●
The Best growth (Jenner, 2018)
●
Brand reputation (Shi and Zhou, 2021)
WEAKNESS
●
Piracy (Raats and Evens, 2021)
●
Increasing debt (Steck and et.al., 2021).
●
Growing operational cost:
●
Lack of good customer service executives (Meng and et.al., 2022)
● Netflix’s “Blonde” lacks direction, empathy as per BBC reports in
recent time that is not good for company brand image (BBC, 2022)
OPPORTUNITIES
●
Expand global customer (Lotz, 2021).
●
Introduce cheaper subscription (Meng, and et.al., 2022)
●
Alliances (Ismoilova Mirkhadja and Nabieva, 2021),
THREATS
●
Government regulation (Pilipets, 2019)
●
Rigid pricing (Woodham, 2018).
●
Account hacking (Amat and et.al., 2018),
Summary:
STRENGTHS
The Best growth: In certain reports it has been identified that in last 10 years the company had become the most influential brand for the online streaming that has
made satisfied not only the US people but lot of people around the world (Shi and Zhou, 2021).
Brand reputation: The company has brand value in the market that has helped in generating lot of revenues all around the world . Furthermore, the brand value is
established in way that has created lot of awareness among the people (Ismoilova, Mirkhadja and Nabieva, 2021).
WEAKNESS
Piracy: Digital media is one that is at the peak that has the option of downloading the data and other related content which might not allow enough subscribers to the
company (Amat and et.al., 2018). Also, the company revenues are based on subscription and if such situation exists than it would negatively impact future working of
the firm.

Increasing debt: Netflix is being supplying the diversified content across various regions that required large amount of money (Steck and et.al., 2021). Furthermore, in
certain reports it was stated that in April 2020 the company had the overall debt of 14.17 billion that is major weakness for the future growth and running of the
business (Dwyer and et.al., 2018)
Growing operational cost: To survive in the era where there are lot of changing market requirements it is very essential to remain competitive (Hopkins and et.al.,
2021). However, it has been seen that company had not been able to gain enough of the subscribers' that would not help the business to earn enough amount of
revenues in the future. Also,
Lack of good customer service executives: The company also has failed to hire their customer executives through which company might be able to attract more
subscribers in the future (Bansal, Burden and Swartout, 2020). Furthermore, it has been seen that Netflix executives in UK are struggling in finding out ways through
which increasing cases of password sharing through one single account could be reduced in long run so that more revenues are generated in end (BBC,2022)
OPPORTUNITIES
Expand global customer : With having the good amount of subscribers the company has the opportunity of expanding its services and subscribers (Lotz, 2021).
Further, Netflix has the opportunity to expand its operations into various other regions so that more global customers segments would help in generating the best
revenues.
Introduce cheaper subscription: Netflix has another opportunity of introducing the cheaper subscription in target markets so that more customers could be added
within the brand. Also, through reducing the price more people could be added on this online platform that is very essential for ensuring continuous growth of the
business in long run (Gubíniová and et.al., 2021).
Alliances: In order to aid others and receive more financial support when they need it, Netflix has the potential to partner with other businesses. (Jenner, 2018)
THREATS
Government regulation: As the company is operating on large scale there are certain online streaming restrictions that would not allow the company to telecast certain
content on its platforms that might reduce the overall customer segment for the firm in the future (Pilipets, 2019). For instance: Recently it was known that all the
online streaming services will fall under the OFCOM that is communication regular in UK that would restrict certain content on online platform.
Rigid pricing: Customers are little unsatisfied with the company because it follows the rigid pricing policy where only three pricing options are being provided such as
standard, basic and premium (Meng and et.al., 2022). Thus, lack of different options had not allowed new subscription within the company. Also, in BBC it was stated
that due to this the company has lost millions of subscribers that affects the company growth negatively (BBC, 2022)
Account hacking: Also, Netflix is run through the online platform that has the higher chances of account being hacked (Kostovska, Raats and Donders, 2020). Also, if
such type of situation exists than it would simply means that there are more of unsatisfied customers in current and future times.
Thus, overall it can be said that OFCOM will regulate the programme content and this would simply affect the working of the business in long run as only limited
content would be provided to Netflix subscribers that would affects the growth of business ( Streaming revolution stretches TV generation gap, 2022). Also, OFCOM
has recently found out that those aged 65 watch more videos than the younger generations thus creating the huge gap. Thus, such kind of the generation gap would
create problems for company to attract younger generations subscribers towards providing various online services.

Analysing organization’s key service marketing challenges
Service marketing theory is one that relates to four major character tics that needs to be focused by each firm that is operating across various regions.
Furthermore, specific charactertics
includes intangibility, heterogeneity, inseparability and perishability (Baron, Harris and Hilton, 2018.). Thus, all specific features need to be unique by the firm so that
it would be able to differentiate from others. Though the Netflix is very much known and popular but the company needs to assure that right kind of marketing
strategies are ben used within the business (Pilipets, 2019). Also, if such kind of strategies are not been used than it would create problems for the business as their lot
of online service platforms that are capable enough to provide the quality data to large number of customers. Thus, below are some challenges that might affect the
efficiency of the business and its create marketing challenges in future
Lack of good customer service executives:
Customers are the prime reason due to which the company is able to earn revenues and build the best brand image in the market. Also, it has been reportedly seen that
company lacks the best customer executives that would help the business to resolve certain queries of the customers located in different region. Moreover, marketing of
the company could be planned in proper way only when company is having best of candidates that are experienced enough to handle the customer and its queries on
large scale (Quyen, 2022). Furthermore, it is very essential that there is proper communication process that is been followed so that customer does not become angry
and frustrated. Thus, this is one of the challenge the company would be facing in coming three years and thus it would require immediate actions so that bets marketing
in the market could be established (BBC, 2022). Also, this weakness could become threat to the firm as it in certain reports it was identified that the company has
adopted rigid hiring policy where only those candidates are been hired that are well experienced over the years. However, such condition does not allow the fresh
talents with no prior experience that had the required skills to showcase these competencies within the firm. Hence, such kind of problem will only decrease the overall
efficiency of the firm in long run.
Loss of revenues
As the company is responsible to earn enough profits to survive in changing markets, one of the major problem of Netflix is facing growing number of
debts due to which the company would not be able to plan better marketing strategies in the future (Ismoilova, Mirkhadja and Nabieva, 2021). Also, this is because
various newer platforms like Disney hot-star, amazon prime etc. have come up in the market that are offering the best subscriptions rates to large number of customers
located in different regions.
THREATS
Analysing the threats and recommendations relating to theoretical principles of services marketing
There are several service marketing principles based on theory such as stay current, listening to the customers, providing evidence etc. might be used by
the business so that several threats like increasing debts, poor customer care executives, lack of green initiatives might be overcome in the efficient manner. Further,
below is list of recommendations that would help Netflix to plan better service marketing strategies in the future.

● It is been suggested to the firm that to ensure effective marketing it should use STP analysis so that better segmentation, targeting and positioning of the
firm could be made (Bennett, 2018)
Also, through conduct of such analysis the company would be able to plan things in more the best manner and would follow the principles of staying current in ever-
changing global markets (Woodham, 2018). Furthermore, STP analysis would help Netflix to retarget the market in best way as it would segment the market through
reaching new markets. New target would be more of old age people and their content and positioning would have done through reducing the prices of subscriptions.
Moreover, this would help in overcoming the threats of rigid pricing in the future.
●
Furthermore, it is been recommended to the firm that it should focus on listening to the customers more often so that customers remain satisfied with the
current sales executives that would help in solving various problems being faced (Shi and Zhou, 2021) Moreover, this could be achieved through having the best
customer relationship management system that would allow the Netflix to know what are the areas regarding the customers that requires immediate actions to be taken
for the future improvement.

REFERENCES
Books and Journals
Amat, F. and et.al., (2018), September. Artwork personalization at Netflix. In Proceedings of the 12th ACM conference on recommender systems (pp. 487-488).
Bansal, S., Burden, K. and Swartout, B., (2020). Utilities Can Improve Customer Experience to Meet Growing Customer Expectations. Climate and Energy, 37(3),
pp.9-18.
Bennett, C., (2018). Presentation Technology–Enriching the Client Experience in a Physical and Virtual World. The WealthTech Book: The FinTech Handbook for
Investors, Entrepreneurs and Finance Visionaries, pp.74-76.
Dwyer, T. and et.al., (2018). Comparing digital media industries in South Korea and Australia: The case of Netflix take-up. International Journal of Communication.
12. p.20.
Gubíniová, K. and et.al., (2021). Marketing communication and its role in the process of creating rational awareness of generation Z representatives. In Developments
in Information & Knowledge Management for Business Applications (pp. 203-221). Springer, Cham.
Hopkins, C. D. and et.al., (2021). Changing perceptions of marketing ethics and social responsibility in principles of marketing. Journal of Marketing Education. 43(2).
pp.244-259.
Ismoilova, G., Mirkhadja, D. and Nabieva, F., (2021), November. The Role of Processing Information in Digital Marketing. In 2021 International Conference on
Information Science and Communications Technologies (ICISCT) (pp. 1-4). IEEE.
Jenner, M., 2018. Introduction: Binge-Watching Netflix. In Netflix and the Re-invention of Television (pp. 109-118). Palgrave Macmillan, Cham.
Kostovska, I., Raats, T. and Donders, K., (2020). The rise of the ‘Netflix tax’and what it means for sustaining European audiovisual markets. Innovation: The European
Journal of Social Science Research. 33(4). pp.423-441.
Lotz, A. D., (2021). In between the global and the local: Mapping the geographies of Netflix as a multinational service. International Journal of Cultural Studies, 24(2),
pp.195-215.
Meng, H. and et.al., (2022), July. An Assessment about the Business and Profitability Analysis for Netflix. In 2022 2nd International Conference on Enterprise
Management and Economic Development (ICEMED 2022) (pp. 467-477). Atlantis Press.
Pilipets, E., (2019). From Netflix streaming to Netflix and chill: The (dis) connected body of serial binge-viewer. Social Media+ Society. 5(4). p.2056305119883426.
Polanco-Diges, L. and Debasa, F., (2020). The use of digital marketing strategies in the sharing economy: A literature review. Journal of Spatial and Organizational
Dynamics. 8(3).pp.217-229.
Quyen, N. T. A., (2022). The impact of marketing on activities of Vietnam arts and cultural organizations. Linguistics and Culture Review. 6(1). pp.99-109.
Raats, T. and Evens, T., (2021). ‘If you can’t beat them, be them’: A critical analysis of local streaming platform and Netflix alternative Streamz. MedieKultur: Journal
of media and communication research, 37(70), pp.050-065.
Shi, Y. and Zhou, J., (2021), October. Analysis of Foreign Video Streaming Service Entering Chinese Streaming Media Market: A Case Study of Netflix. In 2021
International Conference on Public Relations and Social Sciences (ICPRSS 2021) (pp. 337-343). Atlantis Press.
Steck, H. and et.al., (2021). Deep learning for recommender systems: A Netflix case study. AI Magazine. 42(3). pp.7-18.

Woodham, O. P., (2018). Testing the effectiveness of a marketing simulation to improve course performance. Marketing Education Review. 28(3). pp.203-216.
Baron, S., Harris, K. and Hilton, T., (2018). Services marketing: text and cases. Bloomsbury Publishing.
Online
BBC. (2022). [Online]. Available through: <https://www.bbc.com/news/business-62226912>.
Netflix. (2022). [Online]. Available through:< https://ir.netflix.net/financials/annual-reports-and-proxies/default.aspx>.
Streaming revolution stretches TV generation gap. (2022). [Online]. Available through: https://www.ofcom.org.uk/news-centre/2022/streaming-revolution-stretches-tv-
generation-gap.