Strategic Management for Netflix in Online Video Streaming Business in UK

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Executive Summary:
The report aims at providing an insight into strategic management from the point of view
of the management consultant for Netflix in relation to online video streaming business in UK.
Netflix is a media service provider headquartered in California. The report commences with a
discussion on the key drivers of change in the macro environment in relation to the online
streaming business. The report thus focused on the political, economical, social, technological,
legal and environmental factors of the chosen geographical area in relation to the online
streaming business. The report also puts forward the drivers of profitability within the industry
by focusing on the five forces of porters. These factors includes bargaining power of the buyers,
bargaining power of the suppliers, degree of rivalry amongst the competitors, threat of the new
entrants and threat of the substitutes. The report also indentifies the opportunities as well as the
threats faced by Netflix in the online streaming of video. The opportunities include Netflix’s
assurance in streaming original content, collaboration with the mobile data and ensuring add free
entertainment. Netflix also faces threat in terms of the cultural and the political censorship,
unlawful means of streaming of the videos and the liabilities based on the ‘off balance’ sheet.
The report also portrays how the leadership of the company is capable of exploiting the
opportunities and countering the threats. It shows that Netflix utilizes the opportunities in
becoming a niche in the online video streaming companies, adopts a conglomerated strategy and
ensures a dominant global presence. The report also shows that to overcome the threats, Netflix
adopts strategy for entering the UK market, for dealing with the online streaming and the
issuance of the income statements for preparation of the content for the ‘Off balance streaming’.

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Table of Contents
Introduction:....................................................................................................................................3
Q1. Key Drivers of Change in Macro Environment of UK for Online Streaming Business..........3
Q2. Drivers of Profitability in the Online Streaming Business.......................................................5
Q3.a. Main Opportunities and Threats Netflix Faces in Online Video Streaming........................9
b. Company’s Leadership in Exploiting Opportunities and Countering Threats..........................11
Conclusion:....................................................................................................................................12
References:....................................................................................................................................12

3STRATEGIC MANAGEMENT
Introduction:
The report aims at providing an insight into strategic management from the perspective of
a management consultant for Netflix in respect of online video streaming business in UK. Netflix
is a provider of media services headquartered in the Los Gatos, California. Marc Randolph and
Reed Hastings in the Scotts Valley California found the company in the year 1997(netflix.com
2018). The primary business of the company is the subscription based media streaming service
that offers online streaming of television programs and films including the ones produced in
house. Netflix has close to 137 million subscribers across the world with 58.46 million
subscribers from United States. The initial business of Netflix were restricted to the sales of
DVD which was jettisoned by Hastings and expanded in the year 2007 through introduction of
the streaming media in addition to retaining the Blu ray and DVD rental service. Netflix
underwent an international expansion in the year 2010 with streaming facilities in Canada,
Caribbean and Latin America. As per the records of 2017, the net income of Netflix had an
annual income close to US$559 million (nasdaq.com 2018). The report focuses on the key
drivers of change in the macro environment of United Kingdom for online streaming business
put forward by Netflix. The report also focuses on the drivers of profitability of the industry
with the help of Porter’s five forces. There is also identification of the key opportunities and
threats faced by the online video streaming industry. The report also focuses on the company’s
leadership in exploiting the counter threats and opportunities.
Q1. Key Drivers of Change in Macro Environment of UK for Online Streaming Business