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Netflix In India The Way Ahead Case Solution
Netflix is an American internet-based entertainment service provider company. It provides subscription-based video streaming service as its primary mode of revenue. The digital landscape has evolved to a great extent, and the entertainment industry has also adapted itself with the latest trends. It provides a platform where people can enjoy the latest films and series. Netflix officially launched its services in India in 2016. India is seen as a huge market for the American company, with a reasonable rate of internet penetration (Aguiar & Waldfogel, 2018). It is important to throw some light on some of the aspects pertaining to different factors in the Indian market environment, to determine the viability of this entry of Netflix in India.
Following questions are answered in this case study solution:
Macro Environmental Factors Affecting Netflix in India
SWOT Analysis of Netflix Business Model in India
Strategies for Netflix to succeed in the Indian Market
Case Study Questions Answers
1. Macro Environmental Factors Affecting Netflix in India
There are different external factors that affect the entry of a foreign brand in a country. When a foreign entity enters an industrial infrastructure, it has to combat different issues pertaining to that system. These factors are political, economic, social, technological, ecological, and legal. India has welcomed foreign companies at an increasing pace, particularly after the post-1990 economic reforms in the Indian economy.
Political factors might play an important role in the Netflix business. Although India is characterized as the biggest democracy in the world, the role of government support and censor services have played an essential role in the overall entertainment industry. The government has recently developed relatively stringent regulations for foreign entities like Amazon, and this can impact the business of Netflix in the future. Economic factors can play a very important role in the future success of the company. Netflix is not a free service and charges primarily a fee for monthly subscriptions from its customers. People spend a certain proportion of their incomes on leisure and entertainment, and Netflix provides entertainment service in a convenient manner for them. However, rising inflation and lower-income levels might not be conducive to the business of Netflix. Nonetheless, India is increasingly experiencing a shift towards the service economy from the manufacturing economy (Lobato, 2019). This can provide great prospects for Netflix’s business, as it can benefit from the growing service economy of the country.
Furthermore, social factors such as demographic trends can create a huge difference for Netflix. According to the World Economic Forum, the country is home to one-fifth of the world's youth. Youth are mostly inclined towards buying subscriptions from the company, and this shows that the Indian market offers great potential to this foreign entity. The urban society of the country particularly takes a lot of interest in entertainment and cinema produced in the country. Apart from this, technological factors are also important, as they are disrupting different business models across various industries. E-commerce business in India has exceeded $100 billion, and a lot of people are using online service, which is a big opportunity for Netflix, for the reason that it offers internet-based services (Anute & Ahire, 2020). There is a high level of acceptance in Indian society towards digital evolution. However, the company has to develop a more flexible supply chain and business market, keeping in view the requirements of the local market.
Legal factors can also play a crucial role in the effective operation of the business in the future. Netflix will be required to strictly adhere to intellectual property rights and has to consider censorship issues during the launch of any entertainment content on their platform (Anute & Ahire, 2020). It will also have to strictly abide by other pertinent laws like employment, monopoly, responsible business practices, and others to ensure that their business is not only profitable but also within the ambit of the legal infrastructure of the country.
2. SWOT Analysis of Netflix Business Model in India
Netflix has adopted an aggressive strategy in India, as it seeks to effectively penetrate the Indian market. It offers multiple subscription plans to its customers, from the mobile-only plan of Rs. 199 to Rs, 800 premium plans, helping different users to enjoy the contents of their choice. Apart from offering cost convenient services, it is also spending heavily on the local content in the Indian market, as it also wants to target a mass audience in India who might not feel that attracted towards the foreign content. The SWOT analysis of this model will help to determine the extent of its success in the coming days for the foreign brand.
Netflix has developed a strong ecosystem that facilitates online users in enjoying their favourite entertainment shows. The brand has become a household name, and this image is a strength for Netflix in the Indian market as well. It is also providing clutter-breaking content for its various foreign markets. This can serve as a great strength for Netflix, particularly taking in view the perspective that the young generation is looking for watching and enjoying innovative content (Lobato, 2019). It is also offering different plans to its customers, ensuring that people from the different socio-economic backgrounds can enjoy the video streaming and subscribing services provided by the company. So, the pricing strategy followed by Netflix is also a strong aspect of the brand.
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