Netflix Furthering Its Reach

Netflix Furthering its Reach

In an interview held with Netflix company executives, a plan of action was discussed. Netflix Inc. has been offering quality video streaming to customers for years but there domestic subscriber numbers has fallen. The company plans to broaden their horizons by taking their services global. I found this to be quite interesting a decided to see if there plan follows what is in our textbook. In Chapter 1 (page 17), we are told that there are only four path that companies can take in order to increase growth. These paths are market penetration, market development, product development, and diversification. Since Netflix choosing to keep their existing product and trying to attract new customers, a plan for market development would be the logical choice. Netflix is doing just this.

Domestic sales have slowed and Netflix needs a new source of consumers. The action to take the company global is the logical next step for their company. In the eyes of the competition Netflix is reigning supreme. With competitors like RedBox and Hulu, there is really no contest. There is either a short number of available episodes or you have to physically leave to go and get your rental. But still, Netflix’s domestic sales are declining. Competition against Netflix is expected to increase in the near future from companies like Dish Network and HBO. When questioned about the possibility of new competition Mr. Hastings, a chief executive for Netflix, says that while the prices looking attractive he doesn’t see a desire for having Netflix changing in a negative way.

Netflix has already proved that they are able to implement a successful market development strategy(s). They have already expanded to 50 countries and plant to increase that number to 200 by 2017. The idea that Netflix with be successful comes one basic idea, availability. According to Hastings “The ability to click and watch and binge episodes has really resonated with people.” After their previous expansions in Canada, Nordic, and Latin American countries, the future looks brighter than ever. Soon after Netflix expanded to six different European countries and has seen similar results. Plans to expand to New Zealand, Australia, and China has also been discussed for the recent future. Taking their company to Chinese soil could prove somewhat bothersome however. In order to conduct business is China they would have to obtain a government issued business license, which is no easy task. Hastings states that if such a decision is made to venture into the Chinese market they will proceed with caution.