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FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL TRADE ♦♦♦♦♦ - REPORT INTERNATIONAL BUSINESS ANALYSIS OF INTERNATIONAL BUSINESS STRATEGY: THE CASE OF NETFLIX Lecturer : MSc Nguyen Hong Hanh Class code Group Members : KDOE307.2 : 17 : Duong Hoang Ngan Hoang Thu Phuong Tran Thi Thuy Nga Le Phuong Thao Pham Nguyen Tue Minh Hanoi, December 2021 1915550715 1915550022 1915550016 1915550027 1915550014 TABLE OF CONTENTS INTRODUCTION Section I Overview of Netflix Inc 1.1 Establishment history 1.2 Mission and vision statement 1.3 Netflix’s Organizational Culture Section II: International business strategy of Netflix Inc 2.1 Analysis of Netflix value chain model 2.1.1 Five primary activities in Netflix's value chain analysis 2.1.2 Four support activities in Netflix's value chain analysis 2.2 Netflix’s International Strategy and its result 2.2.1 The application of International Strategy 2.2.2 Implementation of Netflix’s International Strategy 11 Section III Challenges of Netflix's International Strategy 16 3.1 Regulatory Restrictions 17 3.2 Competition in the Global Markets 17 3.3 Financial Cost 19 CONCLUSION 21 REFERENCE 22 INTRODUCTION Audiovisual input and output devices are in abundance these days and so are movies and films Everyone watches videos, be it on TV, social media, or cinemas The film industry is one of the most impactful sectors in modern society Film has a uniquely powerful ubiquity within human culture, it has become an efficient vehicle for culture, education, leisure and propaganda Sitcoms and comedy shows make us laugh, psychological thrillers help us see the world from an improved perspective, and historical films help us understand where we’ve come from as a people Every video and every film reflects society and transforms opinions As the technology keeps growing, political and economic leaders have utilized cinema in changing and shaping people’s outlooks for their benefits Nowadays, when technology is developing and the world is starting to enter the 4.0 era, the demand for entertainment on convenient digital platforms in daily life is increasing, including the movie industry Especially with the Covid-19 outbreak showing no signs of stopping, people can no longer go to cinemas to watch movies or gather in crowded places As a result, the form of watching movies at home on the phone, computer, or TV will be much prefered Meeting the needs of the times, Netflix, an online streaming service, has become increasingly popular and penetrated deeply into people's daily lives, with thousands of movies in different genres translated into many languages Netflix recently made a move into the independent film category, where traditional movies in theaters typically face an uphill battle being seen Now, even small films can easily be seen on Netflix It is essentially a storehouse of content, including movies, documentaries, and television series, both pre-existing and its own Currently, Netflix is available in more than 190 countries and is becoming increasingly popular So, how did Netflix from a DVD rental company expand to such a global scale? In this report, we will analyze and delve deeply into Netflix's international business strategy to find out the answer Section I Overview of Netflix Inc 1.1 Establishment history Netflix, Inc happens to be one of the most successful entertainment companies of all time It was first founded in August of 1997 by two serial entrepreneurs, Marc Randolph and Reed Hastings The company began out in Scotts Valley, California Netflix, Inc originally began by providing services to customers through the delivery of physical copies of movies, shows, video games, and other forms of media through a standard mailing system Through a successful startup and the rapid changes that technology has introduced over time, Netflix has transformed its business model It has gone from physical releases to allowing customers to stream their favorite content comfortably Netflix's success can be attributed to two strategic moves: a three-stage expansion into new markets and how the company operates there In the first phase, Netflix didn’t try to enter all markets at once Instead, they carefully selected markets that were geographically and psychologically close, or were well aware of the differences between markets For example, the first plan to enter the international market was in Canada in 2010, which is geographically close and has many similarities with the US As a result, Netflix could develop its internationalization capabilities where the "foreign" challenges were less acute In the second phase, to expand to the international market faster and wider, Netflix had spread to 50 countries, based on the experiences in the first phase This phase helped Netflix continue to learn about internationalization and work with local stakeholders, while ensuring revenue growth In the third phase, using the experience from the previous periods, the strong expansion rate had brought Netflix to 190 countries The company is now well-versed in user preferences, marketing strategies, and internal organization Nowadays, the platform evolving streaming technologies has enhanced and improved Netflix's overall revenue and business structure The platform gives viewers the ability to stream and watch a variety of TV shows, movies, documentaries and more, through the medium using a software application Since Netflix's transition to streaming, it has been the world's seventh-largest internet company by revenue, including its presence on a global scale 1.2 Mission and vision statement With an aim of entertaining the world, Netflix wants to become the best global entertainment distribution service, license entertainment content around the world, create markets that are accessible to film makers and help content creators around the world to find a global audience 1.3 Netflix’s Organizational Culture Known as one of the most famous case studies of organizational culture in the world, Netflix Inc presents its organizational culture as unusual, especially with regard to how employees are encouraged to behave in the workplace The company applies its corporate culture to develop resilience among its workers, as a way to support growth in an increasingly competitive on-demand digital media streaming industry Though over 20 years passed, up to now Netflix has a high filtering function, is still relevant with the current development direction, even surpassing Google and Facebook, to stand at the #1 position in the dream workplace in 2020 (according to Hired.com) and #1 Best Leadership Company of 2020 (according to Comparably) Netflix’s CEO thinks company culture is the only competitive advantage he has full control over and affords to grow Netflix culture into a major asset of the business This is really forward thinking compared to many startups, SMEs that only focus on business development In 2009, the company published its Netflix Culture Deck material which fully, specifically, clearly explains the core values as well as the skills and behaviors confirmed in the culture They make it clear where they stand and where they want their employees to stand through aspects: Core Values, High Performance, Freedom and Responsibility, Context not Control, Highly aligned, Loosely coupled, Pay top of market, Promotions & Development In short, the Netflix Culture would emphasize on employee autonomy, communication, attitude, productivity, and rule avoidance to create a business situation where employees are motivated to take risks and deliver innovative ideas that contribute to the online company’s competitive advantage Such an organizational culture makes Netflix’s human resources flexible and readily responsive to challenges in the industry The expected behavioral outcomes of this corporate culture relate to the nature of the company’s operations in the on-demand media streaming industry For example, workers are motivated to share ideas that strengthen the alignment between Netflix’s service and market trends In terms of strategic planning, the organizational culture makes the streaming business capable of implementing strategies and tactics that utilize human resource ingenuity to support operational enhancements Overall, Netflix maintains a corporate culture that helps keep its organization flexible, innovative, and responsive to market demand and consumer preferences Section II: International business strategy of Netflix Inc 2.1 Analysis of Netflix value chain model Porter's value chain model is based on five primaries and four secondary activities Primary activities aim to create profit and value in the business that exceeds the cost incurred on developing products or services 2.1.1 Five primary activities in Netflix's value chain analysis • Inbound Logistics A company’s inbound logistics defines the process of how it sources its operations For Netflix, the inbound logistics come in the form of partnerships with various production houses The company partners with production houses such as Warner Bros to get the latest content on its platform By having a strong partnership with them, Netflix can achieve a competitive advantage.The digital content companies provide their media to Netflix at optimum costs, so Netflix gains and increases its profits On top of that, Netflix has an in-house production, which produces movies and TV series The company uses this in-house production to develop original content in multiple languages Any content made through its own production is cheaper and doesn’t come with copyright restrictions Therefore, Netflix also creates a competitive advantage through that • Operations Operations are the processes or services that transform inbound logistics into outbound logistics The key terms here are efficiency and cost-effectiveness—Netflix stores all its content on its servers by using cloud architecture So the ease of access, quick search, stability, and security of the server are the primary concerns Netflix uses cloud architecture on its servers that store the content Users can connect to Netflix servers through multiple devices Similarly, it has other features on its network, including search and organize features that provide the best services to customers • Outbound Logistics Outbound logistics are the activities related to the distribution of products or services to the customers It is a broad term encompassing product delivery, storage, and distribution both internally and externally The Netflix value chain model includes wholesalers and retailers order fulfillment, distribution, scheduling, processing, and storage Netflix’s outbound logistics include its apps and website, where customers can view content The company has apps on both iOS and Android, which deliver the content to the customers The company also operates a DVD rental business In that case, the outbound logistics include services that come with delivering these DVDs to customers • Marketing and Sales Netflix marketing is an innovative, agile approach based on brand development through customer relationship management Constant analysis and optimization are the foundation of marketing the Netflix model In the last few years, Netflix has increased its marketing budget drastically In the year 2019, Netflix spent 2.65 billion USD on marketing endeavors alone It included promotions and advertisements to expand the customer base • Services Due to its business model, most of Netflix’s value starts after customers have paid for the platform Therefore, providing services and satisfying customers is a crucial part of the company’s value chain It includes customer services to help customers with their queries, such as account issues or payment issues The company also has a 24/7 customer care center where customers can resolve their issues 2.1.2 Four support activities in Netflix's value chain analysis • Infrastructure Firm infrastructure support activities consist of activities such as – planning, general management, quality management, legal services, along with finance and accounting Firm infrastructure activities in Netflix value chain analysis are managed through diversification and distributed management Since there are no brick-and-mortar stores, the business model is somewhat different from the typical businesses The transactions are online, and the products are digital, so data security and management are critical The finance and planning at Netflix are managed at the corporate level The quality management, accounting, and legal issues are looked after at the business unit level • Human Resource Management Netflix human resource management is based on employee participation and rewards Netflix is very supportive of its employees and includes them in all decision-making The reward programs for employees are also an excellent incentive for them Employees must involve themselves in innovation and provide superior customer service for the company to grow Effective HR management has gained an edge over Netflix • Technology Development Netflix is committed to giving its customers the most advanced and the best user experience for a reliable online video rental service Netflix's complete business model is based on advanced technology It uses cloud infrastructure to perform all its operations Similarly, the company invests a lot in research and development aimed at creating value for the business This is the basis of a company's competitive advantage • Procurement Procurement in Netflix value chain analysis involves obtaining copyright licenses for the digital content it sells Netflix makes sure that it has access to original and in-demand content An example of competitive advantage by procurement is the Friends TV series It paid around a hundred dollars to acquire the copyrights for this popular series Netflix also creates original content creation This way, Netflix attracts more value and more customers 2.2 Netflix’s International Strategy and its result 2.2.1 The application of International Strategy With a development history of more than 20 years, Netflix nowadays leads the video streaming world To have such a strong position, Netflix had to establish and take the international strategy as the foundation strategy to penetrate deeper into the international market with low cost-reduction pressures and low local-responsive pressures • Low cost-reduction pressures In the streaming market, Netflix is a big player with core competencies In competition with Amazon, Hulu, HBOGo, Disney Plus, Netflix decided to hike the price of its combined streaming and DVD rental memberships by a stunning 60% Netflix didn't have to fight on pricing since its competitive advantage had been created and promoted for a long time, strengthening its position as an industry leader Netflix's use figures are greater than they were last year, despite increasing competition and costs In competitive global markets, international businesses often face pressure for cost reduction Many enterprises have pursued an international strategy, taking their products first produced for their domestic market and selling them internationally The distinguishing feature of many such firms is that they sell a product that serves universal needs, but they not face significant competitors Netflix Inc.’s generic strategy is cost leadership, which in Michael E Porter’s model ensures competitive advantage through minimized costs and, frequently, minimized selling prices This generic strategy enables the online entertainment company’s business model’s competitiveness based on low costs and the corresponding ability to sell at affordable prices, without necessarily being a best-cost provider In this generic strategy, Netflix broadly acquires more customers in the online entertainment market, in contrast to focus strategies that concentrate on specific market segments For example, the media streaming company uses its competitive advantages to reach more customers in the international market This broad approach of the generic strategy aligns with Netflix’s intensive growth strategies, which prioritize market penetration It doesn't matter how much you charge as long as you give a positive consumer experience Many customers were unhappy when Netflix hiked its pricing by 60%, and many analysts worried if the company was doomed However, just one out of every twenty-five clients (4%) decided to discontinue their memberships Despite the public outrage, this indicates that most buyers are not solely motivated by price The majority of Netflix consumers appreciate the service and are prepared to pay for it in the future 10 • Low local - responsive pressures Pressure for local responsiveness of Netflix firstly arises from the difference in consumer tastes and preferences depending on their age, gender, culture, region… However, Netflix is ready to serve all of them by its rich content library Second is the host government demands Although facing a diverse set of national regulatory restrictions, such as those that limit what content can be made available in local markets, Netflix is still available for streaming in over 190 countries Netflix also obtained copyright licenses for the digital content it sells Netflix makes sure that it has access to original and in-demand content to overcome government regulations Third is identical distribution channels: In America, Netflix was launched in the late 1990s in California and gained popularity by mailing its signature red-enveloped rental DVDs to customers This underscored a shift towards at-home, commercial-free viewing of films, while undermining the business models of bricks-and-mortar home-rental giants such as Blockbuster Netflix later made a move into online film streaming, creating a space where viewers could watch movies and television programs – allowing them to basically borrow filmed content for a monthly fee, rather than buying it and housing it on their own equipment Netflix uses cloud architecture on its servers that store the content Users can connect to Netflix servers through multiple devices Similarly, it has other features on its network, including search and organize features that provide the best services to customers Netflix’s channels also include its apps and website, where customers can view content 2.2.2 Implementation of Netflix’s International Strategy • Centralizing product development in the Headquarter Netflix Inc features a U-form or unitary organizational structure, which includes a hierarchy for executive leadership and direction across the company However, as compared to many organizations that have a hierarchical organizational structure, this company's structure is comparatively flat In Netflix's organizational structure, for 11 example, all of the top business executives report directly to the CEO The number of management layers required to escalate difficulties from the online company's bottom line to its organizational headquarters is reduced as a result of this organizational structure design Netflix Inc has a hierarchical organizational structure with adaptations to accommodate for company flexibility and response to global market developments The firm may continue to evolve by offering original entertainment content and on-demand media streaming services that appeal to target customers all over the world thanks to this corporate structure Functional Groups are based on business functions such as human resource management, which is referred to as "Talent" in Netflix's corporate structure These categories form the foundation of the internet company's structural framework Strategic objectives from Netflix's CEO, for example, are communicated downward via vertical lines of authority and communication Despite this hierarchical structure, the company's organizational structure is generally flat due to the low levels of middle management, allowing the corporation to adjust quickly to changes in the entertainment sector Despite the unitary and hierarchical character of the company organization, Netflix Inc has a corporate culture that encourages open communication and cooperation The strategic management choices for the whole organization's streaming activities are made by top executives at the corporate headquarters Netflix's organizational structure contains the following key functional groups or offices, as shown in its organizational chart: 12 Figure Netflix Inc's Organizational Structure • Establish manufacturing and marketing functions in each major country or geographic region in which they business Netflix has created a decentralized organizational structure in which they have an opendiscussion about strategy and results The decision-making process is also carried out through joint adjustments However, for distributing its products and services, Netflix still relies on a centralized system where content creators have to go through several regulations, checks and agree to Netflix's privacy Netflix has complete control over the production and distribution of its content (Virk, 2018) Thanks to its corporate structure, the company is able to continually evolve to offer original entertainment content and ondemand media streaming services that attract target customers around the world Geographical divisions in Netflix’s organizational structure enable strategic management specific to regional market characteristics The online entertainment company addresses strategic challenges in marketing through the support of its corporate structure For 13 example, Netflix develops its advertising campaigns with this organizational structural aspect in mind These geographic segments reflect the multinational market trends that are most significant to the company’s strategic plan for growing its member base, in terms of aligning marketing strategies to target customers’ entertainment preferences • Limited local customization of product Markets with similar culture Netflix sells products that serve universal needs and undertakes some local customization of products, which tends to be limited in scope Despite its very rapid internationalization, Netflix implemented in all markets the same customer-centric model of operations that had been key to its success in the United States Instead of choosing a comprehensive development orientation at the same time, the company has meticulously selected markets in terms of geography and tastes to avoid cultural conflicts For example, the first country Netflix set foot in in 2010 was Canada, which is both geographically close and has many similarities with the US As a result, Netflix decided to launch its globalization campaign in a place where there weren't too many challenges At this stage, the company wants to learn its expansion strategy and strengthen its core capabilities before moving beyond its home market With that in mind, the first stage in Netflix's globalization fits with the traditional expansion model, but thanks to accumulated experience, the company has developed a diverse set of markets within just a few years Consider Transcreation The original Netflix model was to solely sell pre-existing shows and movies, but developing original material propelled them to the next level of localization Netflix was able to captivate global audiences and ease entrance into new areas by creating unique content that really reflected the local culture In fact, the top popular titles on Netflix in India, Korea, Japan, Turkey, Thailand, Sweden, and the United Kingdom in 2019 were all local originals Netflix is now creating original content in 17 different regions, with foreign-language titles accounting for 45 percent of the overall library in the United States 14 Some shows, such as Lupin (France), Money Heist (Spain), and Sacred Games (India), became famous not just in their home countries, but also on Netflix platforms worldwide Thanks to this strategy, the amount of Netflix subscribers in international locales increased by 98 million between 2019 and 2020, representing a 33% year-over-year growth Add subtitles and dubs Although translation is only one part of localization, it is one of the most important Netflix always offers subtitles and dubs, but it also ensures that other components of the service, such as the interface and customer service, are in the target language Netflix's membership base has grown by over 50% in two years as a result of this flawless translation In addition, when it comes to subtitles and dubs, Netflix considers user preferences Netflix, for example, is prioritizing dubbed material for nations like Japan, France, and Germany, as these viewers are known to favor dubbing over subtitles Netflix conducts A/B testing and experiments to retain authenticity in tone and language in order to obtain the best localization outcomes Netflix created the Hermes Portal and employed translators to oversee the subtitles inhouse in order to obtain high-quality subtitles for all languages However, because Netflix is more focused on technology and media than translation and localization, the initiative proved to be time-consuming and was finally abandoned Even with a corporation like Netflix, this workload was too much As a result, they increasingly rely on specialized third-party services to manage these responsibilities while they concentrate on their primary business Pay attention to the design Localization isn’t just about words, it also takes into account aspects like layout and design Text expansion was a concern for Netflix while translating its interface and content since the same message might take up various amounts of space in different languages, causing unforeseen design challenges – notably in German, Hebrew, Polish, Finnish, and Portuguese To remedy this, Netflix devised a technique known as "pseudo localization," 15 which allows designers to see how the text would seem once it has been translated Designers can assess how much space the additional target language content will take up and evaluate the design for translation-related expansion before any issues arise About visual elements like movie thumbnails, Netflix is using personalized images to promote the same movie or series to different users based on their viewing habits The business describes this method in a blog post by using the movie "Good Will Hunting" as an example If a user is primarily interested in romantic films, they will be offered a thumbnail image of the main character and his love interest However, if a user is primarily interested in comedy films, they will be given a thumbnail of a role performed by Robin Williams, a well-known comedian Partner with a local company Netflix has partnered with key local companies to build mutually beneficial relationships In some countries, they decided to join hands with mobile and cable providers to provide integrated content with existing mainstream services For example, when Vodafone launched its TV service in Ireland, they added a dedicated Netflix button on the remote Netflix also announced new deals with Telefonica in Spain, Latin America, and KDDI in Japan According to Ted Sarandos, Netflix's Chief Content Officer, the company is currently responding to customers' interest in local content by producing original content in 17 different markets Section III Challenges of Netflix's International Strategy Netflix's implementation of its expansion strategy was not without issues The company was subject to both U.S and host country regulations, and it needed to adapt its content offerings to serve the local customers' needs In spite of its high brand recognition in the United States, Netflix faced severe competition from local pay television operators and VOD (Video On Demand) service providers in many countries Due to these factors, Netflix was expecting to have to make a substantial investment to implement its ambitious international expansion plan 16 3.1 Regulatory Restrictions As an American company, Netflix was still subject to regulatory restrictions imposed by the U.S government The impact of these restrictions was apparent in its January 2016 expansion announcement, with countries like Syria absent from its line-up More concerning for the future of its expansion strategy, however, were the regulatory restrictions imposed by the governments of the countries that Netflix chose for expansion For example, Indonesia's censorship agency claimed that much of Netflix's content was unsuitable for local audiences Vietnamese regulators were also cautious on similar grounds, and Malaysia was likely to require that Netflix follow its censorship policy, largely due to religious reasons China, in spite of its highly attractive market with its enormous, broadband-capable population, was very difficult to operate in because of regulatory challenges More specifically, entering the Chinese market had proven challenging for Netflix due to strict regulations imposed on the country's media and entertainment industries China’s rigid foreign content restrictions set by the nation’s Radio and Television Administration, which saw it outlaw foreign TV shows in their entirety for prime time and place a 30% quota on streaming platforms for imported content, has seen some media companies hesitate to strike business in the territory Netflix chief Ted Sarandos said that the streamer is unlikely to look to expand business in China, during the UBS 46th Annual Global Media and Communications Conference 3.2 Competition in the Global Markets The industry was traditionally dominated by a small number of firms, but a diverse range of companies had been looking to expand into the Internet video streaming business Although Netflix retained a significant portion of market share in the industry, an increasing number of new entrants had changed the competitive landscape with unique competitive advantages 17 Netflix faced severe competition from incumbent pay television operators and established subscription VOD service providers in local markets In some countries, Netflix managed the local competition successfully For example, in September 2010, Netflix launched in Canada and recorded a higher percentage of penetration than it had recorded in the United States (about 45 per cent) Two major domestic service providers already existed in Canada Shomi was co-owned by Shaw Communications and Rogers Communications, and CraveTV was owned by BCE Bell Canada However, both of these services had a much lower market share than Netflix Netflix was unable to repeat such success in many other countries For example, India already had four major service providers (Eros Now, Ditto TV, Spuul, and Hotstar) that had substantial customer bases and content Eros Now had 30 million registered users and rights to over 3,000 Bollywood movies Ditto TV, owned by Zee Entertainment Enterprises, launched in February 2012 with over 20 million customers Netflix also faced the problem of relatively underdeveloped infrastructure Network quality was generally poor, and 4G wireless technology was only starting to gain momentum In some countries, Netflix was also facing competitors from both home and host countries Netflix entered the Japanese market in September 2015, where Rakuten Showtime, one of the strongest local competitors, had over 100,000 movies, dramas, animations, and sports programs In addition to the local players, Netflix was competing with Hulu Japan, which offered access to 13,000 movies, TV dramas, and anime shows Global competitors for Netflix in this industry came in the form of multinational information technology companies that expanded their business interests into the Internet video-streaming sector An example of such a company was e-commerce giant Amazon, which took advantage of its enormous global customer base, strong brand, and powerful computing infrastructure to launch its Amazon Video service Launched in 2006, Amazon Video was available in a number of countries, including the United States, the United Kingdom, and Japan, and had an estimated 150 million subscribers in 200 territories, it is Netflix’s main competitor worldwide The platform, which offers unlimited access to 18 thousands of movies and online series to watch from any connected device, is available to all Amazon Prime users, the membership program that allows them to access the free shipping of any product they purchase The service allows users to rent or buy movies and television series, as well as access more than 100 premium channels and the possibility of incorporating more paying a fee Its catalog consists of content that is negotiated with video and music providers, as well as original content from Prime Originals Disney Plus is also a new entrant to this streaming industry, though only has years operation but until now it has become top rank of the global VOD area scale Disney Plus was the top-trending Google search keyword in the United States in 2019, indicating that there was a lot of excitement for the debut Within 24 hours, the much-anticipated new platform had surpassed 10 million users The material on Disney Plus is its greatest asset When it first launched, the site had a significantly smaller content inventory than competitors such as Netflix and Amazon Disney's strengths, however, are regarded to be quality above quantity, with Pixar, Lucasfilm, and Marvel all generating material for the service Along with Netflix and Amazon Prime, Disney Plus appears to be the third pillar for many customers It looks to be scaling well ahead of other services that began at the same time, such as HBO Max and Peacock, with over 100 million members as of March 2021 3.3 Financial Cost The production of content assets by Netflix is an extremely costly affair When capital is required to secure the necessary licenses to distribute films and tv series, contracts are paid in full when the asset is utilized (made available for streaming to subscribers) Netflix’s shift to producing original content has put a financial strain on the company, in that original content requires fixed costs be incurred years ahead of it becoming a revenue stream during the creation and development phases In the first half of 2021, the company spent $8 Billion on content And it expects to spend a total of $12 Billion by the end of the year Obviously Netflix is very "paying" for content But costs are likely to escalate further in this content 19 war However, Netflix's profits are growing rapidly, so it can offset this relationship Take an example: Thanks to the release of Squid Game, shares of Netflix have risen nearly 7%, bringing the company to $278.1 Billion The big classic is also expecting Netflix to increase performance for next few months The following chart shows how assets, debt and subscribers are all rising together, particularly how the rise in new international subscriptions is highly correlated with the emission of long-term debt and somewhat justifies the acquisition of the new debt It seems obvious that Netflix’s strategy is to utilize debt to fund its growth in production volume as much as possible until its first obligations are due for full reimbursement in 2021 It is also possible that due to the small value of the first bond emissions (400M$), the company might keep issuing bonds of a higher face value in order to continue boosting whatever production levels it will have achieved in four years time The main advantage is that owned content assets are permanent assets in that the company is free to exploit them into the future, whereas short-term content obligations (licensed content) results in temporary assets that must be written off the balance sheet once the licensing contracts expire Thus Netflix is incurring large debt, but by the same token acquiring permanent assets and growing and expanding into new markets at a very rapid pace Figure Financial data versus International Subscriber of Netflix 20 CONCLUSION The television industry is expected to grow more and more in the future, and become popular among all ages, genders, statuses, ethnicities, countries Film is a form of cultural identity transmission, and each country or region has its own cultural characteristics Throughout history, film producers have tried to put meaningful messages and content into various films that are broadcast in many parts outside the country, globally even As technology develops, the way movies are produced and shown gradually become more convenient and creative, helping to bring the best experience to viewers With these in mind, Netflix, initially a DVD rental company in California in the United State, has researched and sought to penetrate foreign markets, then expand to the continent and finally the whole world, with the mindset of focusing on customer needs In the current technology era, the online movie watching service provided by Netflix is becoming more and more popular because of its convenience, variety and many benefits for consumers In this report, we have given readers an overview and in-depth look of Netflix's business, at the same time researched its value chain and international business strategy, and the challenges faced by the company when encountering in the process of accessing the multicultural international market We hope that the report will help readers somewhat better understand how a business in the field of streaming services like Netflix has reached out to the world and been as successful as it is today 21 REFERENCE Assignment Help Me 2021 A concise analysis of Netflix operations and strategies [online] Available at: [Accessed 15 December 2021] Slideshare.net 2021 Netflix International Business Strategy Plan [online] Available at: [Accessed 15 December 2021] Vietnambiz 2021 Bài học kinh doanh Netflix từ việc phủ sng 190 nưc vòng năm [online] Available at: [Accessed 15 December 2021] Công Ty Dịch Vụ Dịch Thuật 2021 Bí Mật Đằng Sau Sự Mở Rộng Quốc Tế Của NetFlix [online] Available at: [Accessed 15 December 2021] Rancord Society 2021 Netflix 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| EdrawMax Online [online] Available at: [Accessed 15 December 2021] 13 2021 [online] Available at: [Accessed 15 December 2021] 23 ... activities in Netflix'' s value chain analysis 2.2 Netflix? ??s International Strategy and its result 2.2.1 The application of International Strategy 2.2.2 Implementation of Netflix? ??s International. .. Section II: International business strategy of Netflix Inc 2.1 Analysis of Netflix value chain model 2.1.1 Five primary activities in Netflix'' s value chain analysis 2.1.2... customers 2.2 Netflix? ??s International Strategy and its result 2.2.1 The application of International Strategy With a development history of more than 20 years, Netflix nowadays leads the video streaming
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