Netflix Case Study Introduction

Netflix in the past few years has become one of the largest companies to provide online streaming on demand all over the world. Although it is the most well known and successful company, it faces a lot of stiff competition from various other companies like Hulu, Amazon, Prime etc. To maintain its position worldwide, analysis of the internal and external business environment is necessary. SWOT and PESTLE help companies like Netflix to scan and understand its internal and external threats and find areas of improvement. The following study focuses on SWOT and PESTLE analysis of Netflix, a US based company. The study sheds light on the internal and external factors of Netflix in relation to SWOT and PESTLE.

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Netflix SWOT Analysis (Table)

Netflix Analysis

Strengths

Netflix has huge number of subscribers, adding up to 1.39 million, worldwide in 2018 (edition.cnn.com, 2019). It serves all the subscribers sufficiently through a large no. of series and movies available. As per the case study of Netflix, it has a 56 page long index of its contents (Media.netflix.com, 2019). One of the main reasons of Netflix success is its ability to provide shows and movies on demand on different devices. Hence, a person does not have to wait for a TV release of a movie or necessarily carry his/her laptop.

Weakness

As per the case study of Netflix, it has been increasingly falling into debt due to its high production cost. In 2018 Netflix reported about 8.4 billion dollars in long term debt (Variety.com, 2018). Also as watching various contents in Netflix require a fast internet speed which is not available to many, Netflix has been unable to reach everyone. As per the case study of Netflix, not all of its contents have the facility of downloading. This forces the users to use the internet each time they something.

Opportunities

As per the case study of Netflix, it is available for online screening in over 190 countries. Providing service in so many countries, Netflix is not available in the country with the largest population in the world, China (Help.netflix.com, 2019). Being available in this country will greatly help it financial problems. Other countries Netflix is not available in are Crimea, North Korea and Syria. Collaboration with various media houses will help Netflix to have more regional content catering to a huge sum of people.

Threats

One of the biggest threats that Netflix is facing is a huge loss of finances on making original content. This has pulled the company into millions of dollars of debt. The company also faces stiff competition from other entertainment companies like Hulu and Amazon Prime. To keep up with the competition the company continuously is trying to make new or buying content.

Netflix PESTLE Analysis

Analysis

Political

As per the case study of Netflix, due to political restrictions over American business companies, streaming of Netflix is restricted in countries like Crimea, North Korea and Syria (Nevin et al. 2017). Such restrictions have affected its revenue by not allowing sales in these countries.

Economic

Economy of a country plays a huge role in the economic development of Netflix. Countries with weak currency have affected the company negatively. The company has to provide services in such countries at low rates. High subscription price is a serious issue in the company’s economic loss. As per the case study of Netflix, the company’s main challenge is to provide services at costs lower than cable TV (Ma and Ahn, 2019).