SWOT Analysis of Netflix

Netflix’s Strengths:
1. Exponential Growth – Netflix has grown exponentially and an influential brand.
2. Brand Reputation – Netflix has been referred by everyone and has become common
in every household. It is also one of the top rated companied by Forbs
3. Global Customer Base – Netflix viewd in more than 187 countries around the globe.
There are over 179 million subscribers for Netflix.
4. Originality – Another of its benefits is that Netflix has created the best quality original
programming over the years. Any of its programmes, such as Tiger King, Money
Heist, Stranger Stuff, Mindhunter, Orange, and Narcos. Is the New Black, were so
successful that the number of subscribers continues to rise over the quarters.
5. Adaptability – Through offering streaming to all internet-connected platforms such as
personal computers, iPads, handheld devices, and televisions, Netflix quickly adapted
to different technology. Because of this, over the years, their organisation expanded
tremendously.
6. Customer Service – Customers have been waiting for an offline alternative to watch
Netflix content for a long time, in the event of travel or slow internet access. As a
result, Netflix has now launched a (offline) download option allowing clients to
stream the content of their choice
7. Affordable Pricing – Netflix's price policy gives it an upper hand over its rivals. The
plans produced by Netflix are inexpensive and provide great value. For an
inexpensive price of $8.99 a month, viewers can watch limitless videos, either on
DVD or streaming. It is less costly and therefore provides a larger range than
television movies or going to the theatre. Subscribers will also get premium plans at
$15.99 a month for better quality Ultra HD (4K+HDR) streaming.

Netflix’s Weaknesses:
1. Limited Copyrights – Most of the content is not owned by Netflix, and this adversely
affects the company.
2. Increasing Debt – In several nations across the globe, Netflix services its diversified
content, needing enormous sums of revenue. To finance new content, Netflix
continues contributing to its long-term debt. Netflix has reported $14.17 billion in
debt as of April 2020, with plans to collect additional $1 billion in a debt offering. A
big drawback is the growth in debt every year.
3. Lack of Green Initiatives – In order to encourage sustainable protection, Netflix is far
from using environmentally friendly energies for consumption and include that as a
part of its business model. In comparison, tech giants such as Amazon, Google,
Apple, and Facebook have also begun to use green technology to help protect the
 environment. The four tech companies have dedicated themselves to their enterprises
using 100 percent clean energies. The lack of use of renewable technology has a
detrimental influence on Netflix's brand name.
4. Rigid Pricing – With more options, consumers expect personalised pricing.
Unfortunately, with just three rates, General, Regular, and Luxury, Netflix's pricing
model is rigid. The absence of numerous alternatives has led to a slowdown in the
amount of new subscribers.
5. High-dependence on market in America – Even though Netflix functions
internationally, it depends heavily on the demand in North America. Netflix
announced $10.05 billion in sales from North America in the 2019 fiscal year,
reflecting about 50 percent of its overall revenue ($20.15 trillion). As the North
American market is approaching saturation, this is a significant weakness.
6. Support Shortages – In the first six months of 2020, the number of Netflix subscribers
and stolen accounts rose because people were trapped at home due to the pandemic.
Netflix shortened support hours to make matters worse. Users became irritated with
the lack of customer service and had to wait longer for hackers to recover their stolen
accounts.
7. Increasing Prices – Netflix has increased their subscription rates, while other online
video streaming providers have launched their providers at significantly cheaper
prices, such as Apple TV+ ($4.99 for 30 days) and Disney+ ($6.99 for 30 days).
8. Growing Operational Costs – Adding more content offers a strategic edge to Netflix,
but the expense of maintaining the content continues to increase. The cost of steaming
was $14.61 billion in 2019 and the figure exceeded $12.04 billion from last year's
investment.

Netflix’s Opportunities:
1. Affordable Option in Mobile Streaming - Netflix should deliver a lower-priced
alternative in the foreign market to attract and retain viewers. In India, Netflix has
been exploring a cheaper mobile-only service that only costs $3 per month. In order to
compete more efficiently against cheaper rivals such as Apple+, Disney+, and so on,
it should extend this lower-priced option internationally.
2. Exploit Ad-Based Model - Facebook, Amazon, Google, and several other suppliers of
services create billions of advertisement revenue. By embracing an advertising-based
business model, Netflix will raise its sales.
3. Expand Global Customer Base - Netflix will have its footprint in many other
countries to grow its offerings to customers with such a large current user base. They
should start hitting countries that are not explored by them yet. Netflix has recently
extended its efforts and added a couple more countries to its catalogue of operations.
4. Refresh Content library – By-the contracts with different movie producers, it will
broaden the content licencing. Additionally, since it is now making its original
material, Netflix could update its material collection.
5. Alliances – It may also work with various telecommunications networks and sell
package deals in various countries. For Netflix, alliances and alliances will prove
 valuable. Netflix has collaborated in the past with Channel 4. More strong
relationships with local broadcasters can be created.
6. Niche Marketing – Another big opportunity for Netflix is also to create region-
specific material in their local languages. For Netflix, niche targeting has proved
advantageous. For starters, in India, it launched the Spanish series' La Casa de Papel'
(Money Heist) and an original TV series' Holy Games ' which are mega hits.

Netflix’s Threats
1. Competitive Pressure – There is enormous amount of competition for Netflix,
worldwide. Its rival keeps rising every year. By offering its users repeated access to
new and original content, Disney+, Apple TV+, HBO, Amazon, Hulu, and YouTube
are constantly competing with Netflix.
2. Government Regulations – In several nations, stringent government laws and
regulations about content providers such as Netflix can pose a significant threat to
them. For starters, due to its limitations on international content, Netflix's extension to
China would be impossible.
3. Piracy – Millions around the world explore modes to download media content due to
high monthly prices that they cannot bear, internet piracy is also at its height. Another
huge challenge is that Netflix is facing.
4. Market Saturation – In Q4 of 2019, Netflix gained 420,000 U.S. viewers, smaller than
its 600,000 targets. Its goal in Canada was 218,000, but only 125,000 subscribers
were added. North American subscriber growth has declined for 3 straight quarters
since the demand is approaching saturation. Owing to market penetration, Netflix will
find it difficult to add more customers in the future.
5. Account Hacking – In first two quarters of 2020, with the growth of regular users due
to lockout, the number of compromised Netflix user accounts increased dramatically.
If account theft continues in the future, disgruntled Netflix customers will be able to
switch massively to competing businesses.
 PESTEL Analysis of Netflix

Netflix is the most popular Online Streaming service provider whose content is viewed all
over the world. As of April 2020, Netflix has about 170 million active subscribers from all
parts of the world. In the present times, with increase in use of 4G enabled smartphones,
Netflix has seen a steep increase in its growth. The reason for Netflix to gain this amount
popularity cannot be just one but many. Mainly, the customer satisfaction and their rich
experience, push for promoting its original content and their well thought marketing
strategies are major reasons. In the current pandemic circumstances, where people are
spending maximum time with their families at the comfort of their homes, there has been a
surge in the demand for online streaming services. Unlike other service providers, Netflix is
operationalized as only one segment. With increase in use of fast internet and mobile digital
devices, Netflix will see itself growing in revenue, profits and popularity.

Below is the pestle analysis that will help us analyse how different forces affect the business
of Netflix worldwide.

Political:
Political influence and force were always seen increasing while the tech companies tried to
stay relevant in the world. Although Netflix is an online streaming company we cannot deny
the fact that it is a tech company too and hence it is subjected to all types of government
scrutinises. Since the time the cases related to customer data collection has come up, the
government has tightened its governance polices to keep a close eye on use of this precious
data. In accordance to the regulation level required in each market, Netflix has modified its
content and model in different geographies. Since these companies are making billions in
revenue each year, government of regions rely upon the huge tax which the companies are
expected to pay to the government.

Economic:
The influence of economic factors is most evident in international businesses. In an
environment where there is a high degree of employment and heavy economic activities,
people tend to spend generously on entertainment leisure activities. Since in last 7 years,
world has seen impressive economic progress and this has resulted in people spending their
leisure time using services like Netflix. However, this claim can be refuted considering the
current pandemic situation where in the economies of the world are shrinking yet there is a
significant rise in the revenues of Netflix. Economic growth is expected to start increasing
again until stay at home laws are eased in the United States and other parts of the world. For
extended times, low economic activity will have a detrimental impact on Netflix's company
as customers would want to save more if the lockdown continues.
Sociocultural:
In the sense of international industry, socio-cultural influences often play an increasingly
important role and, given their significance, companies make them part of their organisational
and marketing strategies. Netflix caters to a worldwide audience and, as such, it is necessary
for the organisation to pay attention to the diverse tastes and desires of individuals from
different cultures and communities. This is why material that covers many genres and
languages has been introduced to Netflix. It offers a wide range of content suitable for
audiences of different ages and from various regions. However, because people can find a
nice collection of movies and shows on Netflix in their native languages, this has helped the
company attract a diverse set of clients from around the world. In recent years, the
demographic makeup of the world population has changed a lot. The millennials are Netflix's
prime focus and the brand has targeted its offerings primarily to the modern generation's
palate. This generation is extremely tech-savvy, consuming most of its online entertainment.

Technology:
A lot of growth and competitiveness in the company sector has been driven by technical
variables. Technology is at the heart of the business model, as in the case of Netflix. There is
a lot of technology-related things going on all the time inside those Netflix offices. Its
emphasis on customer service is one of the most significant factors behind the exponential
growth in its success over the past few years. The firm has continued to enhance its user
interface to provide the best-in - class experience for subscribers. The company has continued
to enhance its user interface to provide the best-in - class experience for subscribers.
Technology is Netflix 's primary source of strategic advantage. In order to recommend
programmes and movies worth viewing to individual customers, the company uses multiple
algorithms and machine learning. This is how the streaming brand has built for its users an
exclusive and delightful experience. This is how their subscribers have created an exclusive
and unique experience for the streaming brand. Technology, however, is not just a source of
competitive advantage, but it also drives greater industry competition. Netflix is competing
with several companies, such as gaming, social media and other online streaming services. It
is necessary for Netflix to constantly upgrade its technologies and overall offerings to address
the competitive pressure because of the intense competition in the industry. In order to drive
greater customer experience and improve its reputation, the organisation spends a substantial
amount per year in research and development.

Environmental:
For any big organisation, its environmental influence is an important factor. Companies see
how and what is its impact or influence on the world as it affects its brand value and
credibility in the society. Like Netflix, each major brand invests in the environment. Since
Netflix is a business whose whole organisation is run online, those corporations do not have a
clear and serious environmental effect. Despite this, without consuming money, all business
processes relevant to a broad and multinational business cannot be run. This is why Netflix
aspires to consider and mitigate the environmental effects as far as possible. Although its raw
material dependency on the atmosphere is very poor, the brand also uses energy heavily in its
activities. The organisation used nearly 94,000 megawatt hours of electricity directly in 2019.
A portion of the electricity used by the company in its corporate activities, including its
headquarters and studios, as well as the telephone facilities that are part of its content
distribution network, comes from non-renewable sources, so the company pairs the portion
with area renewable energy certificates in order to reduce its environmental effects.
Furthermore, the agency still aims to be as economical as possible in its office activities.
Reduced paper consumption as well as contributing surplus food to the poor are the
environmental activities it has embraced through its departments.

Legal:
In the context of the technology and digital content sector, regulatory considerations will
continue to play a significant role as regulation in this field continues to change and
regulators around the world are focusing on creating a clear legal system to oversee the
technology industry. A huge number of tech giants in the world have faced a large number of
lawsuits against them relating to anticompetitive conduct and consumer privacy, including
industry pioneers such as Apple, Google, Amazon and Facebook. Since Netflix uses user
information to suggest the content as per the algorithms, data security and user privacy
become significant issues.