INFORMATION ABOUT MNC

Subject -: International Business

Submitted to -: Dr. Purvi Pujari
 Submitted by -:

1. Ajay Pillai - 2020M0160

2. Anith Pillai - 2020M069
3.Vaishnavi Paradkar - 2020M059
4. Suprit Chavan - 2020M011
5. Pallavi Patil - 2020M156
6. Amit Jadhav - 2020M032
7. Akshata Chalke - 2020M101
8. Akash Bhande-2020M004
9. Gupta Rachana Shivshankar-
2020M0119
10. Rani Kumari - 2020M0132
 1. INTODUCTION

Netflix, Inc. is an American subscription streaming service and production

company. Launched on August 29, 1997, it offers a library of films and television
series through distribution deals as well as its own productions, known as Netflix
Originals.

As of October 2021, Netflix has over 214 million subscribers worldwide, including
74 million in the United States and Canada, 70 million in Europe, the Middle East
and Africa, 39 million in Latin America and 30 million in Asia-Pacific. It is available
worldwide except in Mainland China (due to local restrictions), Syria, North Korea
and Crimea (due to US sanctions). Netflix has played a prominent role in
independent film distribution, and is a member of the Motion Picture Association
(MPA).

The company is ranked 164th on the Fortune 500 and 284th on the Forbes Global
2000. It is the largest entertainment/media company by market capitalization. In
2021, Netflix was ranked as the eighth-most trusted brand globally by Morning
Consult. During the 2010s, Netflix was the top-performing stock in the S&P
500stock market index, with a total return of 3,693%.

Netflix was first launched as the world's first online DVD-rental store, with only 30
employees and 925 titles available—almost the entire catalogue of DVDs at the
time. Initially, Netflix offered a per-rental model for each DVD, but introduced a
monthly subscription concept in September 1999. In January 2007, the company
launched a streaming media service, introducing video on demand via the
Internet.

During Covid Netflix has announced it added more than 15.7 million subscribers in
the first three months of 2020 Netflix also said it generated revenue of $5.77
billion for the first quarter. Profits rose to $709.1m from $344.1m from 2019.
 2. PESTEL ANALYSIS -:
Political Factors that Impact Netflix in India:

- Role of Non-Government Organization, Civil Society & Protest Groups – The country has a
vibrant civil society community and Netflix India should build bridges with them and seek out
areas of co-operations. Civil society groups are influential not only in policy making but also in
building a society wide narrative.

- Unrest within the Country & Chances of Civil Unrest – We don’t think that Netflix India
business operations are facing any dangers from any kind of civil unrest or internal militant
operations in the country.

- Democracy & Other Democratic Institutions –the democratic institutions are needed to be
strengthened further so that business such as Netflix India can thrive in an open, transparent and
stable political environment. Strengthening of democratic institution will foster greater
transparency and reduce the level of corruption in the country.

Economic Factors that Impact Netflix in India:

- Consumer Disposable Income – The household income of our country has increased constantly
in the last decade and half, compare to the USA market where household income is still below
2007 levels and not increased in real terms since early 1980’s. Netflix India can leverage this
trend to expand the market beyond its traditional customers by employing a differentiated
marketing campaign.

- Foreign Exchange Rate – Number of companies have incurred losses in past few years because
of forex risk in – Venezuela, Brazil, and Argentina. Netflix India should be careful about the
history of forex risk before entering new market. Many US companies have incurred losses in
Mexico in regular forex crisis in that country.

- Government Spending – As mentioned in the political factors, in case government of the

country is running deficit budgets, the implication for Netflix India is that it can boost sales of its
product in short run but also expose Netflix India to medium term forex and currency
depreciation risks.

- Demand Shifts from Goods Economy to Service Economy – The share of services in the
economy is constantly increasing compare to the share of manufacturing, goods, and agriculture
sector.
Social Factors that Impact- Netflix in India:
- Attitude towards Authority – Various cultures in different part of the world have different
attitude towards authority. In Asia authority is respected while in west it is something to rebel
against. Netflix India should carefully analyse the attitude towards authority before launching a
marketing campaign for its products and services.

- Power Structure in Society – Netflix India should carefully analyse both - What is the power
structure in the society? How it impacts the demand in the economy. For example,As compared
to the power structure in US economy, it is slowly moving towards the older generation as that
generation has higher disposable income compare to the younger generation.

- Education Level in Society – Education level of the society impacts both the quality of jobs and
level of income. High level of education often results in better jobs, higher income and higher
spending on complex and aspirational products.

- Attitude towards Leisure – Netflix India should conduct ethnographic research to understand
both attitude towards leisure activities and choice of leisure activities. Experience economy is
one of the fastest growing segments both among millennials and among baby-boomers.

- Demographic Trend – The demographic trend is one of the key factors in demand forecasting
of an economy. For example, as the population of USA and EU is growing old the demand for
products mostly catering to this segment will grow. Netflix India should consider demographic
trends before new product developments and integrate features that cater to this segment. As
population is ageing it will require less tech intensive products.

Technological Factors that Impact Netflix in India:

- Research and Development Investment Levels – If there is high level of investment in
technology development sector then there are high chances of building a self-sustaining
ecosystem that drives innovation. Netflix India can leverage such a situation to hire the best
people in business.

- Integration of Technology into Society & Business Processes – Uber failed in China because it
tried to enter before smartphone were widespread in China. Netflix India should build a strategy
that can integrate societal values, infrastructure, and Netflix business model.

- Preparedness for 5G Related Infrastructure – Countries across the world are trying to prepare
themselves to install 5G infrastructure. Netflix India should assess to what level the local market
is prepared to roll out the 5G connectivity.

- Acceptance of Mobile Payments and Fintech Services –Netflix India should assess what are
preferred choices of mobile payments in local economy and chose the business model based on
it.
- Likelihood of Technology Disruption – If the country is hub of technology companies, then
there is a high chance of technology disruption among various industries. Netflix has to assess
whether it can live with the fast pace of technology disruption in its industry.

Environmental Factors that Impact Netflix in India:

- Influence and Effectiveness of Environmental Agencies – The role of environment standards
enforcement agencies is critical in safeguarding norms. But often in emerging countries these
agencies delay the process as a tactic to extract bribes. Netflix India should be aware of presence
of such practices in a country.

- Level of Consumer Activism Regarding Environmental Concerns – Netflix India needs to

know the level of consumer activism regarding environmental concerns is. It will help Netflixin
both developing environmentally friendly products and thwarting PR stumble blocks.

- Environmental Standards and Regulations both at National & Local Levels – Often the
environment policy at national and local level can be different. This can help Netflix India in
numerous decisions such as Product development, and pricing strategy.

- Focus & Spending on Renewable Technologies – How much of the budget is spend on
renewable energy sources and how Netflix India can make this investment as part of its
competitive strategy.

Legal Factors that Impact Netflix in India:

- Consumer Protection Laws – Netflix India needs to know what are the consumer laws, what is
the rate of enforcement, what is the attitude of authorities towards consumer protection laws, and
what is the role activist groups in enforcement of consumer protection laws.

- Data Protection Laws – Netflix India needs to assess what are the data laws in the country and
what it needs to do to comply with them. For example most of EU countries now want the EU
citizen data to be saved in EU countries only.

- Employment Laws – What are the employment laws in the country and are they consistent with
the business model of Netflix India. For example, Uber employment system is not consistent
with French laws and it is facing challenges in the country.

- Business Laws – Before entering into new market – Netflix India has to assess what are the
business laws and how they are different from home market.

- Laws regarding Monopoly and Restrictive Trade Practices – As a new player Netflix India
shouldn’t be worried about the monopoly and restrictive trade practices law.

- Securities Law – What are the securities law in the country and what are the conditions to list
the company on national or regional stock exchange.
 3. EPRG model-:

EPRG Framework focuses on the international marketing of the company and

the different attitudes for the international marketing processes and
environment.
There are 4 stages of EPRG Framework which are –

• Ethnocentric Approach

• Polycentric Approach

• Regiocentric Approach

• Geocentric Approach
ETHNOCENTRIC
Netflix is not yet available in China, Crimea, North Korea, or Syria, and does
not modify its offerings to the needs and wants of other nations where it
operates.
POLYCENTRIC
Every country's market is equally important. Domestic, believe in the
individuality of each market. They are consistent throughout all nations where
they are provided.

Netflix has adopted Polycentric Approach. By adapting the Polycentric

Approach they were able to develop their product in local languages of the
countries since some of the countries have instable political and social factors
for example: - India where the government is changed in every 5 years.

REGIOCENTRIC
Regions share economic, cultural, and political commonalities. The
fundamental concept is to appeal to "global consumers with comparable
preferences."
GEOCENTRIC

To take the finest from every country

2) Glocalization is a combination of the words "globalization" and

"localization." The term is used to describe a product or service that is
developed and distributed globally but is also adjusted to accommodate the
user or consumer in a local market.

Yes, Netflix has followed glocalisation for his business activities.It had gained
expertise in the content people prefer, the marketing they respond to, and how the
company needed to organize itself. Now Netflix focused on adding more
languages (including for subtitles), optimizing its personalization algorithms for
a global library of content, and expanding its support for a range of device,
operation, and payment partnerships. Six months after entering Poland and
Turkey in 2016, for example, Netflix added the local languages to its user
interface, subtitles, and dubbing.As with the markets it had entered earlier, the
company launched a service targeted at early adopters, and then iterated quickly
to add features to attract a wider audience.
3) Strong competition in streaming already exists in many countries. In France
and India, for example, homegrown leaders offer local-language video content,
thus depriving Netflix of first-mover advantage. In some countries, like
Germany and India, rivals such as Amazon Prime were already established. Yet
the majority of Prime subscribers are in the U.S., and Netflix has managed to
make inroads into even those markets where Prime arrived first. Now Netflix,
with its global reach, has more subscribers worldwide than all other pure
streaming services combined. Netflix has demonstrated that this strategy is
now a viable option. But it requires a mastery of local contexts, including the
ability to acquire local knowledge and to demonstrate sensitivity and
responsiveness. With the increasing prevalence of winner-take-all markets,
companies operating in such markets will need to pursue an
internationalization strategy similar to Netflix’s. And when it comes to Netflix’s
next stage of growth, and how it will respond to new challengers, the sequel
appears likely to be as captivating as the original.
 4.Porter’s Diamond model-:

Natural resources

These are the natural resources available to Netflix A Business Model Innovation in its home
country, as well as in the countries where it has set up operational and production plants. These
include, for example, the presence of natural resources such as water channels. These natural
resources are available to a firm because of its location and are relatively cheaper for the firm to
access. They do not need to be developed or created but refined for usage generally. 

Capital resources

These include the financial resources that are available to Netflix A Business Model Innovation.
For Netflix A Business Model Innovation, these are available through equity capital resources
and debt financial resources. Equity-based capital is largely generated within the company, using
internal resources and channels only. Debt-based capital, on the other hand, involves debt taking
from external sources and organizations.

Human resources

This includes the skill levels, and performance of the human resources at the Netflix A Business
Model Innovation. It also involves the training programs and all other investment programs
undertaken by Netflix A Business Model Innovation in relation to its human resources and
employees across the globe. It also includes all human resource functions from recruitment to
performance management which work towards employee development and growth.

Scientific knowledge

This involves the scientific and technical knowledge available to a firm and its knowledge base.
This may be acquired through countrywide resources, industry-wide resource, or resources
specific toe firm. Scientific knowledge is important for a firm in developing a competitive
advantage that helps it stand out from its competing players. 

Technological innovation 

The presence of scientific knowledge will also lead to frequent innovations – technologically s
well as otherwise. Technological innovations are important in helping firms achieve economies
of scale and reduce overhead costs and other operational costs to be able to expand into other
markets with profit maximizations. 

Infrastructure

The infrastructure is also an important factor condition for Netflix A Business Model Innovation
which has helped it grow and expand- not only locally but also globally. The infrastructure
includes the physical as well as the technological network that has allowed Netflix A Business
Model Innovation to successfully complete and carry out operations in other countries and
markets. 

This infrastructure is largely developed by the country itself based on internal resources.
However, in cases of firm need and market potential, firms such as Netflix A Business Model
Innovation have also engaged in developing the local infrastructure – which has not only helped
the firm in the development but has also led to the growth and development of the society and
market where it has expanded to. 

Government
his refers to how governments can influence firm performance and its growth plan through its
various policies as well as border relations with other countries one global front. For Netflix A
Business Model Innovation, government policies and structures across different countries have
been particularly favorable. 

Government policies

Government policies have supported Netflix A Business Model Innovation in its expansion and
growth plans and opportunities. Netflix A Business Model Innovation has received support from
its home country for expanding production capacities, and also from foreign governments in
setting up plants and gaining access to import and export quotas for different regions. Moreover,
the government trade policies between different countries have also benefited Netflix A Business
Model Innovation in expanding its business internation Industry regulations

The industry regulations for Netflix A Business Model Innovation have also been supportive of
the firm in maintaining and developing its competitive advantage towards sustainability. Industry
regulations for Netflix A Business Model Innovation also ensure the consistent maintenance of
quality in Netflix A Business Model Innovation products. Moreover, industry regulations have
also allowed Netflix A Business Model Innovation to develop efficiency in its products through
technological advancement, and the development of scientific and technological knowledge for
supporting business advancement. 
Government as a catalysts

The government has acted as a catalyst for Netflix A Business Model Innovation on a number of
occasions. By being a catalyst, the government has supported Netflix A Business Model
Innovation’s business operations and developmental plans. This has been done by providing the
company with infrastructural capacities and benefits for example. The government has also been
a catalyst in facilitating the business meet its demand, and with its various internal consume
related policies and regulations which have allowed Netflix A Business Model Innovation to
design marketing programs and develop products that meet the needs of consumers locally as
well as in other markets. 

Government as a challenger

The government has also been a challenger for Netflix A Business Model Innovation. This has
also helped the business in its growth strategy. The government has been a challenger especially
in its relation with other countries which in turn have had an impact on the business relations that
Netflix A Business Model Innovation has with foreign consumers and markets, as well as foreign
agents and distributors. However, these challenges that have sprouted from the governments and
its relations with other countries and regions, have helped Netflix A Business Model Innovation
develop contingency plans and have helped it develop strategies to be able to use strengths to
ward off potential threats and weaknesses successfully.  

Demand conditions
Demand conditions are those events and conditions that lead to the success of a firm in any given
market Local, and home demand is important in not only exposing a firm to the challenges of a
bigger market, but are also important I pushing the firm towards expansion, and possibilities of
expansion. 

Size of the domestic market

The size of the domestic market has been important for Netflix A Business Model Innovation in
its internationalization and expansion measures. This is because of two primary reasons. Firstly,
the increased size of the local markets and domestic consumers is important for companies to
understand the dynamics at play with larger markets, and helps them strategize, and plan
operations accordingly. This increased market size and domestic players have allowed Netflix A
Business Model Innovation to measure and identify its own strengths and weaknesses with
respect to growth, and contain them accordingly.  Secondly, larger market size is also important
for pushing the firm, and brand into exploring the possibility of expansions and new markets. 
Sophisticated and demanding domestic customers

Sophisticated and demanding domestic sounders for Netflix A Business Model Innovation have
pushed the firm into utilizing its resources towards innovation, and have led the firm into
developing unique products for the customers. With demanding domestic consumers firms such
as Netflix A Business Model Innovation have been able to realize their crate and innovative
capabilities, and have put them into use to develop new products, or processes to help the
business grow.

Customer needs that anticipate those elsewhere

Domestic consumers and consumer behaviour patterns are also important for predicting and
anticipating the behaviour and demands of consumers in other markets. For consumers with the
same profile, companies can often predict behavior of market-specific consumers in relation to
the behaviour displayed by the same profile consumers in other markets. 

Firms like Netflix A Business Model Innovation can also influence the behaviour of the
consumers in one market based on the response they have received in another market. This is
important for strategic development within the firm for global strategies as well as global
expansion and development in other countries and markets.
 5. Country risk-:
Political Risks

 Geopolitical risks, known as political risks, transpire when a country’s

government unexpectedly changes its policies, which can negatively impact
foreign companies.
 For Netflix, this has direct impact on the content it can showcase in each
country.As the company is expanding to other countries, governments are
highly likely to introduce new regulations or extend existing ones to
Netflix’s services, such as new taxes or fees.
 For example, government censorship requirements can cause Netflix to
remove or edit popular content, leading to consumer disappointment,
brand tarnishment, or dissatisfaction with the service.
Cost- Related risks

 The company typically enters into multi-year commitments with studios

and content providers globally, some of which are non-cancelable
commitments. Therefore, if global memberships reduce or do not meet the
targeted growth, the company’s liquidity and revenue would be adversely
impacted.
 Pricing for the international market is also a deep problem. Due to content
limitations and a lack of non-English content, many local customers are
unwilling to pay the high subscription costs for a limited content library and
prefer local service providers instead.
 Furthermore, as there is more competition in the industry and potentially
more demand to secure content from producers and content suppliers, this
may drive up the costs of acquiring and producing content.
 As quoted in Netflix’s annual report, “We may, from time to time, adjust
our membership pricing or our pricing model itself, which may not be well-
received by consumers, and which may result in existing members
cancelling our service or fewer new members joining our service.”
Customer Risks

 The market for entertainment and content is increasingly competitive.

 With new and existing competitors, consumers have more options to
access entertainment videos. Such competitors may be able to provide
compelling content and aggressive pricing, such as Amazon Prime,
AppleTV+ and Disney+ Hotstar.Therefore, if Netflix does not continue its
product development or strive to maintain competitiveness in the market,
it risks losing its customer base.
 There is a risk here, given the fact that under the current Netflix's
subscription model, there is no cost on the customer side for switching to a
new product.
Contractual Risks

 Netflix relies on an extensive network of partners to serve its customers

across the world. Its partnerships include content providers, as well as
cable and telecommunications operators, to make services available
through many devices.
 If such partners were to break the contract or choose not to renew it, this
could have adverse effects on Netflix's business. It could mean that Netflix
would lose the rights to stream certain content or lose connectivity with its
customer base.

Technical risks

 Netflix relies solely on technological infrastructure and an internet

connection to deliver its product to consumers around the world.
Therefore, any severe technical fault would resort to Netflix completely
unable to provide its services.
 This is a risk in all markets that it operates in, especially in the locations that
house its servers.
 In addition to reaching customers, technical faults would inhibit Netflix’s
ability to produce content, as it would be unable to power its studios and
equipment, which would result in potential schedule delays.
 6. Mode of Entry:-
• Netflix did not try to enter all markets at once. Rather, it carefully selected
its initial adjacent markets in terms of geography and psychic distance, or
perceived differences between markets. 

• The company has partnered with key local companies to forge win-win
relationships.

• In some cases, it has joined with cell phone and cable operators to make its
content available as part of their existing video-on-demand offerings.

• For example, when Vodafone launched a TV service for its customers in

Ireland, it included a dedicated Netflix button on its remote controls. More
recently, Netflix announced deals with Telefonica in Spain and Latin
America and with KDDI in Japan.
• It had gained expertise in the content people prefer, the marketing they
respond to, and how the company needed to organize itself.

• But the streaming giant is already working with brands in other non-
traditional ways to promote its original programming and platform.

• Netflix solicited dozens of marketing tie-ins with major brands including

Coca-Cola, Baskin-Robbins, and Burger King, to promote the third season of
"Stranger Things."