Strategic Management

Team members: Amirhossein Abdshantiaei, Farzad Shaloo, Mojdeh Hayati

Lecturer: Dr. Rajagopalan
27 Oct 2022
 1. How can Netflix analyse (cultural) differences between India and other markets while
crafting strategies for Indian consumers?

For analyze differences India and other markets can use CAGE Model. In this below CAGE Model is
explained shortly.

The CAGE Distance Framework identifies Cultural, Administrative, Geographic and Economic
differences or distances between countries that companies should address when crafting international
strategies. It may also be used to understand patterns of trade, capital, information, and people flows.

Culture:

The difference in the cultural value in the United States and India has greatly influenced the sales and
profitable growth of Netflix in India. Changing the services according to the cultural values of the Indian
population i.e. language, price and content would serve as the key factor in grabbing the attention of
consumers resulting in the increased subscription rates.

Administrative:

One of the key administrative issues faced by Netflix in India mainly includes the concerns associated
with censorship. Before the launch of any service or product in the Indian market, Netflix is
recommended to take permission from the regulatory bodies for the authorization of the content
generated to avoid complications in the future. In the case of unapproved sensitive content, the
government of India might take action against the provision of such content to wide-ranging customers

Geographic:

Considering the regional differences based on the cultural value, beliefs, political system and policies
i.e. the U.S. is a western nation while India is an eastern nation, the content generated by Netflix is
highly demanded in the United States which lacks in India. Thus, product differentiation is required to
gain a foothold in the Indian market

Economic:

The economy of India is considered to bring significant improvement in the future. This is due to the
reason that the interest rate of the country is low and the inflation rate is considered to get low. Thus,
the increase in the purchasing power would increase the GDP growth of the country leading to
increased economic growth and increased sales and profitable growth of Netflix through improved
average spending of the customer for entertainment services.
 2. Which factors of the macro-environment affect Netflix India, when ascertaining the best
strategies to go ahead?

Netflix in India operates in a complex and dynamic environment characterized by regulatory changes,
growing environmental activism, collective social trends, technological changes and evolving legal
system. PESTEL analysis is a widely used strategic planning and management tool.

 Political Factors:

These are the Netflix in India the Way Ahead forces that tends to be altered by the influence of
government on the infrastructure of country. The political factors may involves environment regulations,
employment laws, tariffs, tax policy, trade restrictions, political stability and reforms. It is noteworthy,
that the charities needs to be included where a government are not willing services and goods to be
provided.

 Economic Factors:

The Netflix in India the Way Ahead economic factors or forces involves interest rates, inflation, and
growth of economy, cost of living, working hours, wage rate and exchange rates. Combining these
factors, it last greater and inevitable impact on organization.

 Social Factors:

The culture or social influence on certain businesses vary from country to country. It is significant to
consider these factors. The social factors includes safety and health consciousness, various
demographics, population growth rates and cultural aspects.

 Technological factors:

Notably, Netflix in India the Way Ahead technology is one of the most important way of being
competitive in the highly competitive market arena. Not only this, it drives globalization, the factors
includes environmental and ecological aspects, and available services as well as products. An
organization should innovate and be compatible with the technologies.

 Legal factors:

The Netflix in India the Way Ahead legal factors involves the certain laws and regulations which might
effect on the business operations of an organization. It also includes impending and current legislation
that tends to impact on the industry in areas including competition, employment, safety.

 Environmental Factors:

In the Netflix PESTLE Analysis, the environmental elements affecting its business are as below:
With growing concern regarding environment and sustainability environment factor become an
important aspect of PESTEL Analysis. Since Netflix is a company, whose business is completely online
and they don’t have direct impact on the environment still they do their best to protect the environment.
To protect the environment Netflix tries to use renewable technologies to ensure sustainability.

3. Analyse competitiveness in India‘s SVoD industry with an adequate tool for

industry analysis?

Strength: Weakness:
1- Original Content 1- High cost of advertising

2- expanding the portfolio by including content in regional

2- Restricted Copyright
languages

3- not doing censor its content 3- Platform User Interface Issues

4- providing movies with different quality which 4- Decline in Net Profit

5- Worldwide Reach

6- Strong Brand Image

7- Extraordinary Content

8- Extensive content library

Opportunities Threats
1- Local Alliance 1- Single Account, Multiple Users
2- Increase Subscriber Base 2- Tough Competitors
3- Lower the Price of Subscription 3- Change in tastes of film
4- Diversification into regional titles 4- lacking infrastructure for internet
5- Strong Brand Recognition
5- cultural differences and people tendency
6- Alliance Possibilities With Local Marketplaces 6- economic situation for subscription
7- Freedom To Launch New Customer-Centric Features
7- Content Piracy

Strength Weakness

SO STAREGY: WO STAREGY:
1- Shift in Indian viewers' preferences 1- Increasing the cost of advertising
Opportunities

towards international content and to attract costomers and increas

Western culture with high qulity profit
production

ST STAREGY: WT STAREGY:

1- Providing movies with different 1- Offering a free trial period of

quality which make people access the month
Threats

Netflix even with low-speed connection

2- Provid local content and bilingual
series
3 content production without censorship
-
 4. How would you evaluate the business model adopted by Netflix India? What are
its major strengths and weaknesses?

In India, Netflix offered only video-streaming services on demand. In response to the consumer
migration towards file-sharing services like The Pirate Bay and Mega upload Ltd., Netflix launched its
video-streaming service in 2007 The underlying motive behind launching this service (in addition to the
DVD rental service) was to make the members switch to the streaming service in the hope of reducing
the cost of shipping DVDs.

Netflix announced its first original series. Netflix was able to maintain its market by localization by
offering movies in the local language. Also, Netflix removed the censorship and left it up to the
customers to choose and used the ranking system. On the other hand, Netflix introduced a data saving
system for the high cost of internet. Netflix also paid a lot of money for its advertisements in India.

Strengths

1. SVoD service players in India, Netflix offered greater quality and a larger catalogue of
international or Western content
2. Not doing censor its content
3. Providing movies with different quality which make people access the Netflix even with low-
speed connection

Weaknesses

1. In terms of Indian content, Netflix had less to offer than its competitors with extensive Indian
movie catalogues, including Bollywood and regional films and series in various vernacular
languages.
2. High subscription fee for all segments of society.
3. Lack of knowledge of Indian culture
 5. Which strategies should Netflix follow in order to succeed in the Indian market?
Which cultural considerations influence those strategies?

Here are four strategies on how Netflix can gain the audience at a grassroots level and beat out its
competitors.

1. Price Restructuring:
If Netflix has to capture more subscribers, it has to bring down its price as India is a price-sensitive
country

2. Family-oriented content
India is considered as a collectivist society with an emphasis on activities that enable the family to
spend time together. As it is common to observe a family encompassing wider family circle sometimes
even multi-generational, this also impacts the decision and how content is consumed. So Netflix will
have to develop a programming strategy understanding the Indian culture and its sensitivities. It might
also mean getting its hands dirty with few Indian reality talents shows or venturing into Indian soap
operas.

3. Focusing on regional content

Having regional content can attract many thousands of people and most people in India are price
sensitive but brand-agnostic i.e. as long as they get their regional content at their fingertips and
economical prices, they are easy to be satisfied.

4. Cricket – the sport that unites the entire country

Cricket is considered a religion in India. Cricket is the only sport that unifies the entire country together.
In India, one has always seen a spike in the number of televisions sold before the cricket world cup
including this year where “television sales have risen 25-30 percent since the first week of May” due to
the cricket world cup. Acquiring the rights to cricket and offering it to subscribers at an affordable price
will guarantee incremental subscribers for Netflix

* By adding the local languages to the interface of users as well as adding the subtitles and dubbed
content to the local customers, the company would be able to attract the larger customer base and
maximize the market share.
References

Adler. (1997). Shout-Western College .

Bushey, R. (2014). How the $400 Million Loan Nelflix Just Took out Will Help lt Undercut Hollywood.
www.businessinsider.in/How-The-400-Million-Loan-Netflix-Just-Took-Out-WillHelp-lt-Undercut-
Hollywood/articleshow/29918747.cms.

Gudykunst.B.(ed). (1986). intergroup commiunication.

Philip, B. (2019). Micro and Macro environment factors to be analyzed for companies. linkedin.

Reed, J. (1986). Southern folk,plain and fancy:Native white social types,Athens.

Tennen, D. (1990). you just dont understand, women and men in conversation.