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Case
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Reference no. IMD-7-2185
Published by: International Institute for Management Development (IMD)
Originally published in: 2020
Version: 12.05.2020
Revision date: 26-Jan-2021
Length: 20 pages
Data source: Published sources

Abstract

Netflix's stellar growth is jeopardized by a changing competitive landscape and fluctuating trust from the market related to its strategy of extensive proprietary content development. With the rising presence of Google's YouTube and Amazon's Prime Video, as well as Apple's Apple TV Plus and Disney's Disney Plus entry into the ring, customers get access to a broader range of content and aggregated offerings. Still, content seems king, and Netflix seeks to outrun competitors with their own award winning and broad video library. That however requires increasing content investments followed by costly marketing efforts to sustain growth. Critics wonder if Netflix's continued binge-spending will translate into sustainable growth while debts increasingly weight on the balance sheet and cash flow remains negative. In a time when most competitors seek to vertically integrate or platformize, often fueled by deep pockets, is Netflix pursuing still the right strategy? Or does Netflix need to revise its business model in order to successfully compete also in the future? This case explores what's going on for and around Netflix, inviting students to redefine Netflix's future strategic direction.

Time period

The events covered by this case took place in 2019 onwards.

Geographical setting

Region:
World/global

Featured company

Netflix
Employees:
5001-10000
Turnover:
USD 20.15 billion
Industry:
Information technology

About

Abstract

Netflix's stellar growth is jeopardized by a changing competitive landscape and fluctuating trust from the market related to its strategy of extensive proprietary content development. With the rising presence of Google's YouTube and Amazon's Prime Video, as well as Apple's Apple TV Plus and Disney's Disney Plus entry into the ring, customers get access to a broader range of content and aggregated offerings. Still, content seems king, and Netflix seeks to outrun competitors with their own award winning and broad video library. That however requires increasing content investments followed by costly marketing efforts to sustain growth. Critics wonder if Netflix's continued binge-spending will translate into sustainable growth while debts increasingly weight on the balance sheet and cash flow remains negative. In a time when most competitors seek to vertically integrate or platformize, often fueled by deep pockets, is Netflix pursuing still the right strategy? Or does Netflix need to revise its business model in order to successfully compete also in the future? This case explores what's going on for and around Netflix, inviting students to redefine Netflix's future strategic direction.

Settings

Time period

The events covered by this case took place in 2019 onwards.

Geographical setting

Region:
World/global

Featured company

Netflix
Employees:
5001-10000
Turnover:
USD 20.15 billion
Industry:
Information technology

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