Personal Research Assignment (Location Description of China)

Introduction

With the current market forces, organizations are looking for ways to go global and expand their operation. However, this move depends on the profile of the organization as well as its performance. Netflix Company as my company of choice has a strong foundation regarding its efficiency in attaining the needs of the customers. For instance, the company generated a total of $4.2 billion in the previous financial year with much expected this year. Besides, the company operates in more than 190 countries globally, but it does not have any operation in China and other countries (Pfeifer, 2011). Therefore, Netflix Company is currently performing well in the market and plans to enter through China market.

Netflix Company in America

I have chosen Netflix Company. It is an international organization based in the US, and it is the leading internet television globally. The company has close to 190 members who access and consume their internet based on television programs. In addition, it offers television programs and movies that run for more than 130 million hours. It also provides digital and documentaries, movies series, and TV programs that are currently released in the market (Jenner, 2018). Therefore, with the adoption of internet technology, the company has continued to expand its customer base across the globe. The organization wants to use its strength and available opportunities to increase their area of operation.

Netflix Annual report

For the year ending 31st December 2018, Netflix company revenues increased by 35% to $15.79 Billion. The net income before extraordinary items increased by 85% to $1.1 Billion. In addition to this, the revenues is a reflection of operating segment to international streaming increase of about 53% to $7.8 Billion, operating segment to domestic streaming increase of about 24% to $7.7 Billion, international segment increase of about 53% to $7.8 and local streaming and DVD segment increase of about 21% to $8 Billion. Therefore, the total revenue after the deduction for the period ending 31st December 2018 was about $4 Billion.

Board of Directors

A board of directors is a group of people elected by Company’s shareholders to represent their interest and make sure that the company is managed effectively. Netflix Company has a variety of board of director’s members chaired by Wilmot Reed Hastings Jr. The following table displays their names and position in the company;

NamePosition
Reed HastingsChairman of Board of directors and managing Board
Susan RiceBoard member
Richard BartonBoard member
Leslie KilgoreBoard member
Jay HoagBoard Member
Brad SmithBoard member
Ann MatherBoard member
Anne SweeneyBoard Member
Timothy HaleyBoard member
Rodolphe BelmerBoard member
Mathias DopfnerBoard member

Netflix Company stock market performance chart

Netflix has been performing consistently well on the stock market within the five year range. In between January and April, the range of Netflix is from 280.50 to 330.50. However, its 52 week range is 432.21 while one year target estimate is about 450.45.

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Countries of operation

Netflix is correctly doing business in more than 190 countries globally. It is Cambodia, Cocos, Croatia, Comoros, Albania, Algeria, Armenia, Australian Antarctica, Bahrain, Bangladesh, Belgium, Benin, Botswana, Eastern and central Africa, west-African Countries, South Africa, United Kingdom Emirates, Vietnam, Yemen, Uruguay, Ukraine, Western Sahara, Vanuatu, Taiwan, Swaziland, Slovenia, Slovakia, Sri Lanka, Singapore, and United States of America among others. The list of countries is long based on the report provided by Netflix CEO Reed Hastings.

Business Plan to operate in China

The company announced its mission to expand its operation across the global by targeting the countries which do not have its services. The Company plans to enter China with its Video streaming services to entertain the clients through the trending movies and documentaries (Wayne, 2018). Due to the regulatory environment by the China government, it can be hard for the company to Navigate through this Country. However, the Company will enter the Chinese market through a licensing agreement with one of the biggest video streaming service in China iQiyi. The iQiyi sports current has about 500 million clients monthly for its free services and approximately 20 million clients for paid services. Through this, Netflix can rely on iQiyi’s growing viewer base while iQiyi will rely on Netflix’s premium contents. Therefore, it will be a win by win agreement between the two organizations.

Conclusion

Globalization has made it easier for a business organization to expand their market. It is evident that even with increasing competition in the local market, an organization can choose to operate in other markets. Considering the case of Netflix, it has managed to operate in more than 190 countries with the future still promising for more expansion. The Company has a strong capital base to expand especially China as its current target. However, even with strong regulation by the government of China, a licensing agreement between Netflix and an entertainment company would be a good plan.

References

Jenner, M. (2018). Introduction: Netflix and the Re-invention of Television. In Netflix and the Re-invention of Television (pp. 1-31). Palgrave Macmillan, Cham.

Pfeifer, P. E. (2011). On estimating current-customer equity using company summary data. Journal of Interactive Marketing, 25(1), 1-14.

Wayne, M. L. (2018). Netflix, Amazon, and branded television content in subscription video on-demand portals. Media, Culture & Society, 40(5), 725-741.