Case Study: Netflix Environmental Forces Analysis || Netflix PESTLE Analysis

 

Case Study: Netflix Environmental Forces Analysis

 

Introduction

Netflix is the most popular among all of the streaming platform in the world. In fact, if we compare the market value among the present Media company, Netflix is the top of the list taking about 241-billion-dollar market value. Besides, Netflix is dominating the USA market taking 58.5 % market share. At present, Netflix users are 203.7 billion and 120 new subscribers are joining per minute. Netflix started as movie rental service in 1998 taking only 30 employee and 925 DVD. Users order from website of Netflix and receive DVD by mail and again return mail after watching. In 2007, Netflix launched the streaming service because they could realize that streaming service demand would stay top of the list in future. At present Netflix services operate more than 190 countries. 

Environmental Forces

Demographic Environment

Demography environment is of measure interest to marketers because it involves people and people makeup markets. The world population growing at an explosive rate. According to global overview 2021, total population now exceeds 7.83 billion where 49.6% female, 50.4% male, 31 % median age, 56.4 % urban population, 86.5% overall literacy (adults aged 15+), 83% female literacy (adults aged 15+), 89.9% male literacy (adults aged 15+). Netflix is more popular among Millennials with 84 percent positive opinion then among other age group and it is more popular among women with 68% positive opinion than among men.

 

AGE Most Popular with Millennials With 84% positive opinion. Netflix is more popular among Millennials than among age groups.				Gender More Popular with Women With 68% Positive opinion. Netflix is more popular among woman than among Men.
	Millennials	Generation X	Baby Boomers	Women	Men
Positive Opinion	84%	67%	47%	68%	63%
Popularity Ranking Among Group	1st	5th	16th	4th	9th

 

Economic Environment

Markets requires buying power as well as people. Marketers must pay close attention to major trends and consumer spending pattern both across and within their world markets. The global video streaming market size was established at USD 50.11 billion in 2020 and is expected to reach 59.14 billion in 2021. Growth rate 21%.

Natural Environment

Netflix doesn’t release any wastage because they don’t produce any product but they release carbon dioxide by using electricity to keep their servers running. The company invested to use clean electricity by setting numerous wind turbines and solar panel system. In 2019, the company successfully managed to 50% clean electricity use. By 2025, they want to manage 100 % clean energy.

Technological Environment

The technological environment changes rapidly. After coming the internet, world becomes smaller. At present, internet users are about 4.66 billion that is the 60 percent of the world’s total population. Now smartphone users are 3.8 billion people. The website of Netflix can be accessed by any smart devices or computer connected to the internet. Netflix is the first online DVD rental service provider. In 2007, it launched online video streaming services.

Political and Social Environment

Political environment consists of laws, government agencies and pressure groups that influence or limit various organization and individuals in a given society. On account of ever-increasing globalization, companies are now affected by the sociopolitical environment of not only their own country but also other countries with which they have important trading relations. Following some regulations.

Government Regulations

·         US has restriction on some countries like Crimea, North Korea and Syria.

·         Netflix is not present in the china because of permission issues from Chinese government.

·         Another political affect is AT & T to the federal communication commission. This petition aims are to limit the usage of online streaming platform such as Netflix.

·         EU passes a different law that affects the content of Netflix. This law state that any media content provider within EU will have to produce at least 30% content that is strictly European nature. This law further implies that Netflix will be changed the same amount tax as a traditional media provider which is 26 %. As a result, Netflix users have to pay higher price for using this platform.

·         In EU, particularly government has some restriction on technology company to protect the competitive company and targeting users by through their data collection practices.

Socially Responsible Behavior

Netflix is mostly used renowned for complying to ethical business standards and morality. Netflix is also providing scholarship and charities.

Cultural Environment

Cultural Shift affects the Netflix significantly. Because people are now shifting to internet from traditional cable system. Therefore, people now prefer smartphones and tablets to bigger screens. As a result, Netflix becomes the most used video streaming platform.

Competitor

There are many competitors in the video streaming market like Desney+, Blim, Amozon Prime Video, iQiyi, Tencent Video, Youka, Viu, Hulu, Alt Balaji, Eros Now, Felix. But Netflix is the most used video streaming services in the world because they gain strategic advantage by positioning their offerings strongly against competitors offering in the minds of consumers.

Justification

Netflix is the most used and popular streaming service company because of some successful decision. First of all, they could adapt in time with the changing of technological environment. Netflix was the first online DVD service provider while Blockbuster was the biggest DVD service provider but people had to go to blockbuster DVD shop for renting any DVD. In 2007, Netflix first launched streaming service. By using any smart devices users can stream. Secondly, competitive advantage also helps to be most used streaming platform competitive advantages are their huge content library, ad free services, advanced technology, original content. One survey reported that about 57% users subscribe Netflix for its original content.

 In a nutshell, we can say, Netflix gives importance to customer value and technology because they know understanding customer is just as important as understanding technology.