Introduction
Netflix is an over-the-top media services company that originated in the United States and provides online video-on-demand all over the world. It is a subscription-based service that offers movies and television shows and uses Internet streaming to deliver the media to subscribers. Currently, Netflix is one of the largest media companies in the world, and its business is almost all over the world. There are many high-quality original contents, such as film and television drama resources on the Netflix platform. Also, the content of Netflix is carefully selected, which is as close as possible to the local culture in the videos played. The development of the film and television industry needs market support, and the Chinese market is vast. Many countries list China as one of the most important export markets, but Netflix has hesitated to enter the Chinese market. Currently, consumers still cannot directly use Netflix in China region. However, Netflix is available in Hong Kong, Macau, and Taiwan. Therefore, it is still possible for Netflix to enter China.
Netflix analysis
Assessment of the Attractiveness of China for Market Entry
The competitive situations that Netflix will face if they enter China are the high rates of risks and issues and revenue earning. Another issue Netflix will encounter is going through strict censorship by China’s authorities. There are certain shows on Netflix that people in China watch but through a different streaming site. Netflix would have to go against iQiyi, another big streaming site in China. It will be difficult for Netflix to enter China since they have forbidden several American technologies to enter their market. iQiyi is an ad-free streaming site in China that streams Chinese TV series. Netflix can successfully go against its competitor because the core competence of its platform has ads and its competitor does not. They make more due to the ads. Not only will they go against iQiyi, but will have many powerful competitors involving streaming sites in China.
The main barrier that Netflix may encounter is the revenue earned. China has ad-free local streaming sites whereas Netflix does not. Netflix is normally a high-price platform, if it were to enter China’s market, then it will not be able to have its service priced high. The currency earned in the United States compared to China will be different. Another main barrier that Netflix will encounter is China’s government laws. China has a strict policy of what they allow/do not allow on media. They have control of what they want in their country. This makes it difficult for Netflix to enter the market because it streams a variety of TV series, movies, documentaries, etc.
It is a good time for Netflix to enter China since it will want to work with a company with high revenue. Although China’s government regulations are strict, it will still be difficult for Netflix to enter since it is international. Throughout the years, Netflix has started producing its own content allowing it to enter the market. Since Netflix has high revenue and finances, it will be able to operate well in China’s market. There are some ways Netflix can enter the Chinese market such as a collaboration or partnership with another company in China. Netflix can also pursue other local and foreign markets since its goal is to broadcast its shows internationally. Netflix has learned to include languages and subtitles for countries to understand. Netflix made sure that it can partner and collab with successful companies to have a good reputation in the market.
Netflix should devote significant resources to market entry in order to increase its sales and consumers. They make sure to optimize their content spending to satisfy their consumers and provide quality content and a variety of TV series, documentaries, movies, etc. As Netflix continues to spend its profit, they have to strategize on what to produce and how to distribute its goods. One of the strategies they can use for international operations is to earn a greater return on investment.
Netflix should enter the market given the competitors and barriers because it will allow them to receive more consumers in China. China is one the largest economy with a growing consumer market. Netflix would also increase its market share and sales once it enters because it will capture a lot of consumers. Although China has difficult government regulations, Netflix still has a chance to enter the market. Some of Netflix’s production was created on its own and became successful on other streaming sites. Since Netflix is a big streaming platform, it can partner with other companies as a way of entering the market. Since their consumers in China are based in Mandarin and Cantonese, their strategy is to produce more TV series in their language. This also gives Netflix an opportunity to expand its globalization internationally and increase its profitability.
Chinese Background
Cultural Environment （my part）
Political/Legal Environment （my part）
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