The document discusses Netflix's strategy for international expansion and recommends improvements. It notes that Netflix's current "build" strategy of developing its own infrastructure in new markets incurs huge costs and debt. This strategy is high risk because reactions to Netflix's service in foreign cultures are uncertain. The document recommends Netflix initially "buy" access to existing infrastructure in new markets to gauge reactions before fully investing in building its own infrastructure. This will help limit risks from expanding into areas where its service may not be well received.

1. How can Netflix improve
its growth strategy?
KLC Consulting
Louise Kendaru, Nathalie Kauz,
Ashley Claw, Arbre’ya Lewis, Trent Large

2. The online movie market
in the U.S. is an
$11 billion industry.
Source: http://selectusa.commerce.gov/industry-snapshots/media-entertainment-industry-united-states.html

3. This industry targets a ‘mass market.’

4. It is a highly competitive industry.

5. There are a number of key
players in this industry.

6. Through online services they disruptively
innovated the movie rental industry.

7. Netflix created this streaming market and
became its leader.

8. Overall, Netflix has been very
successful.

9. Netflix has been expanding internationally.

10. To deliver their content, their strategy is to
build the infrastructure, rather than buying
access to pre-existing infrastructure.

11. Their ‘build’ strategy has incurred huge
debt.

12. Expansion in 2011 caused their 2012
profit to plummet.

13. After expansion into Europe, profit
increased.

14. Why is this?

15. Foreign cultures react differently to
American content.

16. Building global infrastructure costs
significantly more than buying.

17. Building is a high risk strategy when the
country’s reaction to Netflix is uncertain.

18. We recommend buying before building to
gauge market reaction before investing in.
infrastructure.

19. Netflix should build if and
when their service is well
received
Netflix has high risk
“build” strategy to
expansion
It is unclear how
different geographical
markets will react to
their service
A “buy” strategy when
entering a geographical
market will limit risk

20. Any Questions?

21. Images
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