Netflix STEEPLE S2 Summative

The macro business environment affects organization operations positively or negatively. Therefore, companies must rely on appropriate analysis tools to determine the positivity or negativity of a macro business environment. One of the advanced assessment tools is STEEPLE. The acronym stands for social, technology, and economic. Others are environmental, political, legal, and ethical. Netflix is a video streaming business attracting subscribers from all over the world. The business has continued to grow because of advanced technology. However, the growth has slowed down because of negative social, economic, and environmental effects.

Technology

Netflix is a successful video streaming business. It has continued to grow since its inception because of advanced technology. The organization prepares films and distributes them through its online platform to millions of subscribers. According to BBC (10), modern technology has enabled Netflix to attract more than 207.6 million subscribers globally. Likewise, the technology has expedited Netflix to distribute blockbusters to subscribers. Examples of the hits worldwide are Seinfeld, witcher, and Squid Game (Nicolaou 7). It would be impossible for Netflix to have succeeded this much without developed technology. The company has recorded significant growth since 2019, but the subsequent years have remained slow for the business. However, the slowing down of producing and distributing movies has not stagnated because of the issues with technology (BBC 6). The technology is still intact, and Netflix will continue relying on it to reach as many consumers as possible. Other STEEPLE factors like social, economic, and environmental cause business slowness.

Social

Netflix relies on subscribers to sell its blockbusters globally. Thus, social issues are a significant hindrance to accomplishing organizational objectives. Netflix recorded desired growth in subscribers since 2019, but the increase slowed down because of the outbreak of covid-19 that spread faster in 2020 (Rushe 4). The pandemic prevented social movement. At the same time, the pandemic hindered individuals from working in their organizations to earn a livelihood. Furthermore, the disease caused considerable distress to the global population. The occurrence interfered with the six million subscribers target in the first quarter of 2020 (Rushe 5). Netflix could not reach its target. Consumers tried to eliminate the adverse social and health effects of the pandemic.

The management hoped the pandemic would slow down and allow social movement. The situation had to change for the business to continue generating profits for the stakeholders. Nevertheless, the pandemic seems to continue affecting the global masses. According to BBC (6), Netflix targets to attract less than 2.5 million subscribers by the end of the first quarter of 2022. The news is alerting because Netflix depends on online viewership to generate revenues. The management expects global governments to ease the covid-19 mitigation protocols. The international authorities should slow down the preventive measures to allow the organization to continue with movie production (Rahman and Arif 12). Also, easing the mitigation measures will allow the global population to resume their daily activities. As such, consumers will have time to earn resources used to purchase online distributed movies.

Economic

Netflix continues to make profits amid the current challenging business environment. Nonetheless, the revenues are not as much as the organization would prefer. The covid-19 pandemic has caused the company to fail to attract substantial new subscribers (BBC 5). The failure to attract more customers leads to unwanted commercial outcomes. For instance, between 2019 and 2022, Netflix’s share has continued to drop up to 11% (Rushe 3). It means the business is not booming as the shareholders would prefer.

The management wants the easing of covid-19 mitigation measures for it to resume shooting more videos. However, Netflix must prepare adequate resources to pay behind-the-scenes workers. According to Nicolaou (5), more than 60000 employees like cameramen, editors, and make-up artists have threatened to strike. The workers demand their pay before resuming work. Nevertheless, the management dismisses strike claims as mere allegations. Workers are ready to provide their services because Netflix pays them per their work contracts.

Environmental

The current business environment is harsh for Netflix. The organization struggles to attract new customers because of the adverse covid-19 effects (Rahman and Arif 12). Also, the new entrants into the video streaming business are leading to stiff competition. Disney+ is a relevant example of heightened business rivalry in the streaming business. According to BB (10), Disney Plus has attracted more than 100 million subscribers in the last few years of operations. The business is such a great competitor. Within five months of operations, it attracted not less than 50 million subscribers (BB 11). Netflix must be proactive in adding to its competitive edge because the competition stiffens as new market entrants increase.

In conclusion, Netflix is still a viable business because of the advanced technology in preparing and streaming movies. However, the organization must overcome the social, economic, and environmental challenges caused by the covid-19 pandemic. The global health crisis has interfered with operations and consumers’ daily activities. The interference is an outcome of the mitigation measures adopted by governments.

Works Cited

BBC. “Netflix Faces Rocky Road After Pandemic Wins.” BBC News, 20 Jan. 2022, www.bbc.com/news/business-60077485.

—. “Netflix Shares Plunge Amid Fears Coronavirus Boom is over.” BBC News, 21 Apr. 2021, www.bbc.com/news/business-56826190.

Nicolaou, Anna. “Netflix Says Its Programming is Back on Pace After Pandemic Slowdown.” Financial Times, 10 Oct. 2021, www.ft.com/content/fbe30966-fb29-4694-b69d-816d2c632544.

Rahman, Kazi T., and Zahir U. Arif. “Impacts of Binge-Watching on Netflix During the COVID-19 Pandemic.” Discover Journals, Books & Case Studies | Emerald Insight, 16 Aug. 2021, www.emerald.com/insight/content/doi/10.1108/SAJM-05-2021-0070/full/html.

Rushe, Dominic. “Netflix Records Dramatic Slowdown in Subscribers As Pandemic Boom Wears off.” The Guardian, 21 Apr. 2021, www.theguardian.com/media/2021/apr/20/netflix-records-dramatic-slowdown-in-subscribers-as-pandemic-boom-wears-off.