Introduction
Netflix is a global film streaming company that took the film and creative industry by storm through its innovative approach to internet film streaming. Netflix has managed to surpass the constraints of the traditional business approach model by ensuring that it advances the cultural identity of specific regions (Netflix, 2023). The company has tailored its content and marketing, as well as pricing, to encompass the unique and personalized realities of specific regional markets. Nevertheless, it is still not clear whether Netflix will manage to maintain its global dominance with the emergence of numerous streaming companies such as Showmax, Amazon Prime Video and Hulu. The rising success of these organizations raises captivating questions on whether Netflix’s rise to global domination is an existing reality. Consequently, there is a need to institute a paradigm shift with regards to the company’s global management strategy and ensure that the organization adopts a management strategy that caters to specific market segments while ensuring the utmost consideration to regional differences as well as specific audience taste management (Netflix, 2023). Consequently, this essay seeks to outline how the company will effectively adapt to the specific local preferences, and translate specific global trends. Furthermore, the essay will also assess Netflix can navigate specific challenges the organizations adopt towards its regional customization while maintaining a strong and cohesive brand identity in all these regions. The essay is not just a tailored focus into Netflix’s global strategy but also serves as a lens through which the entertainment industry can strategies to seek for global relevance. As such while most streaming organizations seek for effective cultural influence, Netflix adopts a polycentric approach that offer fascinating incites on whether it has unraveled global influence or there are still pitfalls to this approach.
Management: application and review of the business.
Netflix a cautious approach management approach with regards to different countries. This stems mainly from the customer’s preferences and taste in different regional markets. In this case, the EPRG framework plays a crucial role in establishing the organizational approach to management. EPRG stands for ethnocentric, polycentric, regiocentric, and Geocentric. This framework is vital in dissecting the organizational strategic approach to structuring its global management.
Netflix global strategy: Polycentric approach
All though it is not clear whether the type of global management structure the organization uses we can deduct from its content customization and global strategies that it uses a Polycentric approach. The company’s global strategy encompasses a strategic balance between specific needs as well as a unified company and brand identity. As a streaming company, the organization takes a polycentric approach as a management strategy (Berardo and Lubell, 2016). Unlike the ethnocentric approach, the polycentric approach helps in maintaining a standardized global strategy while allowing some specific connotation of the ethnocentric and polycentric approach catering for specific segmentation (Berardo and Lubell, 2016). The company realizes the significance of creating shows that are region-specific and tends to invest more in ensuring that each region gets content that is relevant to their cultures without losing the standard global brand image. This content management approach is quite significant in attracting new subscribers to the platform while maintaining the existing subscribers. As such, the approach is quite aligned with a polycentric approach that ensures that there is an emphasis on adapting to local content and preferences as well as specific conditions.
Audience Management Plan
STP framework
We will use the STP framework to analyse the organization audience management and how the company tends to market its content to specific audience. The framework stands for Segmentation, targeting and positioning (Pilipets, 2019). The figure below outlines the organizational STP insights as outlined through its managerial and marketing prospects.
Segmentation: Under segmentation, we will look at demographic behavioral and psychographic approach. In demographic approach the organization focuses on young adults and lower to middle-class families with enthusiastic approach to creative film production. In behavioral segmentation section Netflix looks for customers that are loyal but can also switch to low price (Ma, Pu and Wang, 2021). This means that it has tailored its pricing to cater for both low, middle to high income users ensuring that each user can able to access content that fits their income and the weight of their pocket. In the psychographic section, the company targets busy individuals who have no time to shop for DVDs and people who prefer watching movies within in cinemas and have introverted characteristics. Finally, the company also targets price-sensitive individuals who are on the quest for quality content but have limited resources to access such content.
Targeting: Under targeting, the organization targets the audience by offering value for their money and ensuring that the content produced meets their expectation. This is done through a rigorous exercise of vetting new shows and value addition, such as the addition of regional-specific subtitles to ensure that the audience is satisfied by both the production and streaming. Furthermore, Netflix ensures that the streaming is uninterrupted by avoiding ads and ensuring that the video streaming algorithm is smooth and caters to the needs of the internet bandwidth and streaming capabilities of different devices. Finally, the organization ensures that it offers ideal pricing that caters to both lower classes to middle-class families (Ma, Pu and Wang, 2021).
Positioning: The company has positioned itself as an organization that is both convenient and affordable to the audience. Its positioning also come in the form of customized content as the platform seek to customize and personalize content according to the user’s habits (Ma, Pu and Wang, 2021). Finally, the type of content generated by the organization is of a high quality observed by the different ranges of viewing resolution highlighting specific viewing preferences to the customers.
As such, under audience management, the organizational polycentric approach is even more prevalent. The need to cater for audience specific and personalized content is more pronounced within the entertainment industry, and this comes as a result of cultural differences and differences in personal preferences across the whole entertainment domain. Consequently, in this case, Netflix makes use of innovation by adopting a robust algorithm that not only recommends viewing content based on the individual viewing habits but also goes beyond to consider individual’s regional trends as well as the cultural and political situation of a specific region (Napoli, 2016). Consequently, this approach is quite effective as it clearly caters to the user’s needs by analyzing the specific regional needs and cultural preferences, helping the company to finetune its content generation to align with the user’s needs and recommend the same to the user. On the other hand, the dynamic user management system aligns with the polycentric managerial approach as the organization recognizes that the user’s behaviors and tastes can vary across different regions and market segments (Napoli, 2016).
Content Localization and Curation
Another Key Aspect of the Company’s localization comes in the form of content localization. Besides tailoring content to user’s preferences, the organization ensures the localization of content is engraved within its polycentric management structure. This is majorly visualized through content customization, such as making the content accessible to a more global audience. Moreover, the organization collaborates actively with most local creators and content providers and talented individuals to produce region-specific content (Schäler,2010). Localization is not just about language as the organization has managed to culture its content to encompass a cultural context (Schäler,2010). This is affected through ensuring that the produced content feels more specific as well as authentic within a given diverse audience within a global market consequently aligning with the polycentric management strategy.
Middle Management concept
Netflix’s polycentric approach, which encompasses both the egocentric, ethnocentric and geocentric approaches, is quite significant and requires a dynamic and flexible management approach. The company has effectively cut out middlemen management by bypassing their services and tailoring and directing their services directly to the customer through their own streaming services (Islam and Ali, 2017). This does not quite offer an effective approach, considering the significance of middleman management in any global organization. With middlemen, the organization can effectively empower local teams to enjoy significant autonomy, allowing them to come up with tailored and regional-based decisions regarding content, marketing decisions and strategies, as well as specified programming decisions. This move can help the organizations to quickly respond to regional demands regarding a specific program (Islam and Ali, 2017). For instance, middleman management’s “Black Mirror” release in India was a regional decision that resulted to binge-watching sessions in India as it was more preferred by the local viewers. This increased subscribers to the platform at a rapid rate, as most viewers were pleased with this move. With more middlemen management in different regions the organization can enhance their online presence and increase the number of subscribers. Nevertheless, regardless of its vital significance, in this context, this approach requires a significant guidance from then central business to ensure consistency (Dopson and Stewart, 1990). Insights such as shared data and other best practices are very significant in aligning these practices and initiatives with the overall strategies and visions of the organization, and these have been effectively employed and reflected through Netflix’s management structure.
Assessment of the Polycentric Approach
Netflix Business Model
To better understand the company’s approach to management and whether the polycentric approach has succeeded or not we need to look at the business model of the organization. Netflix adopts a hybrid business model due to the company’s operations that encompass a demanding streaming content that are effectively tailored to specific regional establishments. This online business modeling provides a stronger capability for large-scale and highly involving efficiency in the operation while minimizing costs. Consequently, the organization exhibits a plat form business model which caters for its online streaming operation while catering pipeline entertainment and production (Moore, 2019). This strategy is specifically significant considering the company’s competitive environment. The use of pipeline model caters to the traditional approach to movie production and distribution considering there is still a section of customers which are under the organization’s segmentation that seek traditional movies. As such, adopting the traditional pipeline approach helps the organization to control content production though a straight forward approach (Moore, 2019). Consequently, the organization takes into account the regocentric and ethnocentric approach to management culminating to an overall polycentric approach which encompasses an amalgamation of both regiocentric ethnocentric and geocentric management. This approach goes hand in hand with the business models discussed above.
Achievements
The organization has hard several achievements with its purported of this approach to the managing the platform. The polycentric approach has facilitated the creation as well as acquisition of content that is specific to regions. The polycentric strategy has also effectively resonated with the global audience, evidenced by the production of different region-specific productions such as “Dark” in German and “Sacred Games” in India Among others (Haddad and Dhoest, 2021). The polycentric approach has also enabled the organization to celebrate cultural diversity across its diverse market segments and regions, therefore strengthening its regional and global brand appeal. On the other hand, there has been an increase in subscribers since the adoption of this strategy. The organization offers content that caters to the different individual tases as well as their specified preferences. Netflix has also become a global entertainment destination offering entertainment that cuts across age, social class and cultural background. Finally, Netflix has been able to adapt to different market dynamics through the polycentric approach. While Netflix’s physical organizational structure is centralized, its services are effectively decentralized to envision the polycentric structure. Consequently, this has enabled the organization to effectively and swiftly adapt to the changing dynamics within the markets. The local teams possess the autonomy to respond to specific regional challenges by curating solutions to specific problems. Furthermore, the regional team can also seize opportunities, ensuring that it enhances the organizational agility within the evolving organizational industry.
Challenges of the Polycentric Approach
Cost of content production: Netflix’s polycentric approach to content distribution offers several challenges, starting with an increasing cost of content production to cater for specific regions. This process requires substantial investment. As a result, it is hard to manage this cost and balance with production of quality content. This may sometimes give rise to a compromise which offers a constant challenge to the marketing team. On the other hand, balancing between global and local identity can sometimes prove to be a hard venture within the polycentric approach. Global brand identity is equally vital when compared to production of local relevance. Navigating this imbalance can sometimes prove challenging as it requires navigating the thin line between content offering that appeal attentionally while maintaining a very strong regional identity that cater for a given diverse audience segments.
The China cases
Cultural sensitivity in China brings an intriguing challenge due to specific government restrictions and online censorship. This issue is similar to a cultural issue whereby a specific content in a specific region may face a critical backlash in another region (Onyusheva and Baker, 2021). As an emerging with an increase population, China could have been the best market for Netflix. Nevertheless, the Chinese market offers a difficult situation that makes the application of a polycentric approach difficult within the country. Furthermore, the souring economic relationship between the US, which is a mother nation to Netflix and the Chinese government. While strategic and intensive customization might be effective in such a market, there are cases of language barriers, and Shi & Zhou (2021) believe that the company should shun the country and focus on more emerging and receptive markets. however, in the recent past, China has eased its approach by relaxing the entry policies and regulatory laws, and it is the right time for China to advance its polycentric management approach to the country.
Customer Changes in Consumption
Netflix adopts a revolutionary data-driven approach in its decision-making process. Consequently, the organization is much more concerned regarding algorithms that cater for user behaviors as well as preferences. The customer-centric approach is very much in line with the polycentric managerial and service delivery model and this is vital as it acknowledges the viewer preferences. Furthermore, responding to changes in consumption habits the organization invests in a diverse content library. This approach, coupled with the polycentric approach, allows the organization to remain resilient amid the changing customer preferences and shifts.
Narrow View
Netflix has been quite careful not to adopt a narrow view of management. A central leadership is a solid and consistent leadership approach that is very useful especially when the organization wants to maintain an overreaching global strategy. It is effective in preventing defragmentation of services and avoiding conflicting approach among regional teams. The challenge comes when the organization wants to maintain a delicate balance between a specific local autonomy and consistent global image.
Conclusion
The polycentric approach has helped propel the organization into global success, but there is an increasing need to maintain this leadership amid competition from different brands. Therefore, the next steps in this case the organization must deepen market penetration through the establishment of a stronger regional presence. Moreover, the organization should improve its content diversification by expanding beyond scripted series and venturing more into reality shows and documentaries. Technological advancement is also a vital issue regarding the organization as Netflix must leverage technological advancements such as virtual realities, among others, to ensure that it exhibits immersive customer experiences. Finally, there is a need to build stronger partnership with local and regional creators. This will help unlock authentic content and solve issues with cultural insights. Lessons learnt from this study is the need to balance between global and local brand consistency as well as the vital nature of agility in responding to different market trends (Goetz, 2016). Finally, the company needs to leverage AI tools for creation to curb the rising cost needs as well as counteract the improving competition.
References
Berardo, R. and Lubell, M. (2016). Understanding What Shapes a Polycentric Governance System. Public Administration Review, 76(5), pp.738–751. doi:https://doi.org/10.1111/puar.12532.
Dopson, S. and Stewart, R. (1990). What is Happening to Middle Management? British Journal of Management, 1(1), pp.3–16. doi:https://doi.org/10.1111/j.1467-8551.1990.tb00151.x.
Goetz, D. (2016). Broadband Mergers and Dynamic Bargaining: An Application to Netflix. SSRN Electronic Journal. doi:https://doi.org/10.2139/ssrn.2847861.
Haddad, F.G. and Dhoest, A. (2021). Netflix speaks Arabic, Arabs speak Netflix: How SVOD is transforming Arabic series screenwriting. Journal of Arab & Muslim Media Research, 14(2), pp.261–280. doi:https://doi.org/10.1386/jammr_00034_1.
Islam, U. and Ali, A. (2017). Determining success factors for effective strategic change: Role of middle managers’ strategic involvement. Serbian Journal of Management, 12(1), pp.29– 40. doi:https://doi.org/10.5937/sjm12-11430.
Ma, Y., Pu, L. and Wang, G. (2021). A Business Analysis for the Taier Company Based on STP Model and Market Forecasting. [online] www.atlantis-press.com. doi:https://doi.org/10.2991/assehr.k.211209.208.
Moore, A. (2019). Netflix’s Generic Strategy, Business Model & Intensive Growth Strategies – Rancord Society. [online] Rancord Society. Available at: https://www.rancord.org/netflix-business-model-generic-strategy-intensive-growth- strategies-competitive-advantage.
Napoli, P.M. (2016). Special Issue Introduction: Big Data and Media Management. International Journal on Media Management, 18(1), pp.1–7. doi:https://doi.org/10.1080/14241277.2016.1185888.
Netflix (2023). Netflix United Kingdom – Watch TV Programmes Online, Watch Films Online. [online] Netflix.com. Available at: https://www.netflix.com.
Onyusheva, I. and Baker, A.S. (2021). Netflix: A Case Study On International Business Strategy Development. The EUrASEANs: journal on global socio- economic dynamics, [online] 6(31), pp.40–52. doi:https://doi.org/10.35678/2539- 5645.31.2021.40-52.
Pilipets, E. (2019). From Netflix Streaming to Netflix and Chill: The (Dis)Connected Body of Serial Binge-Viewer. Social Media + Society, [online] 5(4). doi:https://doi.org/10.1177/2056305119883426.
Shi, Y., & Zhou, J. (2021, October). Analysis of Foreign Video Streaming Service Entering Chinese Streaming Media Market: A Case Study of Netflix. In 2021 International Conference on Public Relations and Social Sciences (ICPRSS 2021) (pp. 337-343). Atlantis Press.
Schäler, R., 2010. Localization and translation. Handbook of translation studies, 1, pp.209-214.
write