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Introduction to Business 2e

Critical Thinking Case

Introduction to Business 2eCritical Thinking Case

Critical Thinking Case

Netflix's Global Reach

Netflix is a well-known, global streaming service. However, it did not start out that way. Netflix was founded in 1997 as an online DVD-rental service located only in the United States. The company was founded to utilize technology not only to compete with brick-and-mortar movie rental options, but also to change the entire industry. Within just 10 years, technology and internet speeds had increased to the point where the firm saw more potential in the streaming market. Netflix's streaming service as we know it today was launched in 2007.

Moving from the original business model of mailing DVD rentals to offering streaming services gave Netflix the opportunity to expand beyond domestic borders. Canada was the first target, and Netflix began offering subscription streaming services broadly in the country in 2010. Latin America followed in 2011. The concept caught on quickly and grew in popularity. Within a year, Netflix had nearly 3 percent of the Canadian population as subscribers. That grew to nearly 30 percent of English-speaking residents in less than 5 years, accounting for nearly 6 million subscribers. In 2014, the company expanded to the UK, followed by Australia in 2020. Despite this growth in customers, there were issues with content. In the United States, nearly 11,000 unique titles were offered on the platform. However, in Canada, there were less than 2,700. Even as recently as 2019, only around 2.5 percent of the content was local for Australians.

Netflix's phased approach to moving into global markets was guided by pursuing those markets with the greatest potential. They also selected the markets based on consumer preferences, availability of strong internet networks, and the regulatory environment in those countries. Once they entered the global market, competition was considered. After their initial success in Canada, they were more aggressive during the years of 2015–2017 and expanded to about 130 new countries. Since 2017, the company has focused on more steady growth coupled with addressing the localization of the content they provide to subscribers. They have invested in producing local content, acquiring the rights to local movies and shows, collaborating and partnering with local telecommunications providers, and evaluating their plans and pricing models to adjust to the needs of the various markets.

Netflix has more than 230 million subscribers worldwide, with around 75 million located in the United States. The streaming service is now available in 190 countries across the globe.

Critical Thinking Questions
  1. Do you think Netflix's future lies mostly in its international operations? Explain your reasoning.
  2. What types of political, economic, and competitive challenges does Netflix face by operating worldwide?
  3. What are some challenges with the company's aggressive strategy to expand globally to over 100 countries in a short amount of time?
  4. How has Netflix overcome cultural differences to create a world brand?

Sources: Refiloe Batshua Mokgalaka, "Case Study: Netflix's Global Expansion Strategy," LinkedIn, https://www.linkedin.com, March 10, 2025; "Netflix’s International Expansion: Reed Hastings’ Global Strategy," Pressfarm, https://press.farm, October 2, 2025; janeiromediagroup, "The History of Netflix: From DVDs to Streaming Giant," World History Journal, https://worldhistoryjournal.com, July 31, 2025; "From Local to Global: Netflix's Strategic Approach to Worldwide Expansion," The Strategy Institute, https://www.thestrategyinstitute.org, July 18, 2025.

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