The company chosen for analysis is Netflix due to business aspects. Netflix managed to advance as an online streaming company rapidly and managed to beat its competition and became a leading company controlling 88 % share of video streaming of original content. The analysis will give the hint of the products and services Netflix offers that give it that competitive advantage and financial analysis.
Netflix a differentiated customer experience through a vast collection of Netflix originals spanning from movies and TV shows, resulting in the streaming company being top-rated among the millennials. Netflix's pricing strategy is very competitive due to the fixed cost of content production or acquisition, giving the company the ability to offer a low subscription fee (Mandal, Diroma, & Jain, 2017) . Such low charges have increased Netflix's customer base to 193 million subscribers as of now. Such has caused Netflix to rise to $20.2 billion at the close of the financial year, 2020. Moreover, the company's operating margin expanded to 13% in 2019, indicating that the company's profitability is increasing.
Delegate your assignment to our experts and they will do the rest.
For Netflix to decide to offer original content was influenced by YouTube, gaining popularity through video streaming. After the analysis, Netflix realized the consumers were more designed than the actual content. Therefore, Netflix started giving the viewers the original content. The company offered high video quality in various local languages and provide the viewers with a specialized experience through its stream algorithm, which enabled the consumers to receive video recommendations depending on their taste and preferences (Sadq, 2013) . These non-financial aspects caused the company to gain popularity, which eased Netflix's penetration in the global market.
However, to understand the company's financial position, it is crucial to examine the income statement's capital portion. Companies tend to report both the GAAP and non-GAAP revenues, which most of the time need an adjustment to ascertain the non-GAAP Earning-Per-Share. However, Netflix seems to require any adjustment since it subtracts out interests paid on debtors for capital expenditures, interest from invested capital, and taxes.
References
Mandal, G. K., Diroma, F., & Jain, P. R. (2017, August). Netflix: An In-Depth Study of their Proactive & Adaptive Strategies to Drive Growth and Deal with Issues of Net-Neutrality & Digital Equity. IRA International Journal of Management & Social, 8 (2).
Sadq, Z., M. (2013). Analyzing Netflix" s Strategy. International Journal of Science and Research, 4 (3).
