Using the Company you work with or Company of your choice as an

example, apply the process of Thirteen Forces Analysis.

The thirteen forces analysis are the forces or factors which has a direct

impact on the operations of a business, these forces shape every industry and

helps determine an industry's weaknesses and strengths. The thirteen forces

analysis is comprised of Porter’s Five Forces which are suppliers, buyers,

substitutions, potential entrants, and rivalry among firms plus the other eight

macro-environmental factors that can influence a product, brand, business, and

location namely, social, technological, economic, environmental, political, legal,

ethical, and demographic factors.

Moreover, the thirteen forces analysis determine if the business is

impeding or improving, with this knowledge business owners can make strategic

and smarter business decisions. For instance, let’s apply the process of thirteen

forces analysis into a certain company in order to clearly understand how such

forces affect the operations of a business. Netflix for example which is a popular

company that offers video streaming subscription service that allows clients to

search their catalogue of TV shows and movies to watch that they want, when

they want to watch it, in the comfort of their own home.

The five forces of Michael Porter is frequently used to identify an industry's

structure to determine corporate strategy. First is the threat of new entrants, the

main USP for any streaming platform is the content. The cost of creating or

licensing any new programming is high, and so are the risks involved. Also,
Netflix, a top platform, is in a unique position to negotiate with the creators, an

advantage a new entrant will not.

Second is the threat of substitutes, Theatres are the main alternative for

streaming movies and TV shows followed by DVD rentals. Social Media and

Gaming are also shaping into tough contenders to Watching Movies. These

potential substitutes are major risks for Netflix in maintaining and expanding their

audience all over the world. In addition, Deloitte's 2021 Digital Media Trends

survey says that Genz prefers listening to music, Social Media and video games

while watching movies is still the favourite for older generations.

Next is the bargaining power of customers; Netflix's revenue is primarily

dependent on the number of monthly subscribers, At the end of every month,

each consumer has the freedom to discontinue the service without any

consequence. The availability of multiple other sources of entertainment

increases the power of customers.In this sense, Netflix is fighting this by

providing unique content through Netflix Originals like "Stranger Things" and

"Money Heist".

The fourth force is the bargaining power of suppliers, Netflix acquires

content through multiple ways, licensing old content, producing new TV shows or

acquiring exclusive distribution rights to shows produced by 3rd parties. These

methods are the main sources of Netflix in achieving the best possible streaming

service that can offer to the market. Even more, Netflix reaches the customers

through many internet-connected devices, including Smart TVs, TV set-top

boxes, streaming devices like firestick and mobile devices.

Video, Disney plus and HBO Max plus are the major competitors, and each has

over 100 million subscribers. Consumers switch between subscriptions each

month, based on the content they are interested in. The lack of switching costs

increases rivalry.

Furthermore, the other eight macro-environmental factors that may affect

Netflix with its operations are; social factors, which describes the location of

customers, cultural deals, and values. Unemployment, wage rates, taxation,

inflation and interest rates are economic factors that affect the viewership of

Netflix. Next is technological factors, Since, Netflix is an online based app so

technology plays an important role for them. Trademark copy right, patent and

other intellectual property right are important for Netflix. They need to constantly

have intellectual rights update from third party to stream their content. Next is

economic factors, the Over-the-top (OTT) industry have grown a lot during the

past 2 years from the start of Pandemic and there are more than 100 OTT

platforms out of which major revenue share is occupied by Netflix having 29%

market share. Currently, Netflix is at booming stage. With high GDP growth rate

the demand for Netflix market will increase as we can see the trend. Then the

environmental factors, With growing concern regarding environment and

sustainability environment factor become an important aspect of PESTEL

Analysis. Since Netflix is a company, whose business is completely online and

they don’t have direct impact on the environment still they do their best to protect

the environment. To protect the environment Netflix tries to use renewable

available in every country. China the biggest economy we know doesn’t allow

Netflix to operate because of US policies. So, because of these restrictions in

various countries by USA, Netflix has many untapped market. Also, there is

censorship on some of the content shown on Netflix so some countries don’t

allow it to screen. Further in EU Nations the tax rate applicable to Netflix is quite

high which is also a threat for the company. The sixth macro-environmental

factor is legal factors, before entering into any new market, policies of the

government are important to look into as it affects the business. Copyright issues

is the major area in which Netflix can suffer problem. So to safeguard themselves

they should have proper licensing for the series and movies being shown. The

next one is the ethical factors, ethical factors of Netflix company lies on the

content of their service. They have movies and TV shows that are only advisable

for adults and not for young age, guidance to young audience is also practicing

by Netflix, also respecting the culture and values of every people and country.

Lastly is the demographic factors, Netflix is markedly more popular with younger

consumers in the United States than among older generations according to a

survey held in August 2021, with 75 percent of 18 to 34-year-olds and 72 percent

of 35 to 44-year-olds saying that they had a current Netflix subscription,

compared to just 44 percent of those aged 65 or above.

In general, the thirteen forces analysis are key indicator of a successful

company. Netflix as an example can continue its reign from being the most
successful streaming company if the thirteen forces analysis are properly

applied.

References

(1) Gordon Scott, (2020)

(2) MBA Skool Team, (2022)

(3) https://www.tcl.com/au/en/what-is-netflix.html

(4) https://www.mbaskool.com/pestle-analysis/companies/18258-netflix.html