Case Study 14 Netflix Historical Financial Analysis.docx -...

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RUNNING HEAD: NETFLIX STRATEGY IN 2018 1 Case Study 14 Part Two Historical Financial Analysis Netflix Strategy in 2018 Brittany Reagan Liberty University BUSI 690
NETFLIX STRATEGY IN 2018 Influence of Finances on Netflix’s Strategic Direction The financial standing of an organization is not just important because it is important to make money in order to succeed as a business, but it is also important because it can influence the direction an organization takes and the strategic choices it makes. Overall, Netflix is in good financial standing. Their ability to adapt to the market and industry changes such as an increase in competitors, expansions in the global market, and creating original content to prevent high costs from licensing has allowed them to stay competitive and successful. When looking at the Netflix’s financial statements it is clear that year over year revenues, incomes, and cash flow has increased dramatically from 2018 to 2019 and then again from 2019 to 2020. Their ability to obtain and expand their brand in other markets outside the saturated North American market has proven to be beneficial. Going forward it will continue to be important for Netflix to expand their subscriber base overseas as the saturated market in North America has leveled out with new subscribers while international subscribers continues to increase. At the same time, debt and expenses have also increased and fluctuated year to year as Netflix branches out into creating their own content and licensing more material. The amount of upfront debt can prove to be a difficulty going forward and puts Netflix in the position of being heavily reliant on their subscribers to create a positive cash flow for the organization. They will need to continue to be consistently aggressive with their tactics to keep a profit margin.

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