Tag Archives: environment scan

Netflix in Africa

Netflix seems to be in a stage of constant product development, as well as market development. While it originally started as a U.S.-based service, the company has moved aggressively into new geographies and now streams its programs in 190 countries and territories. The company now serves more than 100 million subscribers outside of the U. S.

ix has a complex business model in that it must secure content agreements by region and country. Regulatory restrictions also limit what content can be made available. Also, many international viewers are not fluent in English and prefer local-language programming. Such is the case in sub-Saharan Africa where Netflix is producing original content. The region has 1.1 billion citizens and is a largely untapped market. Streaming in Africa is estimated to grow from 3.9 million subscribers in 2020 to 13 million in 2025.

While Netflix is investing in African programming, it faces challenges in piracy, expensive mobile data, slow Internet speed, and a high rate of poverty. There is also plenty of competition in the market from both local and global providers. Pricing and sales requiring U.S. currency are issues as well. Netflix is testing a mobile-only subscription at $4.03 per month (59 South African rand).

Ready to watch?

Group Activities and Discussion Questions:

  1. Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
  2. Which strategy is Netflix using? Why?
  3. Show video on Netflix global expansion: https://youtu.be/JdtnX_P-4Qc
  4. Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market Netflix.
  5. Discuss how to build and use a SWOT analysis grid: strengths, weaknesses, opportunities, and threats (internal and external factors).
  6. Divide students into teams and have each team build a SWOT analysis grid.
    1. Strengths: what is company good at?
    2. Weaknesses: what needs work?
    3. Opportunities: what is going on in marketplace?
    4. Threats: what should company be wary of?
  7. Based on the analysis, what are the issues and risks that might occur?

Source:  Wall Street Journal; other news sources

 

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Google Acquires Fitbit

Acquisitions can be tricky. Companies need to assess what markets to enter, and which products and services are needed for those markets. While it is common for food and beverage companies to use acquisitions to gain market share, it can be a tad trickier when combining technology companies. A key consideration is that companies find synergies that can be capitalized on when combining organizations.

A recent acquisition of interest is the purchase of fitness tracker pioneer Fitbit by search engine giant Google for an estimated $2.1 billion. The acquisition moves Google into a better position in the wearable technology market and gives Fitbit access to more resources, technology, and marketing. (However, there are still some outstanding issues with government regulators; use by Google of Fitbit data for advertising purposes is a concerns to regulators.)

Fitbit is a familiar company to most college students. Founded in 2007, the company makes watches and bracelets to track health information; it has an estimated 20 million active users. New Fitbit products include Fitbit Stress, featuring stress management tools and an ECG app to assess heart rhythm. Fitbit’s products are carried in 39,000 retail stores in 100 countries. Annual revenue in 2009 was $1.4 billion.

Fitbit’s overall market share has decreased dramatically since the introduction of Apple Smartwatch. Its market share of 4.7% is significantly lower than the market leader Apple at 31.7%, followed by Xiaomi and Huawei.

How do you track your fitness?

Group Activities and Discussion Questions:

  1. Discuss the four key marketing strategies: product development, market development, market penetration, and diversification.
  2. Discuss diversifications/acquisitions as a marketing strategy. When is this effective? When is it not effective?
  3. Show Fitbit’s Web site and products: https://www.fitbit.com/global/us/home
  4. Show Google’s products’ Web site: https://about.google/intl/en_us/products/
  5. Do these two companies complement each other? If so, now?
  6. Divide students into teams. Have each team develop a promotional plan that the companies can use to promote their combined value to customers.

Source: Associated Press; CNN News; Wall Street Journal; other sources

 

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The Brief Life of Quibi

Did you ever use Quibi? Do you even know what service Quibi provides? If your answer is “no” to either of these questions, then you are likely among one of the many reasons the video service shut down after only six months.

Quibi was developed as a streaming video app from Hollywood studio executives and offered entertainment and news in 5-10 minute lengths. It launched in April 2020 with the intent on challenging the streaming players. Quibi (which stands for “quick bites”) was designed for short viewing times in the “in-between moments” of life.

While the pandemic caused a number of issues for the company (since we were all now at home with devices, instead of on the move), it was only one of a series of missteps. Viewers couldn’t connect Quibi to their at-home TV, could not share programming, and had limited videos from which to choose. Quibi also had a lot of competition, including free services from YouTube and other platforms. Advertisers were also underwhelmed and experienced difficulties.

Although the app was downloaded an estimated 9.6 million times, and an estimated 90% of viewers left after the free trial period. The monthly service cost $4.99/month with included ads, or $7.99/month without ads. That’s not a bad price, but viewers saw it as one more monthly service to add on top of current streaming services from Amazon, Netflix, Apple, Disney+, and more.

Bye, Quibi.

Group Activities and Discussion Questions:

  1. Poll students: Who knows what Quibi did? Who used the service? Who subscribed beyond the free trial?
  2. Show Quibi’s site (it may not last long): https://quibi.com/
  3. News video of Quibi’s demise: https://youtu.be/tEfx_MxEXq4
  4. Discuss the components of an environmental scan: technology, social, competition, regulatory, and economic factors.
  5. Divide students into team. Have each team do a brief analysis of Quibi and the environment and develop a SWOT analysis.
  6. Discuss the stages in the product life cycle.
  7. Draw a product life cycle on the board and discuss the stages and marketing objective. What did Quibi’s PLC look like?

Source: AdWeek; New York Times; The Verge; Wall Street Journal; other news sources

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