BUS 4210 Module 5 Netflix's Think-Global, Act-Local Strategy Example

One Platform, Many Countries: Netflix's Think-Global, Act-Local Strategy

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Bachelor of Science in Business Administration, Thomas Edison State University

BUS-4210: Business Administration Capstone

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Month Day, Year

One Platform, Many Countries: Netflix's Think-Global, Act-Local Strategy

Introduction

Thompson et al. (2018) explain that companies go abroad to reach new customers, achieve lower costs through scale, gain access to resources and spread risk, and that they must then decide how much to standardize across countries and how much to adapt. Netflix, which describes its business as entertaining the world across different countries, cultures, languages and tastes, is an unusually clear case because its service reaches almost every country through a single technology platform. This case analysis examines why Netflix competes internationally, how cross-country differences shape its strategy and which international strategy it follows.

The Scale of International Business

Netflix's revenue rose 16 percent in 2025 to $45.2 billion (Netflix, Inc., 2026). Regional results show where growth comes from.

About 56 percent of revenue came from outside the United States and Canada, and the fastest growth came from Asia-Pacific. The reasons for expanding abroad are plain in these numbers: the home market is mature, and most of the world's potential viewers live elsewhere. Because content costs are largely fixed, each additional member anywhere spreads the cost of a show further, so scale across countries is itself a cost advantage.

Cross-Country Differences

Ghemawat (2001) argued that firms underestimate the cultural, administrative, geographic and economic distance between countries. Netflix faces all four. Cultural distance appears in language and taste, so a catalog built for American viewers attracts fewer members in Seoul or Sao Paulo. Administrative distance shows up in regulation: the European Union's revised audiovisual media rules require that European works make up at least 30 percent of a service's catalog and be given prominence, and several member states add investment obligations and levies to support local film funds. Economic distance appears in income levels, which is why Netflix's paid plans ranged from the equivalent of $1 to $37 a month at the end of 2025. Geographic distance matters least for a streamed product, although data localization and tax rules still vary. Currency adds another difference: 2025 revenue growth was partly offset by unfavorable exchange rates.

Which International Strategy?

The textbook distinguishes a multidomestic, think-local strategy, which adapts products to each country; a global, think-global strategy, which standardizes them; and a transnational strategy, which standardizes where possible and adapts where necessary. Bartlett and Ghoshal (1989) described the transnational form as an attempt to achieve global efficiency, local responsiveness and worldwide learning at once. Netflix fits that description. Its technology, recommendation system, brand and much of its marketing are global. Its content investment, pricing and some features are local: it commissions series and films in many countries, sets prices to local incomes and offers lower-priced plans in some markets. Worldwide learning is visible when a local production finds a global audience, which turns a local investment into a global asset.

Entry and Operations

Netflix enters countries by delivering its service online and building local operations, such as content offices and production partnerships, rather than through licensing or joint ventures for its core service. That approach keeps control of the brand and data but exposes the company to each country's regulations and politics directly, a risk its annual report describes in detail.

Risks and Recommendation

The main risks are regulation that raises local content obligations, currency swings that reduce reported revenue, and local competitors with cheaper offerings. Netflix should continue its transnational approach, with three priorities: invest in local production in the fastest-growing regions, especially Asia-Pacific, where growth was 21 percent; use regional pricing and advertising-supported plans to reach lower-income markets; and treat local content rules as an opportunity by producing European works it would want anyway. The trade-off is cost, since local content requires spending in many markets before it pays off and some productions will not travel.

Local Competition and Partnerships

International competition comes in several forms. Global rivals offer streaming services in many of the same countries, while local services, often owned by domestic broadcasters or telecommunications firms, compete with deep local libraries and bundled subscriptions. Netflix has responded partly through partnerships, for example distributing its service through telecommunications operators' bundles in some markets, which lowers acquisition costs and payment friction. The textbook notes that alliances and partnerships can help a company overcome local disadvantages without full ownership. For Netflix, such partnerships complement rather than replace its direct model, since it keeps control of the customer relationship and data. Advertising-supported plans add another local dimension, because advertising markets, measurement standards and privacy rules differ by country, so building an advertising business abroad requires local sales teams and partners in a way the subscription business did not. That makes advertising a test of how far the transnational model can stretch.

Conclusion

Netflix competes internationally because scale spreads content costs and growth lies abroad. It manages cultural, administrative and economic distance with a transnational strategy: a global platform with local content and prices. Continuing that balance, with emphasis on its fastest-growing regions, fits both the evidence and the textbook's logic.

References

Bartlett, C. A., & Ghoshal, S. (1989). Managing across borders: The transnational solution. Harvard Business School Press.

Ghemawat, P. (2001). Distance still matters: The hard reality of global expansion. Harvard Business Review, 79(8), 137-147.

Netflix, Inc. (2026). Annual report on Form 10-K for the fiscal year ended December 31, 2025. U.S. Securities and Exchange Commission.

Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland, A. J., III. (2018). Crafting and executing strategy: The quest for competitive advantage, concepts and cases (21st ed.). McGraw-Hill Education.