As she did every morning in the last month since she became the CEO of Hoola – an online streaming services, Elaine Hopkins got comfortable in the back seat of the Limo that picked her up for the 45 minutes ride to her office in Manhattan. She picked up the WSJ and skimmed over it, trying to decide which article she will focus during the ride. This morning the selection was easy. Her focus turned very quickly to another story about Netflix effort to expand their business in Europe and in particular France. This was a fifth or sixth article she came across this month about the global expansion efforts of the two giants in the industry Netflix and Amazon. It was very clear that he online streaming is going global.
Hoola, was ranked a far third behind these giants and she was well aware that she was brought in from Disney to try to catch up to these giants and become # 3 in this industry. She recalled that she had discussions with her management team, in the last few weeks, about the potential risk and reward of expanding Hoola Streaming services globally. However, she didn’t push it further. Now reading this article, it became very clear to her that to stay competitive and grow, Hoola must act quickly and swiftly to expand globally. “It is time for us to be bold in our global expansion.” She started to form some bold ideas that she wanted to share with her top team. She called her secretary and asked her to assemble the team in 30 minutes for an important meeting.
As she entered the conference room all the top managers were there, and she could hear them all discussion the WSJ article about Netflix. Without wasting any time, she presented her newly formed idea: “I would like us to move quickly to expand globally. I would like to be very bold but avoid head-to-head competition with Netflix and or Amazon. Thus, my idea is to divide the world to 7 regions. In each region we will include potential markets to expand. However, these markets should be the smaller and less attractive to the big giants (Netflix, Amazon), but big enough for us. In the next 5 years I would like to expand each simultaneously to four 3 new emerging and less developed international markets. However, each of the markets must be in a different geographic region, as I want to have a foothold in different regions.
After some discussions and brainstorming, she could sense the very strong support and the excitement among the team members. Mike, the VP for international operation agreed to lead this ambitious project. He suggested that because Hoola doesn’t have the expertise in the various global regions, he will identify, and hire immediately 4 consulting firms with expertise in the various regions. Each consulting firm will investigate one region, IN THIS CASE OUR REGION IS AFRICA, and the countries/ markets are NIGERIA, GHANA, KENYA, TANZANIA, ANGOLA and ETHIOPIA and will rank the 5 best potential markets in each region and will ask to recommend one country in that region for an immediate expansion.
There was some discussion which consulting firms to hire. The decision was to look for consulting firms that might not be familiar with the product and the industry (they will have to learn fast with the help of people an expert in Amaze), but rather companies that have expertise and knowledge about the region they need to investigate.
That is where your team comes in. Your team conducted in the past many projects for companies trying to expand to_____ region AFRICA. Thus, your team got the assignment!
Congratulations, but no time to celebrate. Your team must start to work to meet the noticeably short deadline.
A. Summary of the region global environment.
B. Global Business/industry analysis and background
-What is the state of the industry (size, growth rate, competition level….)
-Analysis of the business model of the MNE (which products/services does it sell.
– How does it organize its international operations?
– Which approach it takes (Ethnocentric…. Geocentric)?
– Why should it expand globally? (pull and push factors) Is brand image important.
– What is the source of its competitive advantage? etc.).
(use various tools here 5 forces, VRIO….)
B. The first step of filtering the possible countries (macro factors)
Identify the country characteristics (macro factors) you used to filter explain why these factors and the process you went through.
EXAMPLE
An Industry on a globalk expansion spree (examples)
Netflix Expands Across Europe
ByRani Molla
Web domination isn’t easy. European regulators, politicians and domestic businesses have increasingly butted heads with U.S. Web giants over issues like privacy, taxes and competition law. For video streaming service Netflix , expanding across Europe has required a bit of finesse.
Netflix plans to add tens of millions of new households to its subscribers as it begins service in six more European countries this month, including Germany and France. Netflix’s European expansion began with Ireland and the U.K. in 2012, followed by Nordic countries and the Netherlands. Below is a map and timeline of Netflix’s European expansion.
France and Germany are set to be particularly big markets for Netflix, according to data from SNL Kagan, which estimates the company will have 29.9 million broadband households in Germany and 25.3 million in France in 2014. To give context, Netflix had 35 million paid customers in the U.S. as of its last quarterly filings ending June 30.
To combat European wariness, Netflix had to make a number of concessions, according to WSJ’s Sam Schechner:
To soothe Continental nerves, the company so far has pursued a strategy of engagement. For more than nine months, it has been meeting regulators, privacy officials and other policy makers across the region. It started licensing talks with a thicket of producers and copyright unions that control rights. In June, Netflix flew a contingent of reporters from France, Germany and Belgium to the company’s LosGatos, Calif., headquarters for interviews and office tours.
The company in June also moved into new European headquarters in Amsterdam.New hires have expanded the office—which is splashed with images of Netflix shows—to more than a dozen people, including General Counsel David Hyman, who moved his family to Europe for a yearlong stint.
In France, which has one of the world’s biggest government-enforced systems to promote film and TV production, the case was even harder to make for Netflix.
The company responded in meetings to address what it called misconceptions. Executives said Netflix has helped build audiences for domestic content. They also told officials that the company voluntarily would adhere to the so-called French film chronology, which says that Netflix-like services can only show films three years after they come out in theaters—an easy concession for a business that carries mostly old movies. By spring, Netflix had started approaching French producers about making a local TV show, too.
“They understood that it was something they needed to do to seduce the French market,” said producer Pascal Breton, whose company will produce for Netflix an eight-episode political series, “Marseille,” set in the French port town. Shooting in English “wasn’t even up for discussion,” Mr. Breton said.
Major expansion coming to Hulu when Disney buys Fox
Eric Abent – Nov 9, 2018, 2:08 pm CST
Disney’s acquisition of Fox could mean big things for Hulu, not just in terms of content, but also in terms of availability. Unlike Netflix, Hulu is a streaming service that’s only available in the United States. When Disney’s acquisition of Fox finishes up next year, it’ll take a controlling stake in Hulu, and it may look to expand Hulu’s availability as a result.
Disney CEO Bob Iger reveal his company’s intention for Hulu in a recent call with investors. The call took place after Disney delivered its full year and Q4 financials for fiscal year 2018. Iger noted that once Disney owns Fox, it’ll control a 60% stake in Hulu, a company that has traditionally been split between multiple partners with no one company having a controlling stake. Once Disney combines its 30% stake with Fox’s 30%, it’ll leave Comcast with another 30% and AT&T with 10%.
Iger said during the call that even though Disney will have a controlling stake, the decisions it makes will be made with the consideration of Comcast and AT&T in mind. Beyond that, though, Iger is looking to grow Hulu’s subscriber base, and one way to do that would be to roll out the service internationally.
What an international version of Hulu would look like is a little unclear. Licensing issues would probably be a chief concern with an international roll out, but at the very least, Hulu would be able to offer its original programming to viewers in other regions. Iger also suggested that Disney thinks there could be some “elasticity” in the price Hulu charges monthly subscribers, so don’t be surprised if you see the amount you pay go up once Fox is part of Disney’s portfolio.
Even with Disney+ on the horizon, Disney wants to keep building up Hulu’s library – especially its original content offerings – separately. It’s clear that Iger envisions a future where Hulu and Disney+ exist side-by-side, so it’ll be interesting to see how it manages both services.
Whatever changes or expansion Disney would make to Hulu are still at least a little while off. Disney isn’t expecting its acquisition of Fox to close until sometime in 2019 – though it’s already received approval from regulators here in the US and in Europe, it still needs approval from other regions around the world. We’ll see what happens from here, but it may not be long before Hulu is available outside of the US. Stay tuned.
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