Social Network Strategy Of Netflix Essay


Do Business Reseach on Advantages and Disadvantages of Using Social Network in your chosen Organisation.



The companies are becoming smarter each day by using the latest technologies into the business for performing day-to-day operations. As per Heidemann, Klier and Probst (2012), a large number of enterprises rely on the internet and other online based technologies for performing business functions such as communication, recruitment and selection, promotion of products or services, market research, expansion of business and others. Increasing number of internet users fuelled the popularity of social networks between enterprises. Along with people, organisations use social media sites as well for interacting with their customers and promoting their products. Most corporations implement a social media strategy in their business in order to use these platforms for business effectiveness. The use of social networks in business provides numerous advantages to enterprises due to which its users are proliferating such as effective tool for business communication, global marketing tool, market insight and research tool, recruitment and selection platform, and tool for expanding business overseas. The corporations which develop an effective social media strategy are able to generate a competitive advantage over their competitors (Zaglia, 2013). However, there are risks associated with the use of social networks in business as well due to its several disadvantages such as vulnerability to cyber-attacks, insider threats, online bullying, negative marketing and requirement of continuous monitoring. In this report, an example of Netflix will be analysed to understand how the corporation uses social networks in business. Furthermore, various advantages and disadvantages of social networks will be discussed in the report from the perspective of Netflix and other enterprises to understand their importance

Project Objective

Following are the objectives of this report:

  • Firstly, the goal of this report is to understand how corporations use social networks in their business by evaluating the example of Netflix and other corporations.
  • The objective of this report is to evaluate different advantages and disadvantages of the use of social networks in business and analyse how they affect Netflix and other enterprises.

Project Scope

The scope of this report is wide which include analysis of advantages and disadvantages of social networks in business. This report will analyse the social network strategy of Netflix but its scope is not limited to Netflix and examples of various other companies will be included in the report as well.

Literature Review

Along with the number of online users, the popularity of social networks has increased substantially. As per Turban et al. (2017), social networks are dedicated websites and applications which provide their users a platform to communicate with each other across the globe by posting pictures, videos, comment, messages and other information. Currently, there are over 4.021 billion internet users globally from which over 3.196 billion uses social media sites actively (Kemp, 2018) (Figure 1). Along with people, enterprises use social media sites such as Facebook, Instagram, and Twitter for various business purposes. Organisations use social networks because they can access a large number of people by using such websites and interact with their audience. Many companies have gained a competitive advantage by using effective social network strategy in their business. Netflix is one of the corporations which use social networks for performing various business functions which result in increasing its profitability. The company operates in the entertainment industry and offers on-demand video facility to its customers. Netflix offers its services in more than 190 countries, and it has dominated the online streaming industry with over 125 million subscribers (Statista, 2018a) (Figure 2). According to Adhikari et al. (2012), the corporations become successful with the popularity of the internet and social media sites because people prefer to use their smartphone to consume their media. Most of the users are millennial who prefers online content over traditional sources. Therefore, the number of companies which develop a social network strategy is increasing because it provides them a competitive advantage.

The use social networks provide different advantages to corporations which assist them in increasing their profitability and positively influence their brand reputation. As per Aral, Dellarocas and Godes (2013), one of the biggest advantages of social network is that it provides an effective and low-cost marketing tool to enterprises. There are over 3.196 billion social media users who actively check their social media feeds which provide an opportunity for advertising to a wider audience (Figure 1). Social media sites such as Facebook, YouTube and Twitter generate a lot of money by showing advertisements to their users. In 2017, Facebook generated US$39,942 million from advertising revenue which is a substantial increase from 2016 revenue (US$26,885 million) (Statista, 2018b). In just nine years, the advertising revenue of Facebook has increased from US$764 million to US$39,942 million which shows how more and more organisations are using these platforms for promoting their products (Figure 3). Furthermore, social media sites are free for its users and corporations can easily create their accounts on different websites. After that people can easily follow the brand that they like or follow. It resulted in creating an online media customer base for the enterprise that is genuinely interested in or uses the products or services of the companies. After that, the corporation can use the online platform to share important information with customers and resolve the queries of customers. Garrigos, Alcami and Ribera (2012) stated that the corporations could also use this platform to directly promote their products or services to users who are interested in their products. Netflix effectively uses its social media accounts as well; the company has over 46 million followers on Facebook, 7.7 million on Instagram, 5.01 million on Twitter and 3.5 million on YouTube. The company use online websites to promote its content and share information about their upcoming content.

Furthermore, the company uses its social media accounts to share their own and users comments or posts which positively affect their brand image. According to Griffith (2015), ‘Netflix and chill’ is a popular term which is used by people all around the world which was promoted by Netflix itself since it results in increasing its customer base. Another advantage of use of social networks in business is that they are effective communication tools. The companies can use social media sites to communicate with their customers and employees. By using social media sites, companies can communicate directly with people across the globe and share information with them. Matrix (2014) provided that Netflix uses its social media accounts to post information and interact with its customers that create a positive reputation of the company. Moreover, users are able to share the feedback or experience about Netflix services directly to the company and get a response as well. Organisations use social networks for business communications as well. They use the platform to communicate with branches and business which are situated overseas along with in-house communications. In case of Netflix, the company has implemented a market strategy by using a unique brand voice. Other brands play it safe on social media sites whereas Netflix differentiates itself by engaging in a diverse way with its online media. Gomez-Uribe and Hunt (2016) stated that it shares different posts with online users that demonstrate its unique style of communication which separates it from the rest. Furthermore, the company use social networks for communicating at the workplace and between different branches.

Employees use social networks to communicate at the workplace because it is an efficient way of communication. As per Zhang and Venkatesh (2013), social media sites connect people across the world; therefore, it is an effective tool for human resource department to hire talented employees from all across the globe. People from all over the world can send their job application to corporations, and the human resource department can evaluate them based on their qualifications. Furthermore, the human resource department can use social media sites to interview potential job applicant directly through social networks such as Google Hangouts, Facebook messengers, Skype or others. It saves time and resources of companies, and it also enables companies to hire talented employees from worldwide. Social media sites such as LinkedIn are used by organisations to meet and communicate with people from all across the globe regarding recruitment and selection. The site is also used by enterprises to share relevant content with others, and professionals share their thoughts as well. As per Bolton et al. (2013), Netflix has established its branches in different countries, and it hires employees through social media websites in order to ensure that it hire talented employees who work in the industry. Social networks are large platforms in which people share a large quantity of personal data. This data is important for organisations since it allows them to create effective business strategies based on the requirement of their customers.

According to Lipsman et al. (2012), organisations use social media sites for conducting research on customers and gaining market insights which allow them to create business strategies that are customised as per customer demands. Moreover, social media sites such as Facebook and Twitter allows its users to post polls on their feeds in which anyone can enter their vote. Organisations can use these polls to ask simple but effective questions for their customers which allow the top level management to take future business decisions. In case of Netflix, the company invest heavily in market research to collect crucial data regarding its customers watching habits. The company uses this information in two ways. As per Jenner (2016), it uses the information to provide recommendations to its users based on their linking over their application and social media sites which encourage users to check out the services of the company. Furthermore, it uses the information to learn about people’s likes and dislikes and invest in creating original content which is based on the preference of a significant number of people. It assists Netflix is becoming the market leader in the online content streaming industry and satisfying the demand of over 125 million subscribers.

While using social networks in business, enterprises face many difficulties along with benefits. There are many disadvantages of social networks which resulted in increasing challenges for enterprises. One of the biggest disadvantages of social networks is online bullying. Social media sites are open for everyone, and they can easily create a free account which means that along with people who like products or services of a company, individuals who dislike them can share their feedback as well. According to the study of Milosevic (2016), the attacks of online bullying on corporations have increased with the popularity of social media sites. While using social media sites, companies face genuine criticism from people however it is a large platform, and people who dislike their offerings also use it for online bullying. People are able to hide their identity online by creating a fake account easily, and they use it for bullying corporations on social media sites (Milosevic, 2016). Castronovo and Huang (2012) provided that large enterprises are able to sustain online hate; however, in case of small businesses, social media users use harsh language and inappropriate content to bully organisations. Furthermore, the content of companies which is available on social media sites is available for people across the globe, and they receive hate or negative feedback from worldwide. A good example is the latest advertisement posted by PepsiCo on social media sites. In the advert, it was shown that people could solve significant issues such as police brutality by giving Pepsi soft drink to each other. The advertisement did not receive positive feedback on social media sites, and people started bullying and boycotting the products of PepsiCo due to which the company has to remove the advertisement which shows the power of online bullying on social media sites (Channick, 2017).

Another disadvantage of the use of social networks is increasing the vulnerability of cyber-attacks. The companies which use social media sites face the risk of cyber-attacks along with people. According to Saini, Rao and Panda (2012), social media sites encourage users to share their personal information online which can be accessed by a third party and used for gaining unfair means. The number of cyber-attacks on organisations has increased in the past few years as the use of social networks increase in business. There are a number of incidents in which corporations suffer substantial financial losses due to use of social media sites. Netflix’s entire system is based on online-based services, and cyber criminals try to hack into its system for data breach. In 2017, Netflix faced a cyber-attack in which cyber criminals leaked the shows of its hit TV series called Orange is the New Black online (Perlroth and Haag, 2017). The same year, Sony PlayStation’s Facebook and Twitter account were hacked by OurMine, a hacking group (Money Control, 2017). The group also hacked the Twitter account of HBO, and they were also involved in the leaking of its popular series, Game of Thrones (Kelly, 2017). These examples show that not online small or medium by large enterprises also face the risk of cyber-attacks while using social networks.

Organisations which use social media marketing also face a risk of negative market which can negatively affect their profitability. For example, Wal-Mart launched a ‘fat girl costumes’ section around Halloween in their online shopping categories which quickly become viral on social media sites (Ahmed, 2014). The company receives a ton of hate from users who blame the brand for being disrespectful. Another example United Airlines; in 2017, a video of a man forcibly dragged off a place become viral due to which the popularity of United Airlines dropped, and it negatively affected the profitability of the company because many people boycotted the airline (Thompson, 2017). It shows how mistakes of social media sites can negatively affect the brand image of a company. The social media account of corporations is handled by its employees which increases the risk of insider threat. Studies have shown over 60 percent of the cyber-attacks are caused due to insider threat which means that employees either intentionally or unintentionally give access to cyber criminals into their servers (Hummer, 2016) (Figure 4). In case of use of social media sites, the risk of the insider threat is bigger because companies use them as a tool for interacting with their customers and mistakes of a single employee can negatively affect the reputation of the enterprise. Therefore, while using social networks in business, enterprises have to monitor the work of their employees continuously. As per Kumar et al. (2013), social media sites are 24/7 and customers from all over the world interact with corporations, therefore, companies are required to hire employees who interact and resolve queries of customers over social media sites which result in increasing their expenses. In order to use social networks in business, companies are required to develop clear strategies which address the issues face by them and focus on improving their brand reputation.


Thus, the above-stated observations show that the role of social network strategy has increased between enterprises and companies such as Netflix develops strategies for effectively using them to generate and maintain a competitive advantage. The use of social networks has increased due to the growing number of social media users and internet-based services because it provides new business opportunities and market expansion options to enterprises. Organisations use social media sites due to its numerous advantages such as global marketing tool, recruitment and selection platform, effective tool for business communication, tool for expanding business overseas, and market insight and research tool. These advantages allow enterprises to generate and maintain a competitive advantage in the industry which expand their market base and profit opportunities. However, companies face many challenges while using social network strategy due to its several disadvantages such as online bullying, insider threats, vulnerability to cyber-attacks, continuous monitoring, and negative marketing. Therefore, companies should carefully assess different difficulties and limitations of social networks before using them for performing business functions. They should develop clear strategies for using social media sites based on which they can generate and maintain a competitive advantage in the industry


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