Abstract Science Construction’s business is in planning, developing and building road projects. The major of its clients are municipalities, city governments, and other public sector entities. While the bankruptcy rates for these clients is very low, when economic downturns happen, their ability to pay in a timely fashion also suffers. This leads to businesses such as Science Construction needing to take on additional debt and to find creative methods in order to stay afloat during times of recession. Methods such as selling accounts receivables at discounted rates and taking larger lines of credit through banks and other lending institutions are some of the ways organizations can remain viable when their cash inflows have turned into a trickle. Science Construction is asking the Turkish Courts to postpone their bankruptcy proceedings for a year while they attempt to restructure. Through this, suggestions such as forcing shareholders to pay their debt to the organization, gaining credi...
Netflix was founded in 1997 when the online movie rental was skyrocketing, becoming the world's largest and most influential film supplier. It was able to achieve this position through its interest in technology research and innovation to enhance its customers.
Netflix’s main objective was to provide a DVD rental service and delivery mail order to its customers through the Internet by providing an enormous library of movies and series, and then it provides a high-definition video through the video streaming (Madrigal, 2014). Since its inception, it has a large share of the market despite the presence of many competitors as it puts the customer as the primary priority and introduces some competitive advantages, which include:
- Netflix’s prices are relatively low. It reduces the monthly subscription with a variety of plans to create more options for the customers, which leads to an increase in the number of customers by attracting that of competitors.
- Netflix has no returning dates for the DVD and doesn’t charge any late fees (Noren, 2013).
- Netflix provides Cinematch program. This program makes a list of the proposed films for each subscriber as a result of collecting data from the subscribers’ profiles, rental history of the movies and their evaluation. It makes it easier for the customers to choose the movies they want to watch and also helps Netflix to maximize the benefit of its diverse library.
- Netflix provides the latest movies and series. It has sharing contracts with most of the studios and the distributors whereby it pays part of the subscription fees for a period of time for getting the original movies and series at a large discount.
Netflix invests its profits in the research and technology development in order to meet the customers’ demands and convenience. Initially, it switched watching movies from DVD to online by providing high-quality broadcasts. After that, it provided its customer the choice to watch movies on their TV or their smartphones directly. This technology provides the customers with the desired and enjoyable entertainment platform without paying any additional fees or having any troubles.
Clayton Christensen introduced the term disruptive innovation in his book “The Innovator's Dilemma”, which he defined it as an innovation that creates a new market by discovering new categories of customers and eliminating the current market (McAlone, 2015). Disruptive innovation changes the supply value in the market. When it appears for the first time, offers in most cases are made less in performance in light of the prevailing trends that customers are interested in. When the disruptive technology is deployed, the customer’s values that influence his choices begin to change where the price, the quality, the ease of use and the availability of the product are the dominant values affecting his choices. So, customer’s needs gradually change until new choices replace the old ones (Moorhead, n.d.).
Netflix offers an added value to its customers for the low monthly subscription. Initially, it provides watching videos on the computers without the need of either a DVD or hard drives for the digital downloads and then it turned to TV streaming service (Hutton, 2017). Thus, this reduces DVD usage and eliminates the delivery costs.
Conclusion
Netflix’s business strategy is characterized by innovation and research flexibility. This strategy drives Netflix towards excellence and superiority over its competitors and thus continues to be at the forefront of video broadcasting, but at the same time, it has to pursue research and development to maintain that leadership.
References
Hutton, Laura. (2017). Why Netflix Is The Ultimate Digital Disruptor? Australian Institute of Business. July 3, 2017. Retrieved from: https://www.aib.edu.au/blog/innovate/netflix-digital-disrupter/
Madrigal, A. C. (2014). How Netflix Reverse Engineered Hollywood. Retrieved from: http://www.theatlantic.com/technology/archive/2014/01/how-netflix-reverse-engineered-hollywood/282679/
McAlone, Nathan. (2015). The father of 'disruption' theory explains why Netflix is the perfect example — and Uber isn't. Business Insider. November 18, 2015. Retrieved from: https://www.businessinsider.com/the-father-of-disruption-theory-explains-why-netflix-is-the-perfect-example-and-uber-isnt-2015-11
Moorhead, Emily. (n.d.). What Is Disruptive Innovation and Why Is It So Important? Retrieved from: https://www.allbusiness.com/disruptive-innovation-103500-1.html
Noren, E. (2013). Digital Business Models: Analysis of the Netflix Business Model. Retrieved from: https://web.archive.org/web/20170407030229/http:/www.digitalbusinessmodelguru.com/2013/01/analysis-of-netflix-business-model.html
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