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’s strategy is growth, accepting newcomers as quickly as possible. Netflix aims to spend money which it does not have and grow its business. So far, it has worked for Netflix, attracting thousands of new customers, rivaling other streaming businesses (Ovide, 2019). Netflix made good use of technology and information systems to grow its business faster than its competitors. In this write-up, I will discuss how Netflix kept itself relevant and became a success story.
Part 1
Netflix was able to gain a competitive advantage over its chief rival Blockbuster. Discuss the Netflix value proposition and how it successfully gained and advantage over Blockbuster.
The founders of Netflix were able to look at their business as outsiders and determine what the customers want and prefer. That is what made Netflix unique. The subscription model was a business innovation for a movie industry based on which Netflix grow exponentially.
Table 1. shows the value Propositions of Netflix
Value Propositions
Explanation
Affordable Price
Netflix has a larger subscription than Blockbuster. That is why it is able to offer at a cheaper price.
Accessibility
Anyone, anywhere in the world can access Netflix content on any device (mobile, laptop, tablets…etc).
Digital Solutions
From CDs and DVDs and then going online, Netflix innovated how we view movies.
Better Encoding and Streaming
Netflix encoding software is able to compress large files so that persons with low bandwidth and internet data can watch Netflix content for hours
Original Content
The contents are original meaning Netflix creates many of those contents and are of high quality.
(Business Model Inc, n, d)
Part 2
Identify and describe some of the technology innovations that Netflix was able to exploit and how these innovations contributed to competitive advantage.
I am now going to list below some of the innovations brought about by Netflix which gave its competitive advantage. Other competitors could not keep up with Netflix innovations, thus left behind in streaming industry.
Table 2. shows the Netflix timeline and the Innovation milestones
Year of Innovation
Technology/Innovations
1997
Netflix Startup, DVD rentals
1999
Subscriber Model introduced
2000
Queuing model introduced
2006
Netflix Video Recommendation algorithm introduced
2007
Online video streaming made available
2011
First Netflix Original content was made available
2011
Expansion outside of US and Canada
2013
Binge watching introduced
2015
Netflix and chill – that allows viewers to watch ad-free programs, and enables producers to create contents that are not confined to 30/60 minute timeframe.
2016
Blocking VPNs to protect copyrights and international laws
(Le VPN, 2018)
Along with these innovations, Netflix also has developed its own encoding softwares to compress high-quality large movie files so that viewers can watch contents without worrying about the data plan. These innovations were cost effective and differentiated its business from other competitors. Thus, Netflix enjoys a supreme competitive advantage over its rivals.
Part 3
Using the LIRC and the internet, research the concept of “disruptive innovation” and then discuss how Netflix fits the model of disruptive innovation. Consider what role technology played in achieving the disruptive innovation that provided Netflix with a competitive advantage.
Disruptive innovation is one where a product or service is initially is at the bottom of a market and eventually grows big to displace or eliminate the established competitors (Christensen, n, d). Netflix and its impressive growth fit that model of disruptive innovation. It changed the way viewers experience watching movies.
Table 3. shows the technological innovations and Netflix’s Smart Moves
Disruptive Innovations
The role of Technology
Netflix – DVD rentals
Transition from VHS tapes to CDs and DVDs made possible by Optical storage technology
Subscriber and Queuing models
Database and analytics softwares made this possible.
Video Recommendation algorithm
The earliest forms of Artificial Intelligence technology was used to recommend contents to viewers.
Online video Streaming
Made possible by cloud computing, better encoding and decoding softwares.
Global Expansion and Reach
Smart phones, tablets and computers became widely available and a wide access to internet made this move possible.
Conclusion
Netflix continues to remain the dominant internet entertainment and it is heavily investing in new technologies, Research and development to improve the viewer experience (Thimou, 2019). Netflix out-smarted its rivals such Blockbuster, HBO by being relevant to the signs of time and available technology. Personalized contents, adaptive streaming technology and User interface by Netflix make it highly competitive and offers edge over its rivals.
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References
Business Model Inc (n, d). Netflix: How a DVD Rental Company Changed the Way We Spend our Free Time. Retrieved Apr 30, 2019 from https://www.businessmodelsinc.com/exponential-business-model/netflix/
Christensen, C (n, d). Disruptive Innovation. Retrieved May 1, 2019 from http://claytonchristensen.com/key-concepts/
Le VPN (2018, Jul 20). Netflix, 10 Innovations that Changed the World. Retrieved Apr 30, 2019 from https://www.le-vpn.com/netflix-10-innovations-changed-world/
Ovide, S (2019, Jan 17). Netflix's Strategy is Growth, So It Cannot Have Growing Pains. Retrieved May 1. 2019 from https://www.bloomberg.com/opinion/articles/2019-01-17/netflix-nflx-earnings-strategy-is-growth-so-no-growing-pains
Thimou, T (2019, Jan 18). 5 New Netlfix Developments You Should Know About. Retrieved May 1, 2019 from https://clark.com/technology/tvsatellite-cable/10-new-netflix-developments-you-need-to-know-about/
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