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Improvement Project of Science Construction CS

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...
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How Netflix became a disruptor?


A value proposition is a clear statement that explains how your product solves customers' problems or improves their situation (relevancy), delivers specific benefits (quantified value), tells the ideal customer why they should buy from you and not from the competition (unique differentiation) (Laja, 2017). It’s the most important determinant as to whether consumers will acknowledge whatever it is your trying to get their attention about. So getting it right is a must. Blockbuster did it right. Netflix did it better.

Blockbuster Video or simply Blockbuster, is an American-based provider of home movie and video game rental services through a video rental shop, DVD-by-mail, streaming, video on demand, and cinema theater (Wikipedia, n.d.). The first store opened in 1985. Worth $5 to 6 billion dollars at its peak in 2004, Blockbuster’s growth came out of a value proposition to enable customers to watch hit movies in the comfort of their own homes. Twelve years later enters Netflix.

Netflix, Inc. is an American media-services provider founded in 1997. The company's primary business is its subscription-based streaming service which offers online streaming of a library of films and television programs, including those produced in-house (Wikipedia, n.d.a). As of April 2019, the company has a net worth of $163.89 billion. The Netflix value proposition focuses on a subsegment of the mass market who are willing to pay a slightly higher price to watch movies in high definition.

The Netflix value proposition embraces the change of the industry to technology and the conveniences that come with it. Even though Blockbuster’s value proposition was to offer viewing from home, Netflix had a proposition for those who wanted to watch movies in HD. Watching movies in HD also allowed viewing from home, but in a much more convenient way. You never even have to leave home and if you were away from your tv, your subscription was available on your phone, laptop or tablet. You have the option to see every video that would be on Blockbuster’s shelf and pay only $7.99/month to do so while streaming in HD, instead of paying the same price per movie. With Netflix, there were no late fees to be assessed, no waiting in lines, no videos unavailable. Netflix gave the customers high definition, in the comfort of their own home, with less money out of pocket and even more convenient. Netflix simply came along and did it better.
Perhaps the biggest reason Netflix flourished and Blockbuster fizzled out was fear of change (Lucero, n.d.). They were unable to let go of the past and forge a path for themselves in the brave new world of technology. By holding on to the brick-and-mortar concepts of video rental, they doomed themselves to losing their customer base to the more efficient and convenient ways. When they did finally wake up, it was too late. Their customers were gone and loyal to Netflix.
Identify and describe some of the technology innovations that Netflix was able to exploit and how these innovations contributed to competitive advantage.
Netflix moved ahead of Blockbuster at a time when technology was being used to enhance everything. Netflix leveraged technology several ways as described on Wikipedia (Wikipedia, n.d.b.):
Streaming (2007) - With complaints of DVD scratches by US mail, the Netflix platform became even more appealing with the addition of online streaming. This lead to the majority of their customers reliably streaming instead of using mail to receive their DVDs. Adaptive bitrate streaming is introduced to the platform for better customer viewing.
API (2008) - Application programming interface (API) allows access to data for all Netflix titles as well as access on a user's behalf to manage his or her movie queue. The API was free and allowed commercial use. Users could add titles to their Netflix queue or begin watching immediately as well as import some user information such as reviews.
Amazon EC2 (2010) - This was an Information Technology (IT) upgrade for Netflix. In this update, master digital copies of films are stored on Amazon S3 encoded into different versions based on video resolution and audio quality. Sent to content delivery networks, these videos now become more readily available to their users.
Open Connect (2012) - A custom content delivery network, Open Connect servers are built to focus on low power, high density to run the operating system of the ISPs who handle their content. This was so successful that they closed their own data centers by 2016 and further developed Open Connect which also was detected in 233 individual locations on six continents and the largest amount of traffic in the US.
Ultra HD (2015) - Ultra HD appears as an option for subscribers who pay premium fees. Users can choose download rate quality.
Open Source Software - OSS focuses on providing immersive experiences across all internet-connected screens and allows for continuous build and integration into their worldwide deployments serving members in over 50 countries.
Competitively, Netflix entered the market ready to play at the level of change which is the only constant in this world. Accepting that fact, Netflix has been able to build on their value proposition by making the user experience more user friendly and entertaining with each new upgrade for their customers and their vendors.
Netflix is often used as an example of disruptive innovation. 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.
Clayton Christensen describes disruptive innovation as, “process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors” (Christensen, 2019). The initial characterizations of a company that has these qualities are lower gross margins, smaller target markets, and simpler products and services (Christensen, 2019).

Having entered the market 12 years behind Blockbuster, Netflix was definitely the new kid on the block. Their value proposition put them in a position for targeting a subsegment of the mass market which automatically put them in place for lower gross margins. From DVD delivery to their streaming method of delivery, the  same content became much simpler to deliver, more convenient, more plentiful, and more value conscience for the users. The delivery even provided Netflix with a money saving edge not having stores and personnel to include in their budget.
Netflix rose up the ranks as a disruptive innovator by introducing DVD by mail, capturing Blockbuster’s underserved and unserved customers, and pushing them towards bankruptcy. When streaming came onto the horizon, Netflix was watching and embraced the new era in delivery systems, thus becoming a disruptive innovator again and not a casualty of fear and change.

References

Christensen, Clayton. (2019). Disruptive Innovation. Retrieved from http://claytonchristensen.com/key-concepts/
Laja, Peep. (May 2017). Useful Value Proposition Examples (and How to Create a Good One. Retrieved from https://conversionxl.com/blog/value-proposition-examples-how-to-create/
Lucero, Diego.(n.d.). Why Blockbuster Failed. Retrieved from https://www.siamtek.com/why-blockbuster-failed/
Wikipedia. (n.d.). Blockbuster, LLC. Retrieved from https://en.wikipedia.org/wiki/Blockbuster_LLC
Wikipedia. (n.d.a.). Netflix. Retrieved from https://en.wikipedia.org/wiki/Netflix
Wikipedia (n.d.b.). Technical Details of Netflix. Retrieved from https://en.wikipedia.org/wiki/Technical_details_of_Netflix

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