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 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.
Disruptive innovation is when a new entrant targets overlooked segments with a new offering that is more affordable, convenient or simpler than the existing offering. The new offering doesn’t match existing offerings on traditional performance criteria, but the ignored customers don’t care; they prefer the affordability and accessibility of the new offering. The new entrant gets a foothold and over time takes more and more of the existing market, eventually displacing the incumbent (Ostrower, n.d.).
This is exactly what Netflix did to Blockbuster. Its original mail order service didn’t provide the instant gratification that Blockbuster did, but it was far simpler and less costly. And as Netflix did to Blockbuster, the usual disruption model is a startup disrupting an established player. Netflix so far is an example of a company disrupting itself. Doing so goes up against all the established instincts of the existing business (Ostrower, n.d.).
Netflix is one of the rare companies that have successfully disrupted itself. From 2011 to 2015, Netflix’s annual revenue rose from $3.2B to $6.7B. This growth demonstrates that it was successfully able to create the new market and disrupt itself without being displaced. But doing so has come at a cost. Netflix’s 2011 net income was $226M. In 2015 it was $122M. This doesn’t surprise me (Ostrower, n.d.).
Netflix is the leading provider of on-demand Internet video streaming in the US and Canada, accounting for 29.7% of the peak downstream traffic in US. Netflix attracts more than 23 million subscribers in the United States and Canada, and can stream out HD (High Definition) quality video with average bit-rate reaching 3.6 Mbps. such a large scale, fast growing video streaming platform with high availability and scalability is technically challenging. The majority of functions used to be hosted in Netflix’s own data center. Recently, Netflix has resorted to the use of cloud services, Content Distribution Networks (CDNs), and other public computing services (Adhikari, Guo, & etl, 2012).
Adhikari and etc. perform active and passive measurements to uncover the overall architecture of Netflix, which is currently the leading on-demand video streaming Internet provider. They show that Netflix uses multiple Content Delivery Networks (CDNs) to deliver videos to its subscribers; and they measure the available bandwidth of employed CDNs, and investigate its behavior at multiple time scales and at different geographic locations. They found that conducting light-weighted measurement at the beginning of the video playback and choosing the best-performing CDN can improve the average bandwidth by more than 12% than static CDN assignment strategy, and using all three CDNs simultaneously can improve the average bandwidth by more than 50%, which could be very beneficial for future bandwidth demanding services such as 3D movies (Adhikari, Guo, & etl, 2012).
· 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.
Disruptive innovation is a term of art coined by Clayton Christensen. It describes a 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 (claytonchristensen, 2012).
Much like digital cameras wiping out film, the new disruptive market had really wiped out nearly all the old standard bearers. After all, why should people pay more for something that is less convenient?
One of the Netflix’s greatest innovations is its deep involvement in algorithms to recommend content to its users, which involves machine learning. By analyzing the titles you watch they can recommend other films to keep you happy and coming back for more. It’s not just what the users watch, but also analyzing the behavior of the user. Each view and even the scrolls of the mouse can be put into the algorithm for more accurate results (collectiveinnovation, 2016).
Today Netflix continues to grow and constantly look for ways to innovate, whether through its distribution system, advanced recommendation engine, or content programming. In the last few years, Netflix has gone on to produce award winning shows like Orange is the New Black and House of Cards. Even after 18 years of sustained growth that would make most CFOs go into periplasmic shock, they continue to show no signs of slowing down and remain the greatest consumers of bandwidth on the entire internet (collectiveinnovation, 2016).
References:
- Adhikari, V. K., Guo, Y., Hao, F., Varvello, M., Hilt, V., Steiner, M., & Zhang, Z. L. (2012). Unreeling netflix: Understanding and improving multi-cdn movie delivery. In INFOCOM, 2012 Proceedings IEEE (pp. 1620-1628). IEEE. Retrieved May 10, 2016 from http://www.hit.bme.hu/~jakab/edu/litr/CDN/NetFlix12.pdf.
- Disruptive Innovation. (2012). Retrieved May 22, 2016, from http://www.claytonchristensen.com/key-concepts/.
- Disruptive Innovation: The Story of Netflix and Reed Hastings. (2016). Retrieved from: https://collectiveinnovation.com/disruptive-innovation-the-story-of-netflix-and-reed-hastings/
- Ostrower, D. (n.d.). Netflix Applies Disruptive Innovation to Itself. Retrieved from: https://www.altitudeinc.com/netflix-applies-disruptive-innovation-to-itself/.
Disruptive innovation is when a new entrant targets overlooked segments with a new offering that is more affordable, convenient or simpler than the existing offering. The new offering doesn’t match existing offerings on traditional performance criteria, but the ignored customers don’t care; they prefer the affordability and accessibility of the new offering. The new entrant gets a foothold and over time takes more and more of the existing market, eventually displacing the incumbent (Ostrower, n.d.).
This is exactly what Netflix did to Blockbuster. Its original mail order service didn’t provide the instant gratification that Blockbuster did, but it was far simpler and less costly. And as Netflix did to Blockbuster, the usual disruption model is a startup disrupting an established player. Netflix so far is an example of a company disrupting itself. Doing so goes up against all the established instincts of the existing business (Ostrower, n.d.).
Netflix is one of the rare companies that have successfully disrupted itself. From 2011 to 2015, Netflix’s annual revenue rose from $3.2B to $6.7B. This growth demonstrates that it was successfully able to create the new market and disrupt itself without being displaced. But doing so has come at a cost. Netflix’s 2011 net income was $226M. In 2015 it was $122M. This doesn’t surprise me (Ostrower, n.d.).
Netflix is the leading provider of on-demand Internet video streaming in the US and Canada, accounting for 29.7% of the peak downstream traffic in US. Netflix attracts more than 23 million subscribers in the United States and Canada, and can stream out HD (High Definition) quality video with average bit-rate reaching 3.6 Mbps. such a large scale, fast growing video streaming platform with high availability and scalability is technically challenging. The majority of functions used to be hosted in Netflix’s own data center. Recently, Netflix has resorted to the use of cloud services, Content Distribution Networks (CDNs), and other public computing services (Adhikari, Guo, & etl, 2012).
Adhikari and etc. perform active and passive measurements to uncover the overall architecture of Netflix, which is currently the leading on-demand video streaming Internet provider. They show that Netflix uses multiple Content Delivery Networks (CDNs) to deliver videos to its subscribers; and they measure the available bandwidth of employed CDNs, and investigate its behavior at multiple time scales and at different geographic locations. They found that conducting light-weighted measurement at the beginning of the video playback and choosing the best-performing CDN can improve the average bandwidth by more than 12% than static CDN assignment strategy, and using all three CDNs simultaneously can improve the average bandwidth by more than 50%, which could be very beneficial for future bandwidth demanding services such as 3D movies (Adhikari, Guo, & etl, 2012).
· 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.
Disruptive innovation is a term of art coined by Clayton Christensen. It describes a 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 (claytonchristensen, 2012).
Much like digital cameras wiping out film, the new disruptive market had really wiped out nearly all the old standard bearers. After all, why should people pay more for something that is less convenient?
One of the Netflix’s greatest innovations is its deep involvement in algorithms to recommend content to its users, which involves machine learning. By analyzing the titles you watch they can recommend other films to keep you happy and coming back for more. It’s not just what the users watch, but also analyzing the behavior of the user. Each view and even the scrolls of the mouse can be put into the algorithm for more accurate results (collectiveinnovation, 2016).
Today Netflix continues to grow and constantly look for ways to innovate, whether through its distribution system, advanced recommendation engine, or content programming. In the last few years, Netflix has gone on to produce award winning shows like Orange is the New Black and House of Cards. Even after 18 years of sustained growth that would make most CFOs go into periplasmic shock, they continue to show no signs of slowing down and remain the greatest consumers of bandwidth on the entire internet (collectiveinnovation, 2016).
References:
- Adhikari, V. K., Guo, Y., Hao, F., Varvello, M., Hilt, V., Steiner, M., & Zhang, Z. L. (2012). Unreeling netflix: Understanding and improving multi-cdn movie delivery. In INFOCOM, 2012 Proceedings IEEE (pp. 1620-1628). IEEE. Retrieved May 10, 2016 from http://www.hit.bme.hu/~jakab/edu/litr/CDN/NetFlix12.pdf.
- Disruptive Innovation. (2012). Retrieved May 22, 2016, from http://www.claytonchristensen.com/key-concepts/.
- Disruptive Innovation: The Story of Netflix and Reed Hastings. (2016). Retrieved from: https://collectiveinnovation.com/disruptive-innovation-the-story-of-netflix-and-reed-hastings/
- Ostrower, D. (n.d.). Netflix Applies Disruptive Innovation to Itself. Retrieved from: https://www.altitudeinc.com/netflix-applies-disruptive-innovation-to-itself/.
Comments