Disruption innovation and entrepreneurship assignment on disruption in an industry representing the deep changes in the way of industry operations
Task: Can you choose an organization and establish how it is a disruptor in your disruption innovation and entrepreneurship assignment? How does it face challenges and how it is leading to development?
Disruption in an industry represents the deep changes in the way of industry operations. For a business to be disruptive requires redefining the market size or target market. In this disruption innovation and entrepreneurship assignment, Netflix has been chosen as a disruptive organisation. A brief description of the business has been illustrated in this disruption innovation and entrepreneurship assignmentwhile highlighting each stage of its development.
Rationale for Netflix to be disruptive as considered in the disruption innovation and entrepreneurship assignment
The American subscription streaming service and production company Netflix has been taken into consideration as a disruptive organisation due to its low end of the market entrance. In 90s, the organisation was known as a DVD movie rental company. With very little differentiation in this disruption innovation and entrepreneurship assignment, the business provided convenience for the consumers. The organisation critically understood the consumer’s pain points and eliminated that (Christensen et al., 2015). One of the main reasons for choosing this organisation in this disruption innovation and entrepreneurship assignmentwithin the category of disruptive innovation, is its ability to quickly adapt to business models with technology and innovation.
Figure 1: Stock Return Performance of Netflix
(Source: Petzoldet al., 2019)
Being a new entrant in the industry, the organisation had the chance to experiment and change its business model completely. With the rapid growth in Internet infrastructure, the business captured the opportunity while launching video streaming platforms. In the initial phase of Netflix, blockbuster was the core competitor (Hivelr.com, 2020). Even the organisation had the chance to buy Netflix before the Internet era. However, the organisation's decision not to innovate failed the business. To see disruption before the ground shifted below them.
The willingness to incorporate innovation is the main reason which led Netflix to become the digital disruptor in today's time. In the initial phase, when Netflix started the business, video streaming was not a new concept. Convenient and affordable services allow the consumers of Netflix to watch content whenever they want, rather than planning ahead of time (Aib.edu.au, 2017). Moreover, the company even started creating its own content, which made the company the best global disruption Channel for TV and movies. The business is also focused on developing content in various local languages. The main motive of the businesses is to attract consumers from around the globe.
Challenges and Opportunities mentioned in the disruption innovation and entrepreneurship assignment
In 2021, the tie up between Amazon and MGM has influenced the streaming business, Netflix. The future growth of NFLX stock price can have certain impact on the underlying growth of the business. Even though the COVID-19 pandemic has helped the business to materially boost the results in 2020, the growth is observed to be slowing down in the US and overseas (Nasdaq.com, 2021). On the basis of the sell side predictions of 2022, the business growth may hold onto its current evaluation. However, the deal making between the rival streaming services can result in falling short, which can lead the business at risk of pulling back.
Opportunities of disruption innovation and entrepreneurship assignment
With approximately 221.64 million paid subscribers worldwide, Netflix has built a strong consumer base (Statista.com, 2022). This huge advantage of the business has allowed the company to tap into various other countries. This is a great opportunity for the business to expand its subscribers and services. There is a possibility for the business to target the countries where it is not currently available such as Syria, Crimea and North Korea. The subscriber base of the business is the sole opportunity for its predominant growth.
Stages of the Organisation’s development
Considering different stages of Netflix, it is quite clear that in the initial stage of the business, Netflix was not Observed to be high on demand. It started as a small competitor to bricks and mortar movie hiring shops such as blockbuster. The pre-start or tinkering era (1997) of the company introduced a membership concept. In its early days as a postal business, the company did not refuse to innovate through embracing various options. It incorporated options such as express post. As mentioned earlier in this disruption innovation and entrepreneurship assignment, the willingness of the business for innovation led the company to become one of the greatest and most used video streaming platforms across the world.
As per the information of CBNC, In 2015, Americans spent over $420 billion on subscriptions (Cnbc.com, 2016). The growth of the company began in 2000. The accumulated 4-year growth inflection point helped the business to acquire $41,237,464 revenue. Therefore, it is quite clear that the small company with fewer resources successfully established an incumbent business (Christensen et al., 2018). Majorly by focusing on improving the services, Netflix delivered more suitable functionality for its target consumers.
In conclusion of this disruption innovation and entrepreneurship assignment, it can be stated that being a disruptive organisation, Netflix has been able to successfully Develop a strong consumer base to support its video streaming business. The constant focus of the business on its competitive advantage is helping the business to achieve long-term success. However as per the findings of this disruption innovation and entrepreneurship assignment, the business will be required to keep defending its competitive advantage for remaining a strong competitive business in the upcoming future.
Aib.edu.au, (2017). Why Netflix Is The Ultimate Digital Disruptor. Retrieved on: 01/07/2022, from: https://www.aib.edu.au/blog/innovate/netflix-digital-disrupter/#:~:text=This%20willingness%20is%20what%20led%20Netflix%20to%20become,a%20wider%20selection%2C%20all-you-can-watch%2C%20convenient%20and%20low-cost%20approach.
Christensen, C. M., McDonald, R., Altman, E. J., & Palmer, J. E. (2018). Disruptive innovation in disruption innovation and entrepreneurship assignment: An intellectual history and directions for future research. Journal of management studies, 55(7), 1043-1078. Retrieved on: 01/07/2022, from: https://onlinelibrary.wiley.com/doi/pdf/10.1111/joms.12349
Clayton M. Christensen, Michael E. Raynor, and Rory McDonald, (2015). What Is Disruptive Innovation as per disruption innovation and entrepreneurship assignment Retrieved on: 01/07/2022, from: https://hbr.org/2015/12/what-is-disruptive-innovation
Cnbc.com, (2016). Why Spotify, Netflix and HBO nailed business model of the future. Retrieved on: 01/07/2022, from:
https://www.cnbc.com/2016/10/31/why-spotify-netflix-and-hbo-nailed-business-model-of-the-future.html Hivelr.com, (2020). Netflix: From Disruption to Defending its Competitive Advantage. Retrieved on: 01/07/2022, from: https://www.hivelr.com/2020/06/netflix-from-disruption-to-defend-its-competitive-advantage/#:~:text=Netflix%20falls%20under%20the%20category%20of%20disruptive%20innovation,and%20innovation%2C%20and%20less%20focus%20on%20sustaining%20innovation.
Nasdaq.com, (2021). Netflix Facing Serious Challenges from Big Media. Retrieved on: 01/07/2022, from: https://www.nasdaq.com/articles/netflix-facing-serious-challenges-from-big-media-2021-06-09 Petzold, N., Landinez, L., &Baaken, T. (2019). Disruptive innovation from a process view: A systematic literature review. Creativity and Innovation Management in disruption innovation and entrepreneurship assignment, 28(2), 157-174.
Retrieved on: 01/07/2022, from: https://onlinelibrary.wiley.com/doi/pdfdirect/10.1111/caim.12313
Statista.com, (2022). Number of Netflix paid subscribers worldwide from 3rd quarter 2011 to 1st quarter 2022. Retrieved on: 01/07/2022, from: https://www.statista.com/statistics/250934/quarterly-number-of-netflix-streaming-subscribers-worldwide/