Abstract
Abstract
Table of Contents
Table of Contents..................................................................................................................................1
1. Abstract:........................................................................................................................................3
2. Introduction:..................................................................................................................................3
3. Critical Discussion of Digital Disruption:........................................................................................5
4. Evaluation of specific trends related to the digital disruption:......................................................7
4.1. E-commerce/ digital Payments:.............................................................................................7
4.2. Internet of Things (IoT):.........................................................................................................8
5. Case Study Organization: Netflix....................................................................................................8
6. Netflix’s Digital Disruption Journey:.............................................................................................10
6.1. Transition Phase: the Streaming Service:.............................................................................10
6.2. Creation of Original Content:...............................................................................................10
6.3. Data Analytics and Personalization:.....................................................................................11
6.4. Expansion around the Globe:...............................................................................................11
7. Impact and Challenges caused by Netflix’s digital Disruption:.....................................................11
8. Applying e-commerce and IoT trends to Netflix's digital disruption journey can further enhance
its offerings, improve operational efficiency, and address certain challenges. Here is how:...............12
8.1. E-commerce/ Digital Payments:...........................................................................................12
8.1.1. Personalized User Interface and Suggestions..............................................................12
8.1.2. Management and retention of subscriptions:..............................................................12
8.1.3. Content Delivery and Monetization:............................................................................12
8.1.4. Merchandising and cross selling..................................................................................12
8.1.5. Decision Making based on derived data:.....................................................................13
8.2. Internet of Things (IoT):.......................................................................................................13
8.2.1. Content Recommendations:........................................................................................13
8.2.2. Optimized Data Delivery:.............................................................................................13
9. Critical analysis on the current capability Netflix’s capability to respond to current trends
around digital disruption.....................................................................................................................14
9.1.1. Embracement of emerging technologies:....................................................................14
9.1.2. Ventures in Original Content:......................................................................................14
9.1.3. Adaptation of Streaming technology:..........................................................................14
9.1.4. Expansion around the globe:.......................................................................................15
10. Strategic Recommendations:...................................................................................................15
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11. Conclusion:..............................................................................................................................16
12. REFERENCES:............................................................................................................................17
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1. Abstract:
The conception of digital disruption has emerged to be a cogent force resulting in the global
reshaping of industries in an era of swift technological advances. The study below represents
critical analysis and exploration of the idea of digital disruption emphasizing on its
transformative nature to change businesses environment. Based on this insight, two specific
trends related to the digital disruption .i.e. e-commerce and internet of things (IoT) were
examined and how they affect the workings of the chosen company i.e. Netflix. In order to
capitalize on the new opportunities and mitigating risks, strategic recommendations are
implicated by the assessment of the current competencies and abilities company’s current to
tackle these challenging trends.
2. Introduction:
Technological advances around the globe have profoundly altered the way businesses
function, pushing the boundaries of traditional approaches and encouraging creativity. Digital
disruption acts as a fundamental shift that is known to be triggered by digital technologies,
transforming the industry patterns, dynamics of competition, and consumer habits. A brief
overview of the digital disruption is represented below emphasizing mainly on the cause and
effects, and implications of the organization selected for the case study.
For a period of more than two decades, the term "digital disruption" has been concomitant
with various undertones that have assisted and hindered the development and understanding
of disruptive innovation theory. This theory elucidates how disruption denotes a process that
specifically interprets the competition between the new entrants and the incumbents i.e. the
ones already in power (Christensen et al.). Moreover, it addresses the business innovation
model, which enables the new entrants to enter the market with low-cost, easily navigable but
under-performing products (Christensen 2006; Christensen et al. 2015). Different
circumustancesserving as a boundary for Christensen’s conceptualization entrée explain the
competitive relation between the new entrants and incumbents, also the way by which new
entrants enter the marketplace. Moreover, technological innovation plays only a negligible
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role in digital disruption impacting only the competition relative to the systemic effects on the
industries.
Though it is also a fact that generally digital disruption is perceived from a seeming point of
view of the organizations whose status quo and standard pattern of development is disrupted
refraining them to follow up on the traditional conditions and footsteps. It has created a
tremendous pressure on the well-established firms to adapt to the certain prevailing shifts in
the digital processes hence swinging back and forth on the ladder of digital disruption.
The prompt developing of the processes through which digital disruption creates new or
splits down existing resource linkages, thereby transforming older sustainable values for
producing value and growth.
Example: Kodak was once considered a major force in the camera marketplace, which failed
to change to meet the changing customer demands thus failing to evolve with the global
technical advancements. Although their initial target were the female consumers, they failed
to get an idea about how photography and gadgets were becoming more popular as lifestyle
technology persuading a larger audience including men. Kodak’s resistance to change ended
up benefiting other businesses in the market including Sony and cannon as they tackled the
ongoing digital disruption shift with new market strategies, campaigns and front-line
technology. As a result of which Kodak went bankrupt still refusing to assent to the digital
disruption changes even after a huge loss of the major profit of its market share.
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Digital disruption is an unrelenting force that is very hard to fight back. Businesses, however,
may embrace and even ride the wave of change brought about by the digital disruption, by
staying in the foreground and working with the changes rather than against them. In this way,
the digital disruption may even prove to work for the benefit of the organization leading to
growth and a myriad of new opportunities, preventing the digital disruption process from
sweeping away the success. In general, digital disruption is only a shift that results from the
growing and ever-changing customer needs. Adhering to these shifts will also make a way for
a satisfied clientele and potential growth. (Chase R. 2015)
According to Karimi and Walter (2015), digital disruption is generally described as a form of
unstable turmoil fetched about by digital innovation that often leads to the breakingdown of
boundaries and processes that formerly functioned as ample foundations for the creation of
value and best results. Several other authors have also suggested that in this digital age, given
the extensive possible benefits and risks, the profitable organizations must include change
control management as a part of their business models to capitalize on the changing global
conditions and must initiate digital disruption and systemic changes (Legner et al. 2017).
Digital disruption has brought about unparalleled changes in a broad spectrum of sectors,
transforming economies, societies, and industries. Although it fosters innovation and
proficiency, it also boons difficulties and gives rise to grave concerns about the long-term
effects it causes. Some of the advantages as well as disadvantages of digital disruption are
examined below:
On the positive side, digital disruption has significantly boosted production and effectiveness
across a wide range of businesses. The effective processes used today by the successful
organizations i.e. Process simplification, performance boost and cost reduction, have only
been made possible by the rise of digitalization, artificial intelligence (AI), data analytics and
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automation. Organizations that use digital disruption as a part of their management systems
are able to improve their products, facilities and services, can attain a competitive edge, and
cater to the market demands more effectively. Several business models have also been made
successful when digital disruption occurs, as it promotes entrepreneurship and gives startups
a chance to thrive.
However the swift speed at which digital disruption is occurring has caused concerns and
challenges. One of the main concern is the impact on employment. Certain jobs are being
replaced as the new systems of automation and AI are being introduced and evolved, creating
problems like competition in the industry leading to joblessness and retraining the workforce.
This gives rise to the inequalities birthed by the ‘digital divide’ arising from the unequal
distribution of the accessible digital technologies. It always creates a chance for the industries
to change and dispensation of some people, which results in the socio-economic inequality.
Digital disruption has also lead to loss of privacy. The expansive dependency on digital
platforms leads to the mass gathering of both useful and useless data. With each rising wave
of digital disruption, the data security measures require an upended too, instigating demands
of a higher level of monitoring, surveillance, and potential of information exploitation. It has
been proved challenging to avoid an incursion on privacy and to find an accurate balance
between preservation of security and technological improvements, calling for implementation
of advanced rules and regulations.
In addition, it is also concerning that only a few renowned tech giants have clamped on a
disproportionate amount of power. Due to digital disruption, only a few organizations are off
to the race of dominancy, which has created oligopolies that may encumber innovation by
limiting the competition. Concerns have arisen regarding customer demands, fair
competition, and the overall state of the market by this concentration of power and capital. It
is also necessary for regulatory framework and business models to change as an imperative
call to solve the problems and give small firms opportunities to arise in the business world.
(Christensen 2015)
To conclude, there are both positive and negative aspects to the digital disruption.
Technology, if responsible for creativity, efficiency and economic expansion can also bring
up concerns about privacy, employment, and market or capital concentration. A sustainable
and viable future depends on maintaining an ideal balance between embracing innovations
caused by the digital disruption while tackling the challenges associated with it. It is
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imperious that stakeholders and policy makers make collaborations with the enterprises and
the society as whole to effectively acknowledge the complex intricacies of digital disruption
and guarantee that the advantages are dispersed fairly across the globe. (Chad B. 2017)
Two specific trends i.e. internet of things and ecommerce are evaluated with emphasis on
how they regulate the process of digital disruption. Different market dynamics, organizations
regulatory settings and technological innovations are the encompassing entities in the trend
analysis. Moreover in the section below, the possible impacts of the potential developments
resulting from digital disruption are evaluated using Netflix as an organization.
It is debated that, Juvenal, a roman poet has quoted ‘Panem et circences’- which is translated
as bread and games, is all that is necessary to keep one happy. The technological
breakthroughs resulted by digital disruption has created a potential possibility for the
consumers to create models for entertainment, games, music and videos, that are independent
of the physical geographical location having an on-demand manner. Businesses that are
adaptable to the changing delivery and distribution methods have chances to survive the
digital disruption. (Menozzi 2022)
E-commerce, the novel economy, and digital disruption are more closely related than it
seems. Digital innovation and experience design are crucial differentiators serving as a
beacon for future achievement while undergoing digital disruption. It is also evident that the
digital disruption unlocks a new window of technological innovation and opportunities,
predominantly in the fields of e-commerce, AI, IOT, and mobile technology. Moreover, the
disruptive technologies can also make significant impacts on e-commerce supporting the
framework for Industry 4.0 and its 5Cs marketing framework. Gaining a deeper
understanding of digital disruption is also crucial. It involves intelligence automation,
combining data, and processed knowledge with disruptive technology to lead in value data
and content. (Sidhwani P. 2022)
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The "Internet of Things" (IoT) is an inter-connected network of technological items that are
adept in exchanging data statistics and independent performance. These are the gadgets that
have software, sensors, and other technology integrated into them. The IoT is a vanguard of
the digital disruption today, leading the digital fronts of many businesses globally. As
internet of things trades and collects data, this data goes through effective examination
providing new insights to change the customer interactions and hence bringing disruption in
the stable business environments. It also upended formerly created paradigms and shifts them
through an interconnected network. But the enormity of possibilities also brings certain
difficulties. As more and more devices become connected, the security concern also
increases, posturing privacy issues as the devices become susceptible to cyberattacks.
Interoperability problems also occurs which makes it necessary for the standard frameworks
and security protocols to update their digital structures.
Netflix serves as a compelling example of the concept of digital disruption that went from a
rental DVD service to a streaming powerhouse that has its ties around the globe. With the
company’s capability to adapt to the disruptive technological environment and digital
innovations made its noteworthy accomplishments possible. The adaptation of changing
content production, technological advancement and global market penetration all lead to a
successful business model. In a constantly evolving digital market, the past conditions do not
determine future success.
Background: Netflix was founded by Reed Hastings and Marc Randolph in 1997, which
underway its journey from a DVD rental by mail service, hence disrupting the old brick-and-
mortar video rental industry which was dominated by Blockbuster. Nonetheless, with the
advancement of digitalization and accessible high-speed internet, the company saw an
opportunity and curated its business model to shift towards online streaming. The main
takeaway from Netflix's story until 2016 is that it makes apparent that a company has ability
to embrace new business models aligned on a novel idea and emerging as an industry leader.
[7]
Furthermore, it puts a great emphasis on the value of digital disruption and transformational
leadership, as validated by Reed Hastings at Netflix. Hastings' business approach of
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"preserving the core, while creating the new" has remained critical in regulating Netflix’s
success throughout its transformational journey, efficaciously contemplating the company's
existing strengths with innovative stratagems to acclimatize to shifting and more demanding
preferences of the consumers and technological advancements. (Chase R. 2016)
The company shifted its strategy of acquiring foreign content to creating its own content. The
heavy investment in the production of Netflix original documentaries, series and films gave it
a unique and distinguished offering in the marketplace. By producing its own content, Netflix
appeals consumers all around the globe, retains the existing ones, thus generating more
revenue through plans and subscriptions. The focus on content creation has permitted it to
influence new audience and magnify its global reach. The Netflix’s innovation-disruption-
transformation journey demonstrates a proficiency of distinctive competencies and
demonstrates how digital disruption is responsible for diverse growth and changes.
(Venkatraman N. 2017)
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With the new launch of its video streaming service in 2007, Netflix gave customers access to
instantly accessible online movie platform and TV show screening. This move disrupted the
home TV entertainment market by mounting a huge challenge to traditional media
corporations and cable networks by offering a vast collection of content at a more reasonable
cost.
Netflix has known to made a number of substantial investments in the creation of its
own creative content, substantially causing a digital disruption in the the entertainment
industry. Producing hit series like 'The Crown', "House of Cards," and "Stranger Things,"
and "The Crown," which attracted millions of viewers globally, helped Netflix differentiate
the streaming platform from opponents. In addition to increasing clientele retention, this
tactic minimized the dependency on content authorizing deals with other companies.
Netflix enhanced its user experience and customer engagement by using machine learning
(ML) algorithms and data intelligence to tailor suggestions for its users. Netflix may enhance
consumer pleasure and allegiance by providing modified content and personalized
recommendations which are based on consumer preferences, interests, derived from the
analysis of watching patterns, ratings, and demographic data.
With a focus on swift international growth, Netflix launched its video streaming services in
several countries around the globe. Netflix successfully entered different markets by offering
consolidated content with different language options available hence catering to local
preferences, turning into a genuinely liked global entertainment business. (Menozzi 2022)
Impact Challenges
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In conclusion, Netflix's story shows how digital disruption may completely alter market
demands and customer behavior. By espousal of technology, forming a completely new
business model, and driving the needs of its customers first, Netflix progressed from a DVD
rental company to a globally running organization, leaving a long-term impression on the
entertainment sector. (David, J. 2018)
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The company has also experimented with virtual approaches to storytelling. Netflix continues
to be a prominent player in the entertainment industry and at the epicenter of digital
disruption by experimenting with modern technologies and innovative ingenuity.
10.Strategic Recommendations:
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technological investments. Creating an inventive and flexible culture is crucial to seizing new
opportunities and reducing potential hazards. (Yuan 2023)
Recommendations
Internet of Things for Utilizing IoT devices to collect consumer data in real-time.
Customized and
Improve recommendations for content as well as delivery
Optimized content
optimization with the use of machine learning.
Internationalization and As the company grows it should not stop supplying localized
Localiztion
content to developing nations.
Making use of blockchain-based technologies to facilitate
international collaboration and trade.
Diversifying Streams of Look into new revenue streams including joint ventures and
Revenue
advertisements.
Ingenious use of blockchain technology to generate revenue
from goods like digital memorabilia.
11.Conclusion:
The report concludes with its emphasis on digital disruption’s ability to reshape businesses
and how important it is for them to actively welcome change. By critically studying specific
trends and assessing the organization's preparedness, proactive suggestions are recommended
to help Netflix and any organization in similar position for sustained success in a world that is
growing increasingly digital.
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12.REFERENCES:
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11. Sindhwani, P. (2022). Digital disruption: The e-commerce revolution and how to
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