Netflix, an online suscription based DVD rental service, has always structured on alternative ways of providing home movie service. Their strategy was very surprising and succesful to catch the virgin points of market and utilizing new trends in technology and customer habits.
Because, distruptive technology means innovations that improve a product or service in ways that the market does not expect, typically by lowering price or designing for a different set of consumers, Netflix strategy can be a kind of disruptive technology in the point of they were changed the way of business in service side. Their starting point is in 1997, meaning the early stage of internet using and also online shopping. Only early adopters were in the potential customer basket. There is very strong habit of usual film renting. However, Netflix achieved to see the beyond of market and concantrate on new ways of doing this job. They tried to structure new technological ways to collect orders and provide materials on their hand.
The other rivals who are already in the market and also big brothers of the market, dismissed the threat of new boy because they believed that customer habit would not change, online shopping can not be threat for film renting. They couldnt see the customer side, their needs for change and innovative ideas, good service for their satisfaction. Big rival like Blockbuster didnt have so much variety of films or other products in their shops, also they dont want to invest money for customer satisfaction. To invest for technology is very risky and big cost fort hem. So, they tried to utilize customer as long and cheap as possible before change the rule of game by themselves.
After Netflix join the game and show surprising success, Blockbuster and others tried to some counter moves. But they were late and needed to much more investment. In addition, Netflix handled ‘innovative and customer center company’ in customers mind, and become a leader in that point. To catch that success is not easy for older companies, ‘out of fashion’.
Netflix has entered VOD after BB and other rivals used that way as a threat to netflixs success. This product is very paralel for new technology machines and devices like mobile phones and LCD TVs. We know that Netflix always give importance to custmer needs and wants. They always used analytical researches and reports to invest somewhere. Their success to achieve those sale revenues is based on this secret. So, VOD service is good decision. They have to follow new technologies to provide customer satisfaction. But, on the other hand they should continue to differentiate themselves about brand innovative image and good customer understanding. They shouldnt deny to invest other kind of distruptive technologies to continue that succesful company image. Becuse products are outsource, they should focus on service.
For example, internet, has become standard for many machines and devices. And people buy and use much more those products for their daily life or business. So, all companies should concentrate on using internet, which makes easy to buy/sale something. Real market is in ‘digital area’ now. eveybody should follow internet based trends.
