Global Business Trends: Digital Disruption and Innovative Strategies

This report examines the phenomenon of digital disruption and its impact on global business trends. It highlights several businesses, including smartphones, Uber, Airbnb, Kindle, and Netflix, that have introduced innovative products and services, causing significant disruption in their respective industr...Read More

Trends in global business
Digital disruption

Introduction
Digital disruption is a recent phenomenon which has led to the growth and development of
various industries across the globe. Any new technology in the digital world that disrupts the
status quo and directly impact the value that is currently being offered by goods and services is
digital disruption (Bradley & O’Toole, 2016). At present, digital disruptions have occurred in
every leading industry. These disruptions have changed consumer behaviors, preferences and
attitudes towards different product categories.
Technology has immersed into our lives to an extent that the massive acceptance towards
technology has changed the shape of business markets. Blending of IT for personal as well as
professional use also known as consumerization of IT has also increased. Digital disruption has
been a boon for consumers as well as marketers. No doubt, it has led to the discontinuation of
various products and made them obsolete. Various economies and countries propagate and
promote digital disruption in order to propel their growth and development (Schmidt & Cohen,
2010).
There are so many innovations which have been gifted to us by digital disruptions that have
occurred in different parts of the world. Various global brands have spread to different parts of
the world owing to their disruptive nature. This report highlights upon several businesses that
have innovated products and services that have brought a massive wave of disruption and
changed the shape of the industry within which they operate.
Smartphones
Smartphones have become an essential part of our lives. By 2019, the total number of
smartphone users in the world is expected to cross the 5 billion mark (Statista, 2018). However,
Smartphone were the first form of digital disruption that occurred in the world. The first
Symbian based phone was launched in 2000 by Ericson. Today, Smartphones are capable of
performing tasks that were impossible by traditional mobile phones. It is the growth of android,
windows and IOS operating systems that have effectively utilized the internet and created
millions of mobile applications to cater to the needs of over a billion customers across the globe
(Kenney et. al., 2015).

Smartphones were probably the first disruption that changed the shape of consumer electronics
industry (Evans & Forth, 2015). Smartphones allowed users to browse the internet, book
appointment, access social media, send emails, play online games, read the news and basically
remain connected with the entire world with the help of a single device. It was the advent of
smartphones that gave customers a firsthand experience of technology. The increasing use of
applications has allowed customers to book doctor appointments, movie tickets and even find
dating partners over the internet. The usage of traditional mobile phones was limited making and
receiving phone calls and text messages to people. This was possible in the 2000s as people had
started accepting technology and using it in their daily lives. Smartphones also faced immense
resistance when they were first launched but once the industry took off, it was a different ball
game altogether. Today a smartphone is not a luxury, it comprises of a basic need for human
beings and this is a disruption in the truest sense of the matter.
Uber
Uber taxi service was launched in 2009 and since then has taken over the taxi industry by the
storm. Initially if a person had to book cab to any particular destination, they essentially had to
leave their homes, wait for a while, hail the taxi, convince the taxi driver to go to the destination
and finally find the right amount of cash to pay the driver. Uber has saved individuals from the
long wait for taxis, the uncertainty of finding the taxi and the incorrigibility of the taxi driver.
With the help of a single mobile application, customers can now book an air conditioned taxi and
have the taxi reach their doorstep at their desired time (Dawson et. al., 2016). Customers can also
pay via online mediums and not worry about carrying cash. The driver has been critically
assigned after intensive analysis to ensure that the driver reaches on time and drops the passenger
in the desired location. Uber is currently present across 633 cities in different parts of the world.
Being the world’s largest taxi company, Uber has created a massive disruption as the brand does
not own a single car (Catlin et. al., 2015). All Uber provides is a platform to connect drivers and
passengers. The advent and the extent of the growth of Uber has been possible owing to
increasing technology and massive globalization that we are witnessing today. Many traditional
jobs have been lost since the inception of the brand and hence Uber is also banned in various
cities.

Uber has also adopted a dynamic pricing strategy. This indicates that the price of a service
fluctuates depending on the demand at the moment. Various studies also suggest that Uber
drivers earn a much larger amount money as compared to traditional drivers (Angrist et. al.,
2017). Uber has led to a revolution which is now better known as the Uberisation of the world.
The brand awareness is so massive that it is now being used as a verb. The term ‘Ubering’ has
also caught on. The disruption is such that various well educated people are also registering
themselves with Uber in order to earn an extra income.
Along with the taking over the industry, Uber has also attempted to alter the basic functionalities
of the industry. In the recent years, Uber has created and promoted the sharing economy. This
industry allows customers to share their cab with other customer travelling in the same direction
or near similar destination (Reddy & Reinartz, 2017). This step is a clear attempt to tackle the
increasing global levels of air pollution. Along with that, it makes the service less expensive for
customers as they are now sharing costs with other customers travelling to the same location.
All these factors combined have declared Uber as a disruptive giant that has eaten up traditional
service providers and gained a massive market share in the taxi industry. This has been possible
owing to advent of technology and the widespread acceptance of the same. However, it is
imperative for the brand to continue innovating and accept as well as adapt improving
technologies like driverless cars. The brand is a perfect example of digital disruption and the
future appears bright for Uber in the upcoming years.
Airbnb
Airbnb is a leading player in the hospitality industry. The brand is a clear disruption in the
industry because unlike all other traditional hotels and hostels belonging to the hospitality
business, Airbnb does not own a single property. The brand has simply created an online
platform which connects people who wish to rent out their properties and tourists and travelers
who are looking for places for short term stay (Tornjanski et. al., 2015).
Airbnb was introduced in America a decade ago. Since then the brand has earned over 150
million users and over 0.6 million registered properties. Airbnb’s aim is to not just provide
travelers with a place to stay but also have them experience the local culture of the area where

they are visiting (Zervas et. al., 2017). The Airbnb spaces are very often much less expensive
than premium or luxury hotels of the city. Any individual who has an extra space to
accommodate someone can register their property on Airbnb and earn from that property.
Moreover, the hosts as well as the travelers have the discretion about selecting their choice of
guests and property respectively.
Airbnb runs on economies of scale and aims to list a large number of properties in different parts
of the world. In order to remain competitive against hotels, Airbnb charges a mere 3% of service
fee from the hosts per reservation and between 6% and 12% from the booking amount paid by
the guests. Since the advent of the firm, people’s attitudes, behavior and preferences have
changed by booking their stay during travel. Airbnb is pocket friendly and allows customers to
gain a deeper insight about the local culture of the region. They may also get to experience living
with the locals.
This growth of Airbnb has been possible owing because of the advent of smartphones, internet
and technological awareness of people. The brand has allowed customer the convenience of the
book and has gained immense trust throughout the globe. Competitors for the brand are slowly
emerging in the market but it will take a long time for any other brand to attain the same level of
reach or disrupt the industry all over again.
Kindle
E-books have been a part of our industry since 1971. These books were downloadable and
people could read it on their computers. However, with the advent of Amazon’s electronic book
reading device, Kindle, the industry has entirely changed shape. Kindle was launched in 2007
and has been widely accepted across different demographics in the world (Gilbert, 2015). Kindle
has allowed users to enjoy the company of their favorite books on a 7 inch device. The device
can be adjusted in brightness according the atmospheric light.
Kindle has created a disruption in the book industry by providing users a single device to read all
their books. Digital disruptors use technology as a means to create commotion in a particular
industry by introducing new products and services that become widely acceptable in the market.
Amazon had a massive customer base even before launching the Kindle. This made it easier for

the brand to promote and push its new product to its existing customers (Striphas, 2010).
Moreover, the brand name and value of Amazon was high enough to instil trust regarding a new
product. Kindle has changed the reading experience for customers throughout the globe.
Ophthalmologists have been recommending the use of Kindle in order to prevent weakening of
eye sight by reading paper books.
Amazon has ensured that it would continue to manufacture tens of millions of kindles annually
in order to satiate consumer demand. This disruption has provided numerous benefits to
customers and this is why the number of Kindle users continues to grow. Kindle edition of books
are much cheaper than paperbacks or hard covers. Moreover, a predominant benefit that Kindle
provides is that of space. All the books that a user wishes to read are stored in a small device.
This allows the user the convenience of carrying multiple books while they are traveling.
Sony had also introduced a device for customers to read books. However, the major difference
Kindle that Sony’s device was the pricing and penetration strategy of the brands. Amazon had
introduced Kindle to increase the number of its prime subscribers and sell electronic books. On
the other hand, Sony’s primary intention was to generate revenue from its E-readers.
The timing of Kindle launched also supported the growth of the product. At that time, people
were accepting technology and understanding various benefits associated with it. Ecommerce
was growing and people had built an immense amount of trust in Amazon as a brand. Also the
freemium pricing strategy adopted by Amazon also helped Kindle’s case. Freemium pricing
strategy refers to pricing the product in such a manner that the basic services are free while the
premium services are charged for.
Kindle has clearly changed the way people read books and there is no denying that it has
impacted the hard book market (Loebbecke et. al., 2010). Kindle has pushed the envelope to a
great extent and it is here to stay. Even though, the technology is largely disruptive in nature, it is
extremely difficult for the product to eradicate the physical book market. However, the product
has clearly established a new industry for itself and is largely impacting consumer behaviors,
attitudes and preferences.

Netflix
Netflix is an entertainment company launched in The United States of America. The brand is a
streaming giants which has a membership of 125 million users across the globe. Netflix produces
new content and along with that offers people a platform to watch existing content including
movies, TV shows, documentaries and interviews. The service is a major disruption in the
entertainment industry as it is has allowed customers to watch interesting and grasping content
while sitting at their homes for a monthly membership fee (Adhikari et. al., 2012).
People do not need to go to movie theatres or wait to download movies or TV shows. The
platform has a large number of movies and shows spread across various genres. People can
download the Netflix mobile application or use the website to watch their favorite TV shows and
movies. At a single point of time, four users can log on to a single membership ID. Netflix has
disrupted the entertainment industry by providing users with grasping TV shows that are highly
entertaining, unique, creatively curated and effectively targeted (Mithas & Lucas, 2010).
Netflix’s disruption has created waves around the world to the extent that ‘Netflix and chill’ has
even being used as a slang to hook up.
There are two predominant reasons behind the success of Netflix. The first one being the quality
of the content broadcasted on Netflix. People spend long hours on Netflix owing to the strong
content offered by the brand. TV shows like Stranger Things, House of Cards, Black Mirror, The
Crown and 13 reasons why have been prominent in establishing Netflix popularity across the
globe. Once the shows and other content off Netflix gained attention, Netflix gained more
followers. This has been a major reason behind the success of the model despite its premium
pricing strategy (Nagle et. al., 2016). Secondly, Netflix expanded to the film business in 2013
which is when the technology usage was growing rapidly. This growing technology allowed
Netflix to reach out to a large number of people and also allowed customers to easily accept an
online platform to view movies and TV shows.
As long as Netflix continues to curate content which fulfills customers changing needs and is
largely unique then the brand will also continue to grow and enhance its member base. The
disruption caused by Netflix has completely transformed the entertainment industry and allowed

the growth of other online platforms as well which connects users to movies and TV shows from
across the globe.
Conclusion
Digital disruption refers to any form of disruption caused via digital mediums and impacts the
value offered by products and services. Digital disruption brings along a new wave of revolution
which impacts different industries from the globe (McQuivey, 2013). The launch of smartphones
in 2000 and later changed the consumer electronics industry by offering numerous benefits
which did not exist until before. Uber taxi service also created a platform to connect thousands to
drivers with millions of customers across the globe. The brand created disruption in the taxi
industry and established a solid presence throughout the world.
Airbnb also bridged the gap between property owners and property renters and changed the
hospitality industry game by offering people inexpensive accommodation options offering an
enriching local experience. Kindle grew by offering people a better alternative to reading books
by allowing them to store thousands of books in a single device and giving them the convenience
of reading books in a suitable manner. Lastly, this report has also thrown light upon the
streaming giant Netflix which disrupted the entertainment industry by collecting varied content
and posting it on a single platform and making it accessible to viewers from across the globe.
Besides these as well, there are various organizations that have digitally disrupted the industry
within which they operate. Snapchat also got a jump onto the mainstream media by distributing
content on platform as a service infrastructure (Bughin, 2017). The increasing use of Fitbits have
transformed the fitness industry. This revolution was brought upon by Fit Inc. which led to an
increased amount of self-monitoring of health (Baalbaki et. al., 2017). Every digital disruption
faced some resistance to begin with. However, Digital disruptions are important for the growth
of individual lifestyles, industries and overall economies. Hence they must be welcomed with
open arms and appreciated for their contribution in the society.

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