Disruptive Innovation in Entertainment: Netflix Case Study

This research project delves into the disruptive innovation of Netflix within the entertainment industry. It explores the core concepts of business innovation, examining how companies like Netflix leverage these strategies for growth. The study investigates Netflix's disruptive innovation through the lens of innovation theoretical frameworks, analyzing its business model, value propositions, and customer segments. The project also identifies the ways in which Netflix has transformed entertainment consumption patterns, offering insights into its market strategies and competitive advantages. The methodology includes a literature review, focusing on key themes such as Netflix's business model, competitive strategies, and the impact of its innovations. The findings highlight Netflix's success in disrupting the traditional entertainment landscape, providing a detailed analysis of its strategies and their effects on the market. The conclusion summarizes the key insights, recommendations, and potential areas for future research, offering a comprehensive understanding of Netflix's impact on the entertainment sector.

Research based Project Essay

Table of Contents
TOPIC..............................................................................................................................................2
SECTION 1- INTRODUCTION.....................................................................................................2
Purpose of the study.....................................................................................................................2
Background of the study..............................................................................................................3
Aim and objectives......................................................................................................................3
Research questions.......................................................................................................................3
Rationale of the study..................................................................................................................4
Structure of the study...................................................................................................................4
SECTION 2- LITERATURE REVIEW..........................................................................................5
Theme 1: The concept of business innovation issue...................................................................5
Theme 2: Netflix’s disruptive innovation with the help of innovation theoretical framework. .5
Theme 3: The ways in which entertainment consumption has been changed due to Netflix.....7
SECTION 3- KEY THEORITICAL FINDINGS............................................................................8
SECTION 4- METHODOLOGY....................................................................................................9
Research Type.............................................................................................................................9
Research strategy.........................................................................................................................9
Research Design..........................................................................................................................9
Data analysis..............................................................................................................................10
Research limitations...................................................................................................................10
Ethical considerations................................................................................................................10
Finding/ Results.............................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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TOPIC
The disruptive innovation in the entertainment industry- A cases study on Netflix.
SECTION 1- INTRODUCTION
Purpose of the study
Innovation has always become the most significant element for the growth and expansion
of any company or even any industry. Innovation is the thing which helps the company to drive
successfully and this must be their integral part of business strategy. Disruptive innovation
includes lower performances in various key features that are recently highly valued by the
market (Salvador, Simon and Benghozi, 2019). Companies like Netflix must consider disruptive
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innovation approach in order to maintain the current market and continue to produce innovative
products to invest their efforts into future investments of niche markets that have the potentiality
to disrupt the market. And hence, it puts as a great example among all other companies. With the
help of this strategy, the Netflix has grown to be on the largest streaming video on demand
within the market space.
Background of the study
Netflix is the world’s leading internet network with various numbers of users or members
who are easily able to enjoy more than 150 million hours off TV shows and movies each day.
Nowadays, it is available worldwide and expanded into various countries. Netflix provide
services with a commitment that they are able to play, pause and resume watching, all without
commercials or commitments (Lindgren, 2018). But with lots of competitors, the Netflix have to
adopt disruptive innovation strategy in order to sustain their place and image within the market
space. This research is based upon various investigation tools and techniques that has been used
to evaluate the issue.
Aim and objectives
Aim
The aim of current investigation is to evaluate the extent to which disruptive innovation
affects the Netflix.
Objectives
 To develop understanding about the concept of business innovation issue.
 To access the Netflix’s disruptive innovation with the help of innovation theoretical
framework.
 To identify the ways in which entertainment consumption changed due to Netflix.
 To recommend appropriate strategies in which Netflix can gain and maintain their market
share among other competitors.
Research questions
1. What is the concept of business innovation issues?
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2. What is Netflix’s disruptive innovation?
3. What are the ways in which entertainment consumption has been changed due to Netflix?
4. What are the strategies through which Netflix gain and maintain their market share?
Rationale of the study
The primary reason behind conducting this research is to evaluate the disruptive innovation
among the Netflix. This in turn recognised as research issue because now a days there are
various companies available within the market space who are providing similar kind of services
to their consumers (Fagerjord, 2019). It is an issue now because, as per current scenario, the
company requires innovations into their products and services in order to sustain or maintain
their brand image in front of their competitors. Thus, with the help of thematic perception
technique, this report will elaborate the concept in detailed manner.
Structure of the study
The study has been divided into certain stages which include:
 Introduction: This is the primary section which facilitate in developing of research aim,
objectives and questions as per the title of the report.
 Literature review: This is the second section that assists in order to collect secondary
information from diversified sources that are journals, books and other publication
research reports.
 Key theoretical findings: This is the third section which is based upon the findings
which has been evaluated on the basis of literature review into detailed manner.
 Research methodology: It is important as it involves varied methodologies that turn to
impact in order to get different outcomes. The methodologies involved are research
philosophy, approach, data collection, type and many more.
 Findings and results: This helps in interpreting the final gathering of the data that is
being used at the time of doing the research or study.
 Conclusion and recommendation: This is the last section in which the accurate
information regarding the examination as been done into systematic manner. Moreover it
also involves limitations, suggestions and implications of research.
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SECTION 2- LITERATURE REVIEW
Theme 1: The concept of business innovation issue
As per the views of Palmore, (2022) business innovation is when companies implement
new processes, services, ideas and products with an intention to boosts up the bottom line of the
business. It means to launch new and improved products and services which can help the firm to
get higher revenue margins, making existing procedure more effectual or even have the power to
resolve current business problems which actually cuts down the costs as well as save the time
also. With the help of innovations, the companies are able to getting ahead of potential disruptors
or changing consumer’s demands. In general there is various business issues faced by the
companies which involves lack of innovation strategy. There are various activities that
companies launch in order to stimulate the attention of the senior management in order to obtain
the significant endorsements for large initiatives in which the whole difficulty lives.
In views of Anton, (2018) absence of collaboration is another innovative issue that has
been faced by companies as the set of skills and expertise have the capability to drive innovation
at the workplace. In order to resolve them, the companies have to create an appropriate
workplace layout along with adopting effectual management style which helps them to gain
effectual environment that welcomes the suggestions as well as ideas of employees. Inadequate
consumer attention also acts as one of the most significant issue which hinders the innovative
part of the company and requires urgent modifications by adopting suitable innovative practices
into the firm. In order to build so, the management people have to listen to their view points with
great level of empathy and emotional intelligence which allows them to genuinely meet their
employees as well as consumers requirements as innovation is the one which makes sure about
the fulfilling the consumers demand in most responsive manner. Moreover, it has also been
advice that companies who search for solutions instead of issues are the ones who appropriately
able to handle the situation into most positive manner. By focusing over the positive aspects of
the business helps them to addressing the problems that drive the appropriate development of the
brain to provide suitable solutions to the management.
Theme 2: Netflix’s disruptive innovation with the help of innovation theoretical framework
The Dieck-Assad, (2022) states that the idea of disruption has been generated by
providing appropriate attention of the companies. The concept has been originated when hard
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disk market leaders fails to compete with new entrants. Moreover, with this, the new idea has
been incurred which introduces that emerging technologies have the power to outline emerging
technologies that can generate a new market or fundamentally alter an existing one. Moreover, it
has been evaluated as a phenomenon which successfully enable the company to convert a
product or services which was earlier expensive and complex in nature in order to making them
cheaper and more accessible to the wider audience.
As per Kapoor and Klueter, (2020), there are five essential attributes within which an
innovation must possess in order to define as disruptive are that the innovation is under
performing in context of features that are expected by mainstream consumers, it offers new
attributes but which are not originally appreciated by the mainstream segment, the new
technology is usually easier and less expensive than the existing one, once introduced, the new
entrants target the low end of the market in specific price conscious and non-sophisticated
segment as well as further advances over time enhances its performance, enough in order to meet
the consumers major needs and attracting great volume of users. The concept of Netflix
disruptive innovation has been explained with the help of business canvas model according to
which Baiyere and Hukal, (2020) elaborates that this is a subscription based model and a
streaming platform which provides on demand videos to their users. In general the model is
based upon the nine elements which have been explained in detail below:
1. Netflix consumers segment: the platform of the Netflix has been designed in order to please a
wide range of customers for which the catalogue of the company covers various titles
through which they can able to entertain their most of the users of all ages. For this, the
customer segmentation for them is highly on the basis of usage and geographical but only in
order to verify the type of content that works well for each audience.
2. Netflix value propositions: the entire value proposition of the Netflix is linked with the fact
that the company is highly able to provide appropriate quality entertainment to their users all
across the world (Harries, 2021). Moreover, they also able to offer personalised lists and
recommendations which are based upon the content along with having a facility to have
personalised account of each member of the family.
3. Netflix channels: The own website of Netflix are their main channels along with their
prescribed application. Apart from this, the Netflix also invest into online as well as offline
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advertising and take advantages of social media along with getting benefits from word of
mouth publicity.
4. Netflix customer relationships: the customer relationship has been prepared on their personal
platform as it is user friendly and allows their users to configure it in the way that best suits
them. The company uses platforms such as Instagram, LinkedIn, etc. to update their
audience about their new releases and promotions.
5. Netflix revenue stream: The subscriptions are the major revenue generation stream of the
company.
6. Netflix key resources: The human and digital resources are their major key resources among
them they have various content library, software developers, filmmakers, the studios, etc.
that has been developed in order to support their own creations.
7. Netflix key activities: Offering best streaming content experiences to their users are their key
activities along with investing into the technology as well as hiring and retaining the talent in
order to keep their platform running at high performances. Moreover, they also advised to
become focus towards the appropriate content offerings.
8. Netflix key partners: The Company has various key partners among them media producers
and TV networks stand out which provide license to their content to Netflix. The platform is
totally hosted over AWS along with various other investors and regulators.
9. Netflix cost structure: The cost structure of the company is huge in nature due to which the
company have to deal with bad cash flows in their initial years. Hence, the new business
model requires huge investment to reach at considerable position where the company stands
today.
Theme 3: The ways in which entertainment consumption has been changed due to Netflix
As per the views of Rodrigues and et.al., (2018) it has been identified that with the help of
innovation techniques, Netflix become the dominant company as well as on demand media
provider which provide subscribers to major number of consumers all across the world. With the
help of adopting various strategies that helps them to act as per the customer’s requirements,
along with by adopting again and again an approach which provides their efforts with the help of
trial and error methods. Moreover, the company adopts the ways to survive among their
competitors with the help of introducing new and advanced technologies by taking advanced
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innovations into consideration irrespective of issues faced by them. Apart from this Böttcher and
Weking, (2020) illustrate that with the help of listening to the users, the company is able to
identify the kind of trends that which they can stay. The company provide original content which
also assist them to fulfil the desires of their users and make them highly satisfied with the
services provided to them.
SECTION 3- KEY THEORITICAL FINDINGS
From the above report, it has been identified that the company adopts certain innovations in
order to make their business successful irrespective of various innovation issues faced by them.
The innovations assist the brand or company stand out from the rest as they make the company
unique and different from others. This activity provides an edge among the market to give
reasons to the users to shift over the products. In order to explain this in detail, the company
adopts 4P’s of innovation according to which the product innovation involves the providing
subscription based streaming services that allows the members to watch TV shows and movies
without having any commercials over an internet connected device. Moreover the users also
download the offerings in their iOS, android, or even in Windows as well. In terms of process
innovation the Netflix adopts appropriate changes into their corporate culture (Trusheim,
Cassidy and Bach, 2018). Their idea behind this is to have a progressive procedure which let the
company innovate and try new and advanced things for the betterment of the company. In
context of paradigm innovation, the company provides high performance foundations within the
culture of the company by increasing honesty among their employees by providing them
appropriate space to work accordingly. Moreover, the innovative part within this is reduced
controls over the employees which make them free to adopt new and innovative ideas in order to
perform their tasks within limited amount of supervision (Madewa, 2018). Furthermore, the last
is the position innovation, according to which in order to make the company highly position into
the market space, the company adopts innovative strategy which focuses towards hiring and
keeping only the best employees among the company at any cost as well as promote cador by
consistently taking feedbacks at all levels as well as providing company transparency.
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SECTION 4- METHODOLOGY
Research Type
Research is described as a careful consideration of study regarding a specific concern or
problem with the help of utilizing scientific methods. In general the researches are categorized
into two types such as Qualitative and Quantitative. Qualitative research is used to collect,
compare and evaluate the huge descriptive data. Within this the data has been gathered from
various methods which involves previous studies or with the help of gathering it with the help of
surveys, interviews or other ways to evaluate the data (Kerckhoffs, 2018). On the other hand, the
quantitative research is the method which expresses the collection of data over the basis of
specified tools and techniques with the help of utilizing statistics as well as computerized tools.
In order to complete this research, the qualitative research method has been chosen which
provide appropriate analysis over the disruptive innovation among the Netflix into most
successful manner.
Research strategy
It is a type of research methodology which provides complete direction of investigation
and includes the process of the study. There are various examples of research strategy such as
action research, case study, literature review, experiment survey, etc. (Ragas and Culp, 2021).
For the current investigation, systematic research literature has been chosen strategy which
involves the information collected from various previous research articles. The similar concept
or structure has been followed into this report as well. This helps the scholar to get detailed and
appropriate information related to the company into most suitable manner which also
successfully justifies the findings.
Research Design
Research design is framework of research methods which has been chosen or selected by the
researcher. The research design is consisted of two types: descriptive and experimental research
where the exploratory research design refers as it is used to clarify the problem of the research
(Onufrey and Bergek, 2021). However, the descriptive research design also refers to collect the
information in the systematic manner from which the company can be able to conduct the
research in appropriate manner. In the present study, the researcher is going to utilise the
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exploratory design as it provides the deep insights into the particular research subject and allow
the investigator to study new things.
Data analysis
Data analysis is a process which is used by the researcher to evaluate and analyse the data and
information collected in the definite manner. It makes easy for the researcher to evaluate the data
in effective manner from where the investigator can conduct the study effectively. There are
mainly two type of research data analysis named as thematic analysis and SPSS. The thematic
analysis refers as a method of evaluating the qualitative data which identify, analyse and
interpretation patterns of the data and information (Jiang, Mavondo and Zhao, 2020).
Alternatively, the SPSS data analysis is used while the quantitative research is conducting by the
researcher. In the present study, the researcher will conduct the thematic analysis it will deliver
the flexibility and wider range of analytical options
Research limitations
In the present research study, the investor has utilised the secondary method of the data
collection where the paid category of the books and journals are the limitation for the research to
conduct the relevant study.
Ethical considerations
An accurate set of rules and guidelines which is required to be necessarily adopted and
implemented by the researcher while conducting the research study. In this research, the research
is going to add the number of references which will ensure that the content has not been copied
from any other sources.
Finding/ Results
The present report has undertaken the research where it is describing the company named
Netflix innovation strategy and models which help them to develop and increase their business
and organisation at global level. The Netflix is delivering streaming videos which is purchased
by the people for their daily and routine entertainment. The company has developed the
disruptive type of innovation to build up their product and service at effective manner
(Khudoyberdievich, 2020). The term disruptive innovation simply refers as the process of
transformation expensive and highly sophisticated services where it has been sold to the people
at the affordable prices in broader population so that the people can be able to obtain and enjoy
the entertainment by using the Netflix services.
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The current study has been developed to identify the issue of business innovation which is
the important part and process to be acquired by the organisation in definite manner. It has keep
the focus on the particular topic innovation and why it is the important and significant factor for
the company to understand it in better manner and must apply to the company which will provide
the definite growth and development. Also, the report has contained the different models and
frameworks of the innovation which is required to be used by the Netflix organisation to resolve
their particular innovative issue and can rise up the growth and success of the company at higher
and successful level (Buheji, 2020). In the research report the secondary data has been utilised to
gather and collect the relevant information on the particular subject which help the researcher to
conduct the study in definite manner and can be able to solve the issuer of the organisation. With
the help of secondary research it help and support the investigator to collect the relevant
information from the past case studies and books and journals and also help the research to do
not spend much amount on the research areas and less expensive than the primary research
method. Also, it helps the investigator to not get difficulty by putting their additional efforts in
finding the information and data in appropriate manner.
In addition the report has also included the different types of innovation model as Business
canvas model which help the organization Netflix to adopt this particular theoretical model to
identify and solve the particular issue in the organisation (Najar and Dhaouadi, 2020).
Conducting this research on the company Netflix is important because the company is facing the
issue in developing their company innovatively at global level and should require to understand
the innovation models and frameworks which can suit the organisation working process and can
innovate the new ideologies, brand and service from which they will be able to attract the
boarder and wider quantity of the population to utilise the services which will enable them to
grow and develop at successful level.
During the research, the investigator has utilise the qualitative research type which helps
them to collect and gather the detail oriented information of the subject and can be able to
provide the effective results and outcome (Barbieri and Santos, 2020). The company has to use
the business canvas model for the appropriate and definite result and outcome which will foster
the company growth and development at higher level. Thus, conducting this research study help
the organisation to identify the definite solution of the research from where the Netflix can be
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