Revisit the two “Blockbuster” cases we discussed in class and answer the following two questions based on the case readings, that week’s quiz, and MCS:
a. Was DVD a disruptive technology? Why or why not?
b. Building on your answer to (a) would the DVD technology have been expected to result in the demise of the incumbent? Why or why not?
The DVD itself was not a disruptive technology. Although it was an innovation, it did not change the way business was done in the video-rental industry.
To be disruptive, a new product must drastically change how the industry operates. The DVD was innovative and created customer value (for example it offered customization with languages, scene selection and captioning) but the established industry continued to operate in the same way as before. To be defined as a disruptive technology, the DVD would have had to change the entire video-rental industry- which it did not. The video-rental industry still operated from brick-and-mortar retail spaces and relied on revenue sharing agreements with the major movie studios.
Instead, the DVD can better be described as a sustaining technology which is “a technological …show more content…
Netflix was a new innovation (mail order DVD’s followed by streaming services) which changed how the industry operated. Instead of going to a brick-and-mortar store, consumers could simply ordered off of their computers and it would be delivered in the mail. In addition, Netflix changed the profit structure and costs of the industry. Netflix did not have to order expensive, newly released movies but could use their “proprietary recommendation system” (Netflix, p. 5) and filter to only show customers movies that they might be interested in that were currently in stock. This revolutionized the video-rental industry by using data to understand and analyze customer preferences while taking advantage of a built in way to monitor supply and
a. Was DVD a disruptive technology? Why or why not?
b. Building on your answer to (a) would the DVD technology have been expected to result in the demise of the incumbent? Why or why not?
The DVD itself was not a disruptive technology. Although it was an innovation, it did not change the way business was done in the video-rental industry.
To be disruptive, a new product must drastically change how the industry operates. The DVD was innovative and created customer value (for example it offered customization with languages, scene selection and captioning) but the established industry continued to operate in the same way as before. To be defined as a disruptive technology, the DVD would have had to change the entire video-rental industry- which it did not. The video-rental industry still operated from brick-and-mortar retail spaces and relied on revenue sharing agreements with the major movie studios.
Instead, the DVD can better be described as a sustaining technology which is “a technological …show more content…
Netflix was a new innovation (mail order DVD’s followed by streaming services) which changed how the industry operated. Instead of going to a brick-and-mortar store, consumers could simply ordered off of their computers and it would be delivered in the mail. In addition, Netflix changed the profit structure and costs of the industry. Netflix did not have to order expensive, newly released movies but could use their “proprietary recommendation system” (Netflix, p. 5) and filter to only show customers movies that they might be interested in that were currently in stock. This revolutionized the video-rental industry by using data to understand and analyze customer preferences while taking advantage of a built in way to monitor supply and