Expansion of Netflix into Western Europe

Summary

This article features US-based online subscription television shows and movies service provider, Netflix’s plan to expand into Germany, France, Austria, Belgium, Luxembourg and Switzerland this year (Edwards 2014). Europe’s wide broadband penetration coupled with strong middle class and efficient billing systems poised as an attractive market for Netflix. Netflix also understood that to successfully penetrate across the target markets, they would need to tailor their online content library according to local cultural. The company’s previous expansions had been successful in-lined with their goal of attaining global online dominance (Edwards 2014).

Application of concepts

Netflix is a classic example of ‘Disruptive Innovation’ as it illustrates how a technological vision transformed the industry (Halal 2012). As characterised by Christensen (2008), disruptive innovation disrupts the trajectory by initially providing an inferior performance to existing product and serving a market segment that was not or could not be attended before. The uprising of Netflix disrupted and exerted tremendous pressure on Blockbuster Inc. which eventually filed for bankruptcy (Zalewski 2013). Netflix primarily falls under Radical Change in the Trajectories of Industry changes since core assets and core activities of the business are constantly under challenge (McGahan 2004).

As the entire business model of Netflix surrounds the internet technology, increasing risks of malicious access from external hackers and phishing scams may result in damages of the company’s reputation and dampened growth rate due to customer’s cautiousness (Clough 2011). A common form of social engineering technique known as ‘Pretexting’ invents a scenario to influence vi...

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