Are Optical disks (CD/DVD/Blu-ray) out of Business?

Published by MBA Skool Team, Published on June 07, 2014

May be everyone accepts that the Optical Disk industry is out of business but I do not just for the simple reason that I have questioned myself the following

1. How does a company give its software to the customers in a physical form?
2. How does a book publisher provide the required software to the students?
3. How do you save the data that for future use, without messing up your computer space?
4. How does Microsoft provide its customers with the Windows 8 version of OS?
5. How does one gift a favorite movie to one’s friend?

image:Michelle Meiklejohn,

The answer to all the questions above would be only one thing and that is an Optical disk. All the mentioned points may not be answered with any other product.
Let us analyze if the Optical Disks can be replaced with the following products

1. Book: Cannot store huge amounts of data, an executable file cannot be transferred to a final customer through a book (print version)

2. Cloud/ Network: It has a security threat whereas a physical product would always bring a smile and sense of bliss in the customer.

3. Solid state storage devices: Let us take an example of a pen drive. A pen drive is a wonderful device to store a volatile or temporary data. What if you need a product to store your data that is just readable and a product that ensures safety of your data?

Customer is not only worried about the safety of his data but he/she is also worried about the durability of the disk that stores the data.
One good solution is manufacturing disks that have greater durability. Technology keeps on changing, you may need to upgrade your drive from Compact Disk drive to a DVD Disk drive later and at the Yippee moment you come to know about the Blu-ray technology. One more reason Blu-ray drives are not being used is that they are expensive and a pen drive can fulfill the requirement.

Who ignores a disk of OS provided by Microsoft or a disk that has the software they need. Customers are in need of them.

Steps to consider:

1. End customer is in the need of Optical Disk but may be they are unstated needs that are to be analyzed. The best solution would be to leverage the opportunities top firms have and communicate the same to the end customer through advertisements and targeted digital marketing.
Example of an unstated need: I have an important data that I do not use any further but I wonder what I shall do if I need it in near future. What if I need the data for retrospection? Ok, let me store this data, but how do I do it?
Possible solutions:

Hard disk: There is a risk of data getting deleted in case of hard disk as it is based on volatile memory
Pen Drive: Temporary data storage device, not a good option.
Optical Disk: A CD? A DVD? Yes, this is a wonderful option. Ok, let me choose the brand that provides the best durability. I can write my data on the disk, store it and forget about it.

2. Here the economies of scale concept might work, the requirement has seen a drastic fall in the market for Optical Disks but the customers who possess the above mentioned needs can be targeted all around the world.

For example, the following may be targeted:
a. Text book publishers who are in need of Optical disks to provide a software in support of the concepts explained
b. An operating system provider who needs a disk to give the software in physical form to the end customers
c. A leading software company to sell its software product
d. End users who intend to save important information which is of future use

A company can sustain by focusing on the minute needs of customers and leverage it to the maximum extent; it takes a bit of determination and commitment to succeed.

The article has been authored by Srinivas Amara, FORE School of Management, New Delhi.

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