Leveraging capabilities in a disruptive environment

Leveraging Capabilities in a disruptive

environmentDr. Sandeep Kulshrestha

Some key words used in this presentation

Leverage: Gaining benefit Disruption: Separation/Division into parts (Ref:

Dictionary.com) Capabilities: A firm’s ability to gain competitive

advantage Competencies: Specific skills and experience in

the market where the firm is operating. Eg: Delivery of Pizzas by Dominoes

Organizational Capability

focuses on internal processes and systems for meeting customer needs

creates organization-specific competencies that provide competitive advantage since they are unique

ensures that employee skills and efforts are directed toward achieving organizational goals and strategies

Traditional Sources of Competitive Advantage

Economic / financial capability: able to produce good or service at lower cost than competitors

Strategic / marketing capability: products or goods that differentiate a firm from its competitors, typically by “adding-value” or “product-portfolio mix.”

Technological capability: products or services that customers receive are innovative, high-quality, state-of-the art, typically in how they are built or delivered.

Organizational Capability and value for customers

1) Responsiveness: the ability of the business to understand and meet customer needs more quickly than competitors

2) Relationships: the ability of a business to develop enduring relationship between customer and employee

3) Service quality: the ability of business to design, develop and deliver service that meets or exceeds customer expectations.

Disruption in the strategic process

An innovation/practice that creates a new market by applying a different strategy, which ultimately overtakes an existing market.

It can be technological as well as marketing linked

What Disruptions do

Disruptions in the business environment cause economic shifts that destabilize industries, companies, and even countries

(Harvard Business Review)

Disruption…..

Opportunityor Threat

Disruption as a threat

For firms who don’t change their strategies to cope up with disruption, it is a threat

Disruption as an Opportunity/Leverage

For firms which are; Adaptable Flexible Risk taking Innovation oriented Employee friendly Resourceful Technology Friendly

Examples of disruptive strategies

Air Deccan started a Airfare of Rs 1 + Tax in the year 2005, creating disruption in the civil aviation sector

Citibank was the first bank in India to offer credit cards in early eighties

Maruti 800 changed the shape of the market. Premier Padmini was out of market within no time.

Disruptive Changes

Technology Business Strategy Industry Dynamics Globalisation Outsourcing Political and Regulatory Environment

How to leverage from a disruptive environment

Learning from the market Expanding horizons Identifying the probable disruptions Selecting new ideas Turning new ideas into opportunities Reducing risk by entering into related industry Technological as well as marketing

collaborations