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10.03.2016 1 Disruptive Innovation The Future of Business or A New Name for a Classic Process? Christopher Muller, Ph.D. Hamburg 10 March, 2016 The Big Idea

Disruptive Innovation - INTERNORGA...10.03.2016 4 2015 Physical CD, LP 20% Synchronized 3.0% Permanent Downloads 40% Ring Tones 1.0% Streaming 32% Disruptive Innovation A term of art

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Page 1: Disruptive Innovation - INTERNORGA...10.03.2016 4 2015 Physical CD, LP 20% Synchronized 3.0% Permanent Downloads 40% Ring Tones 1.0% Streaming 32% Disruptive Innovation A term of art

10.03.2016

1

Disruptive Innovation

The Future of Business or

A New Name for a Classic Process?

Christopher Muller, Ph.D.Hamburg

10 March, 2016

The Big Idea

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“Changes in Society Lead to Changes in Business.”

Creative Destruction

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Changing HardwareSame Software

1980

LP/EP 59.8%

Cassette 19.1%

8 Track 14.3%

Vinyl Single 6.8%

35 Years of Music Purchases

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2015

Physical CD, LP 20%

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Disruptive Innovation

A term of art coined by Clayton Christensen,

that describes a process by which a product or

service takes root initially in simple

applications at the bottom of a market and

then relentlessly moves up market, eventually

displacing established competitors.

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To Disrupt: shatter, separate

forcibly; interrupt flow or

continuity

To Innovate: bring in

novelties: make changes in;

make new, alter

The Nature of

Disruptors and

Sustaining Incumbents

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The Innovator’s Dilemma Dr. Clayton Christensen

Disruptive Innovation:New technologies and

business models, or old

technologies in new ways

Sustaining Innovation:Improving existing products

and technologies.

thrive most often when

they are technically simpler

than the previous

generation.

Disrupters

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beat newcomers at step-wise innovations,

but lose when

simpler,

faster,

cheaper,

easier

entrants emerge.

Sustaining Incumbents

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New Market DisruptionCompete against nonconsumption

Low-end DistributionLow price in saturated market

Sustaining TechnologyBetter product in established

markets

Time

Pe

rfo

rma

nce

/Pri

ce

Time

Ne

w P

erf

orm

an

ce M

ea

sure

s

Most demanding

customers

Least demanding

customers

THE DISRUPTION EFFECT

Discontinuous Change

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Disrupting Your Own

Model

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Uber vs. AirBnBSustaining or Disrupting?

“…simpler,

faster,

cheaper,

easier?”

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Uber EATS

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From the Fringe to the

Main Stream

Social Convention is where full market potential is realized

The Next Big Thing is where latent market potential begins to

expand

The Realm of the Cool is where it gets its first media coverage

The Edge is where the innovation builds its first audience

The Fringe is where innovation is born

The Devox

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Disruptive Innovation in

2016

The Next Wave Goes

“Mainstream”

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1- Be clear about your business

and your market.

Three Steps For

Avoiding the DisruptionUrko Wood, Strategy Innovations 2015

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2 - Understand the disruptor’s advantage

and your own

Three Steps For

Avoiding the Disruption

3 - Continually scan the environment for

emerging technologies.

Three Steps For

Avoiding the Disruption

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“Just before it comes into existence every business is an opportunity that someone else has seen.”

Edward de Bono

“I never failed to see an opportunity once it had passed me by.”

Mark Twain

Disruptive Innovation

The Future of Business or

A New Name for a Classic Process?

Christopher Muller, Ph.D.Hamburg

10 March, 2016