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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
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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%
Synchronized 3.0%
Permanent Downloads 40%
Ring Tones 1.0%
Streaming 32%
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
