disruptive technologies – a closer look

Kannan Subbiah

Principal Consultant, Blu Bricks Consulting

Disruptive Technologies – A Closer Look

ContextDisruptions stories of the pastThe Theory behind itSurviving Disruptions

Potential Disruptions

Q & A

Agenda

Disruptions are good for customersBrings cheaper productsBetter products

Does the job effectively and efficiently

But they disruptEstablished companiesMarket of well settled product(s)

Happening a lot quicker

Not all innovations are disruptions

Context

Disruption stories of the past

Was the Apple of the last century

Quick FactsFounded in 1892 by George EastmanInvented the first photographic film in roll formAdded to Dow Jones in 1934Accounted for 90% of film sales and 85% of camera sales in 1976Employed 145,000 in 1988Pioneer in digital camera with first megapixel prototype in 1975

KodakYou press the button, we do the rest

What went wrong?A Paradox between logic and creativity in strategyHeavy dependence on films and progressively less attention on the equipmentAvoided risky decisions and maintained status quoLacked the frame-breaking GTP approachChange came in too late in 2003

Kodak

What went wrong? A Paradox between Revolution & Evolution

Market signals came as early in 1981 (Sony’s filmless digital camera)Found hard to believe in something that was not as profitable as filmsDigital age necessitated a Revolutionary change, but Kodak did it too slowly , too late

Kodak

What went wrong?A paradox between Markets & Resources in strategy

Took a market based view (MBV) as late in 2003 to broaden its digital presenceBut, the market change was rapid there afterKodak’s core-competency in the digital photography value chain was very little.

Kodak

Was once the leading mobile company

Pioneered many innovationsOwn operating systemRole in development of GSM & SIM technologiesEarns Euro 400 million in royalties from competitors

Was late in responding to the smart phone disruption

What went wrong?2004: Citing risks of failure, did not pursue the development of smartphones.Has missed the disruptive innovation that opened up new customers & Markets.

NOKIA

First mover with instant streaming advantage

An attempt to survive disruption

A case of self disruption

Decoupling of DVD and streaming services in terms of pricingWhat went wrong?

Not separating the pricing earlier

Not re-branding the streaming as a separate business

Not adding a streaming rental service

Netflix

The Theory behind it

Definition of Disruption:the act of breaking regular flow or continuity of something; disturbance; a disorderly outburst or tumult; dislocation, especially an event resulting in dislocation or discontinuity

Clearly to be disruptive, something has to disrupt the status quo.

Certainly a disruptive innovation should minimally cause a market disturbance.

it needs to succeed at obsoleting a product category altogether.

What is Disruptive Innovation

Offers inferior outcome in the beginning

But has an extendable core within it

It is adopted by an underserved or not served market

It follows a pattern and could happen to any one

Decimates the market share of large incumbents in few short years

Comes almost from where it is least expected

Incumbents are unable to respond to the competition

Usually a technology innovation is present, but not always

Characteristics

With ITThe disruptions are inherentCatching up like a viral diseaseBrings impacts in unrelated industries as wellIt is the application of technology that disrupts and not the technology itselfMobility is bringing in a wider disruption

IT – an enabler of disruption

Performance of Disruptive Technology

Short video

It is a Catch up game

Surviving Disruptions

See it comingSingle event than a processSome times quickly and completely, and other times slowly and incompletely

Are you among the targets?An opportunity / risk?Not just a price competition

Sustain the innovation

Understand the dynamicsThe business modelThe purpose vs. the customersBarriers for the disruptorThe advantage mattersKeep a watch on the changes

Sustain the innovation

Setup the right structure

Be a Distruptor

Dilute stakeGo publicRope in private investors

Merge

Be acquired

Sell

Liquidate

Plan the exit

LEAPS Strategy

Listen Start with yourself, Not the market

Explore Go outside to stretch the inside

Act Take Small simple steps, Again and Again and Again

Persist Take the surprise out of failure

Seize Make the journey part of the (Surprising) Destination

Leading Disruptive innovation

Disruptive Technologies ahead

1. Post PC devices

2. Mobile Applications And HTML 5

3. Personal Cloud

4. Enterprise App Stores

5. The Internet Of Things

Futuristic Short Film by Sight Systems

Vision of the future

Meeting the Challenge of Disruptive Change by Clayton M. Christensen and Michael Overdorf

Disruptive Confusion Unravelled by innovativedisruption.com

Surviving Disruption by Max Wessel and Clayton M. Christensen

The impact of Disruptive Technologies on Designated organizations within the IT industry in South Africa by A.C. Windell

References

Q & A

Thank You

My Contact Details: Email : kannan@kannan-subbiah.com

: kannan@blubricksconsulting.comLinkedin : http://www.linkedin.com/in/ksubbiahTwitter : @kannagoldsun