Disruptive Innovation
10 important questions on Disruptive Innovation
What is the definition of disruptive innovation? In which two ways can it increase customer perceived value?
Disruptive innovations increase customer value in at least one of the following ways:
1. New performance dimension
2. Less expensive solution
Why do big firms miss out on disruptive innovations?
- Companies depend on customers and investors for resources.
- Small markets do not solve the growth needed for big firms
- Markets that do not exist cannot be analyzed.
Firms get locked into value networks and thereby miss out on disruptive innovations
How should big companies challenge the traditional rules?
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How can value network lock-ins be avoided? (how to be disruptive)
• Be open to reconsidering the definition of value to customer.
• Experiment with new applications and new customers to capture changes in customer utilities.
• Adapt the business model to fit with the new potential values provided by technology.
• Listen to both R&D, manufacturing, and marketing & sales.
• Use structured creativity tools to capture emerging trends and challenge ingrained thinking.
• Search for innovation ideas in new places.
What are critical tasks when introducing disruptive innovations?
Redesign the value network --> exclude and/or include actors
Align incentives
--> Address changing competence needs by providing training for other actors
--> Modify the revenue model
An example of a business value curve is given in the lecture. (cosmetics)
ERIC can help you to redefine the business value curve and be disruptive. Explain ERIC
Reduce
Increase
Create
Identify value --> create value --> capture value
In order to be disruptive, customer values need to be expanded or addressed differently. Name 2 ways for figuring out new ways of bringing changed value to the customer.
The buyer experience cycle -->
• What is important before, during and after using the product - what if it is taken away?
• Can we change the order of the steps?
• Where can our knowledge in the different steps be useful besides in the existing products?
• What does this cycle look like for other products and services?
Next to being locked in the value network, what are other explanations of established firm's innovation failures?
- Architectural innovations
- Local innovation search
- Mental models and dominant management logic
- Value of complementary assets
- Competences as routines
- Core rigidities and core in-competencies
What are the three main things which determine a Company's (innovation) capabilities?
2. Processes
3. Values (e.g. gross margin values or how big a opportunity needs to be before it is interesting)
How can big companies meet the challenges of disruptive innovations?
1. New organizational structures
2. Spin out
3. Acquisition of small company with the right processes and values for the task.
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
