by Rahat Noman
How modern office technologies can help to disrupt established industries.
Source: pixabay.com/ CoxinhaFotos
Why leading companies ignores the disruptive innovations.
Christensen and his colleagues observed that business environment of the market leading companies and their existing processes do not allow them to adopt new disruptive technologies due to fewer profit margins. They further observed one thing that the value network of the market incumbents put insufficient importance on the disruptive technologies in order to adopt this new innovation in the existing business model. The disruptive process of the new business entrants can take longer to develop and attract new customers. Once the new entrants’ successfully develop a new product or service as per the need of customers then it achieve the fast pace customer penetration which ultimately disrupt the market segment of the established incumbent market leaders. Further, the disruptive technologies can also be considered complex systems which include the business and technology related aspects.
The whole phenomenon of disruptive technologies works as we discussed that it initially enters the low-end or less profitable segment of the market. Over the time, it starts improving the performance and quality of the new product and then it attracting new customers from the main market that eventually enhances the profit margin of the new comer. Meanwhile, the new technology improves its performance and quality then it starts giving harsh competition to the market leaders. If these incumbent companies ignore the disruptive technologies then they have such potential to invade the well established and successful companies from the market. Other type of disruptive innovation is New-Market disruptive innovation that basically caters the totally new and emerging market segment which is not being served by the existing market incumbents or ignored customers segment of the market. The best example of new market disruption is mobile phones because in past there was not rivals of the mobile phones that created entirely new market.
Characteristics of disruptive innovation/technologies.
The concept disruptive technology does not mean that every low-end start-up posses it potential to disrupt rather it depends upon the competitive business model that have characteristics of disruptive innovation. These disruptive characteristics are as follows:
- Disruptive technologies mainly originate from low-end (less demanding customers) or totally new market footholds (where it caters to totally new customers).
- Disruption is a process, which is not a product or service that normally occurs from low-end segment of the market and eventually disrupt the mainstream market
- New start-up companies often posses a different business model than the incumbents.
- New firms do not attract the mainstream market customers until quality and performance meet the industry standards.
Examples of Disruptive innovation and technologies.
Technological disruptions reshaped the industries and market through their innovative capabilities. Here we will explain some examples of disruptive innovations that entirely displaced multi-billion market and industries. If we see the history of computer industry, many minicomputers, personal computer, Smartphone’s provided an alternative and inexpensive solutions to the customers that entirely changed the market. The second set of disruption comes in the sphere of data storage solutions such as different size of floppy disk drive disrupts the big size of hard disk drives. Moreover, the CD,s and USB flash drive disrupts the floppy drives and Zip drive. In the lighting industry Light-emitting diodes LED disrupt the old fashioned traditional light bulbs. Digital camera in the photography industry totally reshaped and disrupts the chemical photography, and meanwhile digital photography improved the quality and performance over the time. We can also see the many other disruptions in the manufacturing industry such as Hydraulic excavators totally displaced the old cable operated excavators, however cable operated excavator are being used in many developing countries. In the music industry we can see that digital synthesizer disrupt the market share of electronic piano and other instruments. In academia new entrant of past Wikipedia displaced the market leaders such as encyclopaedia Britanicca and Microsoft’s Encarta. The reason was that encyclopaedia Britanicca price was over $1000 that also possessed a physical weight for handling. On the other hand Wikipedia provides free and access to almost 6 million articles with updated information. We also have too many other examples related to disruption that happened in electronics and medical industry that totally displaces the old machinery and equipments such as ultrasound captured the market share of X-ray imaging
Why the concept of disruptive technology is important for managers and decision makers.
The emergence of new technologies that have innovative capabilities often reshapes the businesses and industries through their potential. In the last three decades, our world has invested and introduced so many new innovation and technologies to remain competitive in the market. Many researchers and decision makers of big organizations are focusing on the strategies to remain competitive in this age of technological disruptions. In the history when we closely observe the failure of big companies then we conclude that most of them were failed due to their delayed and ineffective response decisions in order to introduce new products or services.
Managers of the market leading organizations can develop such strategies where they should keep an eye on the entrant growth, if they observe that the new entrant posses a viable business model then they must begin to create the contingency plans such as to follow their business model or to create a separate organisation. The strategy for fast following and adopting new systems is very crucial and highly effective. We can see the example of Apple’s iPod market share that even did not invented the MP3 player but still it is the market leader in that segment. Apple’s example can also be fit the market of mobile phone even they are not inventors but still they are leaders in the market segment of the mobile phones. The success normally comes from the leveraging and continuous improvement in the existing business model that is the success story behind the Apple.
The managers of the incumbent businesses focus on their existing business with respect to new entrant, and meanwhile can do some surveys related to their current customers’ needs and preference. They also should keep one thing in mind that their organization already have sufficient resources, significant size and market experience in order to compete with early entrants that posses a disruptive threat. Many business managers avoid the change in their existing business because they feel uncomfortable to cannibalize the new business model in their existing business model. This is because they feel the fewer profit margins in the new business but it is also considerable that they can establish a separate entity in order to remain competitive in the new market.
How our NetTask HXA solutions can help businesses to remain competitive and market leaders.
Through analyzing the all above examples and scenarios we conclude that digital transformation by deploying the new system in an organization is important. Through analysing and identifying own systems for possible points of interventions and weaknesses, an organization can redesign its processes clearly focused on disruptive interventions. We also believe that every organization is facing continuous disruptive threats through their competitors. Our company NT Technologies GmbH provides many HXA products and solutions that can enhanced the efficiency of the organizations for better communication and management. Our HXA Room Booking Application and devices can provide the better solution for meetings, because timely managed meetings are beneficial for well informed decisions in order to compete with any external disruption. Our solution HXA cube provides the efficient use of work place that can help to arrange the small team meetings without any disturbance because we believe that fast pace changing business environment requires well managed private meetings without any external noise.
Overall, during the development of new products or service we always focus on the efficiency and collaboration of our clients employees. Our solutions are being used by many of industry leaders because while development of our product we also keep focus on the fast pace industrial disruptions so our client can formulate well informed decisions by using our gadgets.