your suggestion and comment are welcome. If you want this PPT , write to me at 11jgbs-sgunjan@jgu.edu.in

1. Disruptive Technologies:
Catching the wave
Presented By Group – 4

2. Refreshment
What is Disruptive Technology?
”The processes and incentives that companies use to keep focused on their
main customers work so well that they blind those companies to important
new technoloAny new technology that is:
- significantly cheaper than current, and/or
- is much higher performing, and/or
- has greater functionality, and/or
- is more convenient to use
Revolutionary, not Evolutionary
Used to be called “Killer Apps”gies in emerging markets.”

3. Examples of Disruptive Technology
Past Future
Electricity
Combustion Engine Nanotechnology
Telephones Web Services
Computers Collaboration Software
Airplanes Cloud computing
Plastic
Birth Control Pills
Internet

4. Difference
Disruptive Sustaining
1. New entrants
2. Not customer driven
1. Current industry leaders
3. Not market driven
2. Listen to their customers
4. Radical change
3. Incremental change
5. Short sales cycle
4. Financial infrastructure
6. Smaller profit
5. Long sales cycle
7. Upset industry Vs 6. Fear of cannibalism
hierarchy
7. Aristocratic
8. Wide impact
9. Democratic
Examples: Examples:
3.5” hard disk dive- Corner 5.25” hard disk dive- Seagate
Mini computers Mainframe computers- IBM
Table top small copier – Cannon Large photocopier - Xerox

5. Dilemma
The Innovator’s Dilemma
- It performs worse in one or more areas, but is typically simpler, more reliable, or more
convenient than existing technologies.
- Its performance trajectory is steeper than that of existing technologies.
- It is less profitable than existing technologies.
- Leading firms' most profitable customers generally can't use it and don't want it.
- It is first commercialized in emerging or insignificant markets.
- Large organizations are fundamentally incapable of successfully bringing it to market.

6. B&C argue
Technologies that damage established companies are not radically new or
complex, but:
1) They present a different package of performance attributes that are nor valued by
existing customers.
2) The performance attributes that are not valued, improve at such a rapid rate the
new technology can later invade the established markets.

7. Performance Trajectories
The rate at which the performance of a product has improved and
is expected to improve in the future.
S - Curves (product performance - vertical axis & time/effort - horizontal axis).
Every industry has a critical performance trajectory (e.g. Photocopiers - no. of copies per
minute).

8. Bower and Christensen put forward a two-pronged approach to dealing
with disruptive technologies.
Approach -1
Senior executives must be able to spot new technologies that fall into this category : –
i.e., ’different’ packages of performance attributes able to evolve rapidly to the point
where they can successfully invade established markets.
Approach -2
For these new technologies to be commercialized and established, they must be
protected from processes and incentives geared to serving established customers –
i.e., housed by organizations that are completely independent from the mainstream
business.

9. It is not enough to identify and track a new
technology. Management should also:
Determine whether the technology is
disruptive or sustaining.
Who supports it and who doesn’t? (Conflict of marketing and finance vs. key
technical staff often indicates a disruptive technology that should be explored).
Identify its strategic significance.
Ask the right questions (about functionality & demand) to the right people –
not current lead customers
Locate initial markets for the disruptive technology.
Instead of market research, information on new markets should be generated
through rapid, iterative, and low-cost experimentation with both products and
markets.

10. Placing responsibility for building a disruptive
technology business in an independent organization
(or ’skunk works’) should be done for the right reasons.
For example,
one should not isolate a team of engineers in order to develop a sustaining technology,
even though it may be a radically different one.
Creating a separate organization is only necessary when:
• The disruptive technology has a lower profit margin than the mainstream business, and
• Serves the unique needs of a new set of customers.
Locate initial aWhere these conditions are met, though, the disruptive organization should be
kept independent. Folding a commercially viable markets for the disruptive technology.
Folding a commercially viable disruptive spin-off back into the mainstream organization
can be diasastrous.

11. Bower and Christensen state their strategic advice
on ’prospering at points of disruptive change’ as
follows:
The key principle is not simply to
Take more risks,
Invest for the long term
Fight bureaucracy
Rather, success depends on managing strategically important disruptive
technologies in an organizational context where
Small orders create energy
Fast, low-cost forays into ill defined markets are possible, and
Overhead is low enough to permit profit, even in emerging markets

12. Thank You