Disruptive Innovation Flashcards
What did Clayton and Christensen study?
changes in price per megabite and in the form factor of hard drives
When were hard drives invented?
1956
Describe the evolution of hard drives by decade
50s: hard drives invented
60s and 70s: hard drives primarily for main frames (which were very large computers)
80s: floppy discs used for desktops - used 3.5 inch hard drives
90s: home use of computers with hard drives
Pardox with evolution of hard drives
hard drives kept getting smaller in the form factor but larger in terms of sotrage capacity
Short run tradeoffs for decreasing form factor
-miniaturization is expensive
-new, smaller hard drives were more expensive
What determines whether or not a company will use new hard drives?
If the company is an incumbent or a startup
Describe incumbents
Incumbents serve an existing cutomer base who require a specific form factor, and thus won’t spend money on new tech
Describe a startup
A startup has no customer base, and will thus go for growth by choosing new tech
Sustaining Innovation
-makes existing products incrementally better
-a good strategy for incumbents
Disruptive Innovation
an innovation that creates entirely new product lines that start out as less profitable but eventually absorb the old product categories
Digital Disintermediation
a shift away from needing local distribution partners for broadcasting information to a national audience
Tech allowed streaming videos or audio directly to a national audience
Describe NPR business model
NPR is a network that syndicates content to local public radio stations, who subscribe to their content
NPR is not a public radio station
When were podcasts invented?
-Created in 2004 but were a pain to use
-became user friendly in 2008 with the popularity of smartphones
Old media landscape
reliance on local stations
New media landscape
download or streaming content directly
Local affiliates thoughts on NPR podcasts
angers them because they want NPR listeners through radio so they can charge more for advertising
What type of invention is podcasts?
they are a disruptive innovation, specifically to radio
Podcast format
much of the talent, tech, and format come out of radio
Briefly descibe disruptive innovation for cable companies
-Hulu took an incumbent approach by acting as a streaming adjunct to network tv (it was designed to not be high quality because they didn’t want to lose cable subscribers)
-Amazon Prime and Netflix went with the startup approach
