Skate to where the money will be & Disruptive Innovation

Question 1

Tests for disruptive innovation

Answer 1

How will the incumbents react? Will they ignore you?

Are the prospective customers overserved by the current offering?

Is the industry mature and profitable?

Question 2

What is modularity and when does it occur?

Answer 2

• When a standard is set. And the mainstream consumer is overserved.
• Lots of ways of doing the different ‘jobs to be done’ emerge through modularity.
• e.g. Facebook

Question 3

Christensen says that when products are not good enough for mainstream consumers..

Answer 3

• companies compete on product performance.
• interdependent proprietary product architects.
• being an integrated company is key to success.

Question 4

When product performance exceeds the needs of general consumers…

Answer 4

• incumbents stretch to fill the needs of the most demanding and profitable customers.
• technological progress overshoots what mainstream consumers can make use of.
• startups enter the market catering to the overserved market (modularity).

Question 5

As a result, modularity occurs..

Answer 5

• integration is no longer necessary for the success of a company.
• it becomes a disadvantage in terms of speed, flexibility and price.
• dominant incumbents become displaced by specialists focusing on one point in the value chain.

Question 6

Where do companies go wrong?

Answer 6

• succumb to investor pressure
• sell off asset-intensive units to improve their ROA.
• try and acquire modular startups.

Question 7

modularity and collaboration

Answer 7

Collaborating with the outside is VITAL for the open system to work.

Being good at this relies on;

‘absorptive capacity’ - how able the firm is able to react to environment

‘dynamic capabilities’ - how able the firm is able to reconfigure and redevelop capabilities