theme 6 Flashcards
what is a disruptive innovation?
When you talk about disruptive innovation It means that if you are a big organization and you don’t give notice that other organizations are coming up with products that are better and maybe that they perform better maybe you will become out of business and this is what disruptive innovation means
What is a job to be done?
A job to be done is related the disruptive innovation by saying that strategies and products in general are always an answer to a challenge to be resolved which means every product is resolving a particular issue or a need which means everything and every business is a job to be done
This job to be done are not only functions but they can also have an emotional and social dimensions.
Explain the difference between a membership model (sharing model) and transaction (traditional model)
Instead of having a business model where you sell a product or a service and as soon as you sell the product the relationship stops
In a membership model
• it is about bonding and relationship building and keeping the same customers for a long period.
• The experience for a customer in a membership model is completely customized unlike in a traditional model where you can only customize to an extent.
• These membership model are based on digital data which allow this personalization to take place.
• The traditional model is all about control, whereas this membership model is all about using this data digitization for the purpose of continuous adaptability and flexibility to a change in customers needs and wants.
- Product innovation in a traditional model is coming up with a new product, whereas membership model is about continuous innovation like Netflix will continuously bring new content.
- The main difference between transaction and membership model is that in the transaction model the relationship ends with the sale but with the membership model it is all about building constant relationship that they aim to keep eternal like Netflix, Airbnb, linked in etc…
what are the models of the membership economy?
• Digital subscription: paying a monthly fee for like nteflix or youtube or any other software that allows you to use the services of this company
• Online communities: like linked in, pintrest, facebook, Instagram, where it is for free to a certain extents and people are what makes the community. The more people there is in this community the more it is worth
o A freemium model Is when it is free for basic services it is free, but for more advanced professional services you need to pay.
• Loyalty programs like in Starbucks where they keep you with these loyalty programs which is nothing new like in hotels and airline membership but now it is used by every business with the use of digitization of the economy
what is the Artificial intelligence AI ?
AI is either to augment the decision making like in virtual assistant on the mobile, data analytics and software solution
it helps by reducing biases and helping you to take better decisions
Or by automation like in robots or self driving cars etc.…
The comparative advantages of humans and computers
Where do human perform better or worse than computers and where do the collaborate for the best
• Human are definitely stronger when no data is used like in negotiations, intelligence briefings like going to war or not or to invest or not
• Computers are superior when there is more data like in credit scoring
• When there is high data and highly unique issues like when landing airplanes computers are helping but humans are in charge but when in sky it is an automatic pilot so both are combined
• When you have low data and familiar problems like when diagnosing a disease it is good enough for a computer to make an accurate prediction but humans make the final decision so both are combined
IBM international Business Machine case ?
In the 1970s it was known for big servers and machines
In the 1997s when internet became popular a new CEO from Mckinsey came and said the internet is the future and he changed the organization structure and he did it in a manner that any project that they would go into was at least going big enough and that is different than what they did which was only getting into large projects. So now they go into small under 1mill project that will be big later
The CEO called It EBO emerging business opportunities and at first the emergent business opportunities which were about internet formed between 1% and 24% before 2006 and today they make about 80% of all revenues of IBM
IBM reinvented themselves by embracing internet and small projects in the years between 1990 and 2000 and this innovation is what allowed them to continue until now or else they would have ended long time ago
And now IBM is doing the same by continuously looking for new projects that embrace the newest technologies and newest innovative products and they call them business opportunities
Amazon Case?
Offensive strategic moves: Means that you embrace a new technology as if your life is on the line and this is what Amazon did in the 1990s and what gave them the advantage of being the first movers. When they bought the retailer it was a shock for the whole world because they are known for online business after they stared selling online books and now they sell almost everything
E-commerce is changing the way we buy products and services even pre covid especially in china and the US and with Covid the whole world is pushing fo E-commerce and trading
Amazon is now using drones for delivery which shows that this company also explore new innovative things
The E-readers were a very innovative product and sony made a very good e-reader but unfortunately it was not a success story and the reason is there was not enough info or book on e-reader. When Amazon created the Kindle and it was available to put a lot of books and titles on it and even tho it is technologically the same product that sony created and maybe sony created even a better product but they didn’t have enough books to sell and it couldn’t compete with Kindle
This shows you that innovation evolves and that not always the first movers and the first people who succeed
Mix and match stitch fix case ?
This case study shows the use of AI in this business which has a huge impact
From the concept of a job to be done this lady built this business in a business model that says that ladies can be busy in their lives and don’t have time to go shopping for cloth. So what she did is by using data on fashion is to predict this particular style of this lady customer and when she did, she sends a box of 5 items every period of time. The customer pays for the items she like but the items that she doesn’t like she can return without paying.
The way she does it is customers pay a subscription of 20$ and then fill in their desires in terms of fashion and what you like or don’t.
Over three rounds, because this is machine learning and the algorithm always improve the decision, she is capable of accurately predicting the things that the customers like
The unique value proposition is not only using the AI for tailored clothes based on size and preferences for each customer, this company also have few hundreds of designers that also put a personal note and this important because it shows lady customers that they are not just treated by robots but also this adds a human touch which is the personal note prepared by the designers and put in boxes which shows as these boxes are assembled by humans which is not true
In 4 years this company is worth one billion
