Disrupt Innov INDICON 7-9 Dec12 Ppt NTNair

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Disruptive Innovations Threat & Opportunity:

Disruptive Innovations Threat & Opportunity N T Nair Chief Editor E x ecutive Knowledge Lines monthly IEEE INDICON 7-8 Dec12

Punching Machine A Scenario:

Punching Machine A Scenario Mechanical punching machines - Integral part of factories for decades In 80s, electronic attendance recording systems emerged, spearheaded by KELTRON Mechanical punching systems were totally replaced Disruptive Innovation in action!

Disruptive Innovations The Genesis:

Disruptive Innovations The Genesis The term ‘ Disruptive Technology ’, a synonym of ‘ Disruptive Innovation’, was coined by Prof. Clayton M. Christensen, Harvard B School He identified the following reason for seemingly well-managed Cos, innovative in their domains, collapsing suddenly: “Disruptive technologies bring to a market a very different value proposition than had been available previously…… Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use.”

Disruptive Innovations Some Characteristics:

Disruptive Innovations Some Characteristics Use latest technologies, energy efficient, small form factor, more reliable, layman friendly … First mover advantages in emerging markets – Shampoo in Rs 2 flexible packs Difficult for big companies to enter small new markets More importantly, their silent arrival will be difficult to recognise and often ignored by biggies

Sustaining versus Disruptive Innovations:

Sustaining versus Disruptive Innovations Sustaining Innovations improve the performance of established products or services Disruptive Innovations offer totally new alternatives which cost less, smaller , better performing, easy to use, energy efficient They solve existing problems in systems in new ways, create new niches in established markets, and produce unexpected networks and synergies for business growth.

Examples of Disruptive Innovations 1. Billboards:

Examples of Disruptive Innovations 1. Billboards Roadside billboards put up with weeks of effort Metal structure, painting, artist’s work for days… With computer generated flex boards, all these activity areas vanished A classic case of disruptive innovation in action

Example 2: Computer Scene:

Example 2: Computer Scene Tablets are posing threat to laptops which in turn are edging out desktops The handy, less power hungry, cute notebook computers do not need UPS The ubiquitous computer table has become redundant, as laptop rests on lap LCD monitors also do a disruptive action by killing CRT monitor industry

Ex. 3: Data Domain :

Ex. 3: Data Domain CDs, which displaced VHS tapes have given way to DVDs, which, in turn, are also under threat from Blu -Ray discs. Flash or solid state memory is eyeing the data storage segment to edge out hard disk drives. But all these storage mediums are, in fact, getting disruptive attacks from an entirely different technology corner - Online delivery of Movies, Music and other contents

Ex. 4: Smart Phones :

Ex. 4: Smart Phones Cell phone industry is encroaching into service areas now handled by credit card industry – Payment thro’ mobile….. Plastic credit cards on way out Mobiles as medium for air and train tickets - no more paper tickets Standalone cameras giving way to phone cameras, Radio in mobile ….. Finally, smart phones are likely to make tablets and laptops run for their life

Disruptive Innovations The Threat :

Disruptive Innovations The Threat No area of human activity is immune to Disruptive Innovations, coming often as a bolt from the blue Even the governments should be cautious, as otherwise, wastage of taxpayers’ money through investments in end-of-the-life technology areas will happen. All entrepreneurs have to diligently scan the horizon for possible disruptive trends.

Opportunity for Start-ups:

Opportunity for Start-ups Industry leaders are well organised to handle sustaining technologies – higher margins from better products, sold to leading-edge customers Start-ups generally lack resources But they can better address small markets and operate at low margins, braving the limitations of many disruptive innovations Once accepted by the market, sky is the limit, as shown by many start-ups

To Conclude...:

To Conclude... Disruptive Innovations should not be seen as an insurmountable threat They could be Change Agents for Industry Leaders or Enablers for New Entrepreneurs Looking forward to hear success stories based on Disruptive Innovations… N T Nair ntnair@gmail.com

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