Seite 1 Orientierung
http://lst-kieser.bwl.uni-mannheim.de Prof. Dr. Dr. h.c. Alfred Kieser
WS 2005 / 2006
Disruptive Innovation
Robert Cummings & Stefan Schaffer
SAP AG
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
In t
his session we introduce concepts about disruptive innovation and discuss the
impact of such innovation on business processes. These concepts can be transferred
to various scenarios introduced in further sessions of this class.
In t
his session we introduce concepts about disruptive innovation and discuss the
impact of such innovation on business processes. These concepts can be transferred
to various scenarios introduced in further sessions of this class.
Description
Description
Description
Description
Goal
Goal
Goal
Goal
To understand the characteristics of disruptive innovation, its
impact on businesses and business processes and the possibilities
for companies to deal with it.
To understand the characteristics of disruptive innovation, its
impact on businesses and business processes and the possibilities
for companies to deal with it.
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Analog cameras
P
e
rf
o
rm
a
n
c
e
time
Innovator’s Dilemma – Disruptive Technologies
Demand
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Analog cameras
P
e
rf
o
rm
a
n
c
e
Demand
Average Consumer
time
Innovator’s Dilemma – Disruptive Technologies
Non-Buyers
(too complex,
too expensive)
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Analog cameras
P
e
rf
o
rm
a
n
c
e
Demand
Average Consumer
time
Innovator’s Dilemma – Disruptive Technologies
Non-Buyers
(too complex,
too expensive)
Digital Cameras
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Examples
Seite 9 Orientierung
http://lst-kieser.bwl.uni-mannheim.de Prof. Dr. Dr. h.c. Alfred Kieser
WS 2005 / 2006
What can we lean
from this regarding
the impact of IT
innovation on
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
1960s:
NASA converted from analog to digital transmition
of photos
1972:
Texas Instruments patented a first film-less camera
Mid 1970s:
KODAK invented several sensor techniques
1981:
Sony introduced the first commercial electronic
camera in the world (display via VCR on TV)
1986:
KODAK invented first mega-pixel sensor
1991:
KODAK released first professional digital camera
1994/95:
Apple and KODAK launched first digital consumer
cameras. KODAK, Microsoft and Kinkos
collaborated to develop the first kiosks for
developing digital pictures
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Number of pictures overall to be developed goes down by 1/3 in
5 years
Numbers of digital pictures developed skyrocket from 23 million
in 2000 to 1.5 billion in 2005
Price war started by discounters (1 Cent per Picture), many small
photo shops closed
50% of German development laboratories closed
KODAK sold off their photo development business
Massive investments required by survivors
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Sales channel changed
Kiosk systems (60%)
Internet (25% Internet)
CDs sent in (15%)
This lowered entry barriers for new entrants / expansion of
existing players
Development laboratories become visible to consumers
Try to avoid price wars and differentiate by additional services
Printing on T-shirts, cups, PC software, albums,…
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
Source: Economist, 2003
The next disruption is coming (at least for the camera
providers)
Seite 15 Orientierung
http://lst-kieser.bwl.uni-mannheim.de Prof. Dr. Dr. h.c. Alfred Kieser
WS 2005 / 2006
RFID
Web Conferencing
XML
Internet
Shopping
Internet Procurement
Supply Chain
Optimization
Portals
Voice over IP
Blackberry
Airport Check-in Kiosks
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
How to leverage disruptive innovation against established
competitors?
Actively search for new technologies that are already available but
hidden in many cases
Seek for small market niches that do not use the existing products
because they are too heavy and expensive and that are not target
of the established player’s sales channels
Taylor a specific offering and sales strategy for this niche
Keep it simple and cost conscious
Know your market: Do not fall into the trap of following the big
guys’ priorities
Enhance the product’s capabilities step by step
Orientierung Prof. Dr. Dr. h.c. Alfred Kieser
How to leverage disruptive innovation against established
competitors?
Actively search for new technologies that are already available but
hidden in many cases
Leverage acquisitions
Eat your own children – or somebody else will eat them
Provide a protected room for innovation
Separate from established business with own measures of success
How do you defend yourself against disruptive competition?
Be paranoid
Know your strengths and weaknesses
Defend your space, also at the low-end
Leverage acquisitions
How to prepare for Disruptive Innovation: Established
Players
