By Alan Graner
Part 1 http://dsprel.wpengine.com/identify-disruptive-innovation-destroys-part-1/ gave two examples of how to recognize disruptive innovation. Here are two more:
Disruptive technologies always take root in a very undemanding application.
When innovative applications start penetrating mainstream markets, companies may spend small fortunes trying to force the innovations into their current product—with little success. As a result, the companies face two outcomes: either change their product so radically it’s no longer unique or face an expensive failure.
When Netflix proved to be a formidable competitor, Blockbuster decided to fight them head to head by establishing its own mail-based channel to supplement store rentals. Unfortunately they didn’t have Netflix’s distribution infrastructure, nor did they offer Netflix’s extensive inventory of movies that included foreign and independent films, TV series and hard-to-find titles. Blockbuster’s sales began dropping. And as Blockbuster began to teeter on the edge of bankruptcy, Netflix drove home the final nail with streaming video.
A similar story can be told for Amazon.com.
The threat to existing products isn’t a more sophisticated or next-generation product. The threat is a product that’s simpler and better.
The Huffington Post http://www.huffingtonpost.com/steve-cichon/radio-shack-ad_b_4612973.html ran an old Radio Shack ad from February 16, 1991. The ad promoted the following products:
- All-weather personal stereo
- AM/FM clock radio
- In-ear stereo phones
- Micro-thin calculator
- Tandy 1000 TL/3 computer
- VHS camcorder
- Mobile cellular telephone
- 20-memory speed dial phone
- Mobile CB
- Deluxe portable CD player
- Desktop scanner
- Phone answering machine
- Handheld cassette tape recorder
Total cost to purchase all the above items was $3,054.82 ($5,100 in today’s dollars).
Today all the above items can be replaced with a simpler, better product—the iPhone—for a fraction of the cost.
The question everyone should be thinking, of course, is what disruptive innovation will smash Netflix and iPhone?
What’s your opinion?
Image: Okona via Wikimedia Commons
Alan Graner is Chief Creative Officer at Daly-Swartz Public Relations, an Orange County, CA marketing communications firm. For a public relations campaign that makes you stick out from the crowd, email Jeffrey Swartz at email@example.com. Or visit www.dsprel.com.