Major cause of digital disruption – Disrupt or be disrupted

Major cause of digital disruption – Disrupt or be disrupted

Posted by Torben Rick | March 28, 2016 | Business Disruption, Strategy, Technology
Major cause of digital disruption

Business models behind digital disruption – Major cause of digital disruption

– Digital transformation is disrupting everything ……. faster and faster

Business disruption is a hot topic – it’s not just a passing trend, it’s the new normal. Whereas a decade ago business disruption was the rare exception, it is now a reality that companies face on a regular basis.

The major cause of digital disruption is the rapid advancement of technology and globalization, which allows new business models to be introduced at an ever-increasing rate and with rapidly declining costs.

Digital business will break down traditional barriers between industry segments, creating completely new value chains and business opportunities

#1 – The subscription model

Netflix, Dollar Shave Club, Apple Music, Tidal – Disrupts through “lock-in” by taking a product or service that is traditionally purchased on an ad hoc basis, and locking-in repeat custom by charging a subscription fee for continued access to the product/service.

Digital disruption - Streaming music

DVD Rental Discruption

#2 – The marketplace model

eBay, App Store, Uber, AirBnB – Disrupts with the provision of a digital marketplace that brings together buyers and sellers directly, in return for a transaction or placement fee or commission.

#3 – The on-demand model

Taskrabbit – Disrupts by monetising time and selling instant-access at a premium. Includes taking a commission from people with money but no time who pay for goods and services delivered or fulfilled by people with time but no money.

#4 – The access-over-ownership model

Car2go, Peerby, AirBnB – Disrupts by providing temporary access to goods and services traditionally only available through purchase. Includes “Sharing Economy” disruptors, which takes a commission from people monetising their assets (home, car, capital) by lending them to “borrowers”.

Access-over-ownership model - Digital dispruption

#5 – The free model

Google, Facebook – Disrupts with an “if-you’re-not-paying-for-the-product-you-are-the-product” model that involves selling personal data or “advertising eyeballs” harvested by offering consumers a “free” product or service that captures their data/attention

Disrupt or be disrupted. That’s today’s digital mantra

Digital disruption may sound like it’s something one hear in buzzword bingo, but it is one of the most important movements facing businesses today.

Disruption and digitization is one of the major challenges for all companies

It is forcing businesses to look beyond the world as they know it, observe how things are changing on the outside, to change transform philosophies, models and systems on the inside.

But since many organizations have a large infrastructure, they’re unwilling or slow to change and take on that role.

They have technologies that have, in some cases, been in use for decades – “legacy technology”- but it’s not the legacy technology that’s the real problem. It’s the organization’s “legacy thinking” that gets in the way of positive and productive change.

The giant digital disruption - Publishing

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

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