How technological disruption changes everything
Companies that do the same old things, make only incremental changes, and demonstrate “me-too” thinking will get left behind in today’s rapidly changing, hyper-competitive, disruptive world.
To survive and grow, and even regain competitive advantage, many companies are grappling with ways to transform their businesses in the face of disruptive business trends.
#1 – Disruptive business – Apps
Smartphones and tablet-PC have already disrupted or is disrupting many different business. The potential to disrupt several other businesses is huge.
Will the marine navigation industry be the next victim? Smartphones and tablets create numerous opportunities to identify new processes and business models. More and more customers are replacing there expensive – $400 – $600 – marine navigation unit with a $20 iPad app that works better.
#2 – Disruptive business – eBooks
Giant disruption is projected to sweep the publishing world even faster than expected. The pace of change in the book publishing world accelerates, leaving brick-and-mortar book stores in serious trouble
At some point in the future the ebook will become the publishing market’s primary engine.
#3 – Disruptive business – Music streaming
Its been over a decade since the first Apple iPod emerged on the scene, disrupting the music industry and prompting the inevitable shift towards digital. It was a great debut for the almost out-of-business company, Apple computer, to turn around in its history. When it was first introduced, this pocket-sized music player went head-to-head against the now legacy playback formats that previously dominated the recording industry, including CDs and vinyl records.
After several years of market evolution, those disruptive pioneers themselves become susceptible to hybrid disruption by a faster and more flexible population of non integrated/modularized companies whose focus gives them lower overhead costs. Now that customers of the digital music market have been relatively well served, they have many mature options to choose to access and manage their favorite music.
Streaming music services can be seen as a modular architecture because customers don’t need to worry about the hardware and all of the bells and whistles – they can simply configure their songs and stream the music from anywhere. It provides great flexibility for customers to control their music content without a centralized service system and proprietary hardware.
#4 – Disruptive business – Streaming TV
Disruption is coming to the TV industry and there will be a new set of distributors leveraging fundamentally different cost structures to the old regime. DVD rental companies like Blockbuster have already been hit – but there is more to come.
Now, I am not one to argue that TV is going away. But for millions of TV users fed up with outrageous fees provided to cable services provider, streaming services like Netflix, Hulu Plus, HBO Nordic are slowly becoming “good enough” alternative and roughly 1/3rd the cost of basic cable. The phenomenon is called “Cord-cutting” and has been a growing trend since Netflix liberated the common user from traditional cable services.
Fast internet, mobile devices, and the success of the earliest firms in the space have eliminated most barriers for “OTT” (Over The Top) content producers to enter the market.
#5 – Disruptive business – Tablet
The PC industry is hit by the most significant disruptive change it has ever seen and not every company will survive this disruption, or at least continue in their current form. The emergence of the iPad has caused PC industry growth to slow and even decline.
#6 – Disruptive business – Bricks and mortar retail
With a string of high-profile bankruptcies and thousands of layoffs, the retail sector is in upheaval as it struggles with the challenges of changing customer trends and online shopping.
The traditional bricks and mortar retail is perhaps one of those most affected by the advent of the Internet: Borders, Blockbuster, Comet, HMV, Jessops, Neckermann etc.
Despite several retailers’ overall net-profit decline and the disappearance of certain stores altogether, the high street remains bustling with shoppers every weekend. However, with the influence of the internet, new technology and the rise of digital marketing, a number of retailers are struggling to keep up.
#7 – Disruptive business – Hotel
A half-dozen upstarts have emerged in the last two years – with names like 9Flats, HouseTrip, Wimdu and Airbnb – offering the convenience of a hotel, the comforts of a home and the price tag of an up-market hostel – let’s call them peer-to-peer hotels.
It is the most prominent example of a huge new “sharing economy”, in which people rent beds, cars, boats and other assets directly from each other, co-ordinated via the internet.
One of the giants of collective consumption, Airbnb, now is filling more room nights than Hilton.
#8 – Disruptive business – Banks
Banks are changing dramatically amid an avalanche of regulatory change and widespread debt reduction. But this is not the only disruption which banks are experiencing: The peer-to-peer lending sector is growing fast.
#9 – Disruptive business – Telecommunication
Over the last decade, driven by growth in broadband networks and reductions in costs, voice over Internet Protocol (VoIP) services have proved to be a disruptive technology that has transformed the telecommunication industry.
VoIP has been nothing short of a nightmare for fixed and mobile operators.
#10 – Disruptive business – The shared economy
The internet has evolved from communication to social media and the shared economy. New digital services are disrupting established business models and companies offering traditional services are feeling threatened.
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