If you want to read further and not familiar with the idea of disruptive innovation, Please watch above video.
Disruptive innovation is not an idea but a ray of hope for mankind. When I say this, I really mean it. Seeing the organization as a big beast which is fighting for survival created multiple problems in the minds of the managers. There are ways to innovate and capitalize on ideas to create new markets and new customers. When we assume that total pie for all the human beings is same we start believing too much in porter's five forces.
We all studied Michael E. Porter's five forces model to understand business dynamics. This model was introduced to study industries which were driven by resources. Today we are living in knowledge driven economy... Ideas are more powerful than everything else. By innovating new business models any xyz person can compete with large foolish and immovable dinosaurs. There are numerous examples when innovators challenged the large corporations : Facebook is challenging Google, Linkedin is challenging all Job portals, Twitter is challenging all News papers...
Porter's Assumption : Pie is fixed. Fight to get maximum out of it.
None of these companies started to compete for existing customers. All these companies created new customer base. These companies didn't focus on extracting more from buyers and suppliers. They didn't focus on erecting barriers to entry and didn't bother about substitutes. Clearly these companies survived and thrived on customer obsession which is must for disruptive innovation. As I pointed out in my last article, start thinking about customers, profits will automatically flow.
Disruptive Innovation : Expand the Pie... Take little from it... This little piece will be sufficient.
Old Model :
Focus on profit -----------> Beat suppliers-------> Kill buyers----> Focus on competition ----> Stop new players---> Neglect customers ---> Unhappy Customers----> Low $$$
New Model :
Focus on Customers ------------> New Ideas to serve ---------> New products -----------> Happy customers----> $$$$$
Start loving your customers to disrupt the market by understanding their next generation needs!
