1. What is it and why should we care?
Disruption
What is it and why should we care?

2. What Is New In Technology?

3. Two meanings for “disruptive innovation”
Popular usage
Technical, sophisticated usage
What is wrong with the popular usage? There are different types of innovation and calling them all “disruptive” leads to mistakes in how to deal with it

4. Christensen’s “disruption”
“Disruption” describes a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses.
“Disruptive innovation” is the trigger of disruption. Often, it is digital innovation.
Christiansen et al., HBR 2015

5. A theory of innovation

6. A A Low end footholds or new market footholds “Good enough” products
Christiansen et al., HBR 2015 A
Low end footholds or new market footholds
“Good enough” products A

7. A disrupted incumbent
In 2004, Blockbuster dominated the U.S. video/DVD rental market (and others around the world) with 9,000 stores, taking just under two decades to get to that position. By 2010, it had filed for bankruptcy, with its number of outlets shrinking to just a third of its peak. (Gans 2015)
In 2000, it changed its business model, moving to a subscription service that allowed consumers to keep DVDs for as long as they wanted. 

8. Christiansen et al., HBR 2015
Low end footholds or new market footholds
“Good enough” products A
Netflix started as mailing services and fee based – then pivoted to subscription based all-you-can-watch

9. What should BB have done?
Christiansen et al., HBR 2015
Low end footholds or new market footholds
“Good enough” products A
Monitor
Set up a division & do not be afraid of cannibalization
What should BB have done?

10. A different “demon” Incumbents overfocus on existing major customers
Incumbent overfocus on high margins segments

11. Gans adds another type of Disruption
1. What
“Classic” - customer-driven output-substitution
New entrants discover a niche of customers who value new performance attributes and are willing to switch, or simply a new segment at the low2 or high-end (e.g., Tesla)
2. How
“Architectural Disruption”
The firm’s processes, business/economic models, cost/pricing structure cannot be easily adapted, “architectural innovations” giving an advantage to new entrants1
New entrants redesign the business processes or models
1Adapted from J. Gans, The Disruption Dilemma, 2016; 2 Disruptive Innovation, Christensen

12. What Kind of disruption is Tesla?

13. Some disruptions are almost impossible to recover from
Source- Big Bang Disruption, Nunes

14. Being disruptive = Guaranteed success?

15. A What should UVA do? Monitor
Christiansen et al., HBR 2015
Low end footholds or new market footholds
“Good enough” products A
Monitor
Set up a division & do not be afraid of cannibalization
What should UVA do?

16. Where else do/will we see disruption?

17. Where else do/will we see disruption?

18. Where else do/will we see disruption?

19. Surviving Disruption Carrier air conditioners : replicate
Microsoft: embrace
Lego : embrace
AT&T vs. Verizon : make a big bet or stay the course

20. Will you be disrupted?