Business Disruption

Business disruption…when it comes to business strategy, “disruption” refers to a process in which market entrants come armed with non-conventional business models, and what at their outset seem to be poor-performing products actually come to challenge and eventually replace industry incumbents over time. Simply put, it is the process in which an underrated, or unexpected, product or service starts to become popular enough to replace, or displace, a conventional product or service on the market….technology disruption & digital disruption.

Innovation vs. Disruptive Innovation

The concept of innovation is heavily linked to the idea of business disruption, largely because the origins of disruptive products and services derives from an unconventional approach to business and market innovation. In “true” disruptive innovation, the unconventional product takes root at the bottom of the market and develops a poor reputation because of it. However, over time, and due to a number of factors such as lower costs or higher accessibility, the product actually becomes more appealing than its contemporaries within the industry.

3 Examples of What Business Disruption Is

1. Netflix and Streaming Services

Netflix and all other streaming services are in the process of an ongoing disruption in the entertainment industry. They largely influenced the slow extinction of video rental stores and are now responsible for the ever-growing cancellation of cable subscriptions worldwide. 

2. Skype

Skype, and video chatting platforms such as Google Teams and the booming Zoom, are perfect examples of true business disruption. While the existence of these types of platforms have been the norm for years, its conception was far more disruptive than many may remember. It introduced a new way of international communication, where users globally can chat, call, and video chat with each other for free. 

3. Uber

Often cited as an example of disruption, the modern tech giant Uber is not an actual example of true business disruption. On the surface, it does have a few of the key indicators of a disruptive innovation. It has almost completely replaced the taxi industry for many travellers throughout the U.S. and internationally, with an annual revenue coming it at 65 billion USD last year alone. It offered a traditional service at a considerably lower price point and tore up the rule book of the taxi industry altogether. 

Key Takeaways

Not all innovation is disruptive, and it doesn’t have to be.

True disruption is risky.

Disruption is oftentimes stealthy. 

Business disruption takes time. 

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