Creating Business Agility

Chapter 2Disruptive Innovation and Evolving Business Model

We walk into a store to buy some products, and the moment we like something we are tempted to scan the bar code with our handheld smartphones to compare the price at Amazon. We are motivated to place an order instantly if it is cheaper at the online store and to claim the incentive offer. Sometimes we go to the mall with family and while those folks are busy shopping for their stuff, we receive text alerts about discounts or instant offers by business merchants or service providers near us in the mall with the help of location-based services offered by Foursquare, Google, and others. We are experiencing these changes in the products and services offered, marketed, and served with the help of disruptive innovation and a changing business model.

Disruptive Innovation Creates Business Dilemma

In a rapidly changing technology and business environment, companies across industries such as information technology (IT), airlines, retailers, media, and banking are experiencing major disruptions by new and disruptive technologies and business models. The success of recent companies such as Dell, Facebook, Google, Best Buy, eBay, Salesforce.com, Virgin Blue, easyJet, Netflix, and ING Direct in capturing market share is a classic example of disruptive technologies and business models. The term disruptive innovation first gained popularity in 1997, coined by Harvard Business School professor Clayton Christensen in his book The Innovator's ...