Unconstrained and Undisciplined: A New Breed of Disruptors Accelerates Market Transformation

Clayton Christensen’s model of business disruption posits that new players can topple industry giants by attacking the low end of a market and building towards competitiveness at the higher margin. But this once-groundbreaking model may already be obsolete. In a recent Harvard Business Review report, Larry Downes and Paul F. Nunes argue that the pace of disruption is happening much faster these days, requiring industry leaders to take more radical precautionary measures. They cite as an example the GPS equipment market, which was upended by smartphone apps before manufacturers had a chance to adapt, with Garmin losing 70% of its market capitalization in the two years after navigation apps were introduced.

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Clayton Christensen’s model of business disruption posits that new players can topple industry giants by attacking the low end of a market and building towards competitiveness at the higher margin. (For more on Christensen, read the New Yorker‘s superb profile from last May.) But this once-groundbreaking model may already be obsolete. In a recent Harvard Business Review report, Larry Downes and Paul F. Nunes argue that the pace of disruption is happening much faster these days, requiring industry leaders to take more radical precautionary measures. They cite as an example the GPS equipment market, which was upended by smartphone apps before manufacturers had a chance to adapt, with Garmin losing 70% of its market capitalization in the two years after navigation apps were introduced.

SmartPlanet‘s Joe McKendrick offers a concise overview of the HBR article, outlining the common characteristics of the new breed of disruptors. Most notably, they are unencumbered by traditional business protocol and cumbersome testing-and-approval structures, allowing them to release to market rapidly while embracing experimentation and failure. What can traditional companies do to protect themselves? Anticipate the future; lower prices to lock in customers when upstarts begin releasing early products for free; be prepared to abandon markets by diversifying; and embrace the “undisciplined,” experimental strategies of the up-and-comers.

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