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Chapter 6: Disruptive Innovations Graded A+

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Chapter 6: Disruptive Innovations Graded A+ Kodak and Photography ️- Manufactured camera 'film' and some hardware - Synonymous with photographs "Kodak moments" - In the 1990s...... o 145,000 employees o market share near 90 percent o profit margins so good "any products more lucrative tha...

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  • September 25, 2024
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  • Chapter 6: Disruptive Innovations Graded A+
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Chapter 6: Disruptive Innovations Graded A+
Kodak and Photography ✔️- Manufactured camera 'film' and some hardware

- Synonymous with photographs "Kodak moments"

- In the 1990s......

o 145,000 employees

o market share near 90 percent

o profit margins so good "any products more lucrative than film were likely illegal"

- Crushed by digital photography



Why Do Companies Like Kodak Fail? ✔️- Many once-large firms fail to make the transition as new
technologies emerge to redefine markets.

- Since the 1990s

- The market-creating price elasticity of fast/cheap technologies acts as a catalyst for the fall of huge
firms.



Why Big Firms Fail ✔️- Failure to see disruptive innovations as a threat.

o Reason: They do not dedicate resources to developing the potential technology since they (initially) do
not look attractive.

• Creates blindness by an otherwise rational focus on customer demands and financial performance.

- Start-ups amass expertise quickly.

o Big firms are forced to play catch-up.

• Few ever close the gap with the new leaders.



Characteristics of Disruptive Technologies ✔️- They come to market with a set of performance
attributes that existing customers do not value.

- Over time the performance attributes improve to the point where they invade established markets.



Disruptive vs. Sustaining Technology ✔️Sustaining technology: produces incremental improvements in
existing products - 'better, faster, cheaper'. Readily accepted by existing customers.

, - Better fuel economy in cars

Disruptive Technology: a new way of doing things that usually opens new markets and destroys old
ones.

- Steamboats in the 19th century

- Electric or Hydrogen Fuel Cell Cars ... self driving cars

- Quartz watches

- The internet....



Digital Darwinism ✔️Implies that organizations which cannot adapt to the new demands placed on
them for surviving in the information age are doomed to extinction



Recognizing Potentially Disruptive Innovations ✔️- Don't focus on the short term and on customer's
current needs

- Create positions in the organization to scan the environment for potential innovative technologies:

o The Chief Technology Officer (CTO)

- Scan the environment and have conversations with those on the experimental edge of advancements.

- Increase conversations across product groups and between managers and technologists.



When a Potential Disruptor is Spotted ✔️- Build a portfolio of options on emerging technologies,
investing in firms, start-ups, or internal efforts.

o Focus solely on what may or may not turn out to be the next big thing.

- Have a process to experiment with new technologies



Stages ✔️1. Generate Ideas: Strategic business and IT planning, environmental scanning, employee
suggestions.

2. Develop a Proof of Concept: Small scale experiment to demonstrate usefulness. Use as a 'gate' to
determine if we should proceed with idea.

3. Pilot Stage: Try out the technology in the real world. Small Scope, low risk.

4. Transition: Roll out technology on larger scale



The Internet - History ✔️- Began as a U.S. Dept. of Defense network called ARPANET in 1962

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