Riblet#10: Countering the Disrupters

(Riblet: a brief risk management morsel; from NIB – “news in brief”, and niblet – a tasty morsel; riblets are also the ridges on a shark’s skin that enable it to swim faster).

Once you have disrupted a market and disposed of long-standing dominant players, how do you avoid being disrupted yourself?

Harvard Business School professor Clayton Christensen died two weeks ago.  He is best known for introducing the idea of disruptive innovation – how small start-ups can take on and replace big firms when you would have thought that big firms had the resources to out-innovate anybody else.

The difference now is that some of those disrupters such as Amazon and Apple remain paranoid that the same thing might happen to them and so they adopt what has been termed “disruptive risk management”.

Some buy up emerging competition before it hurts them as Google did with YouTube, Facebook did with Instagram and WhatsApp, and Danone did with non-dairy competitors such as Alpro.  Others take a stake in potential future disrupters in order to keep a close eye on them: GM invested in Lyft (a US competitor to Uber), and Daimler and Chinese car company Geely (owner of Volvo) have taken stakes in flying-taxi firms. Others try to disrupt themselves from within to spur innovation such as Apple, Netflix or Spotify (Apple disrupted its own market for the i-Pod with the introduction of the  i-Phone with all its music features).

How does your organisation see off potential disrupters? 

What might lead to your organisation’s business model being disrupted?


Data Source:The Economist magazine

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