If you are thinking of starting a new business, could it be the next disruptive force in the marketplace? Read this article by ABE’s digital marketing manager, Maria Koukou, for some great examples of how new business ideas can disrupt the established marketplace.
Business models are subject to rapid displacement, disruption, and, in extreme cases, outright destruction according to McKinsey Global Institute. Since 2000, more than half of the companies in the Fortune 500 have either gone bankrupt, been acquired or ceased to exist due to disruption.
But what is disruption? Clayton Christensen, Professor of Business Administration at the Harvard Business School, first introduced the Theory of Disruptive Innovation to describe companies which shake up industries by discovering new segments of end users until the established competitors are displaced.
And how do companies thrive in the age of disruption?
A key response to disruption is to constantly innovate business models.
Professor Serguei Netessine from Singapore, revealed that only 5% of companies practice business model innovation and those that do not focus enough on their business models are more likely faced with disruption. For example, companies should be more aware about their customers’ behaviours and needs, otherwise someone else is going to directly address pain points matching the gap between customers’ wishes and what is being delivered to them.
Spotify offers the value of on-demand and interest based music that disrupts radio and Amazon wouldn’t have launched the Amazon Web Services if it didn’t believe that companies did not want to own their infrastructure. Airbnb uses the shared economy model finding a home for everyone around the world while on holiday, reframing the idea around accommodation; it took Airbnb four years to build an inventory of 900,000 rooms when Hilton Hotels after 93 years has reached 600,000 rooms globally.
Now.. how disruptive can your business idea be?
ABE’s Business Start-up and Entrepreneurship qualifications can give you the know how to turn your innovative flare into business success. Click here to find out more.