Recognizing a disruptive threath

Common mistakes when recognizing a disruptive thread are:

1. Companies believe that their most advanced/high end customers will be key to recognizing a disruptive technology. In contrast, disruptive innovations have their roots with over-served customers or customers who did not have access to the product before.
2. Managers pay most attention to their largest competitors. But succesful disruptors are often not even on the radar of the incumbents.
3. Conventinal thinking suggest that companies with the biggest R&D budget are likely to disrupt. In contrast, companies that succeed disrupting an industry serve customers that the existing competition does not want to serve

To avoid these mistakes ask the following questions dealing with:

1. Non-served customers
   1. Is there a group of people who previously did not have the money or skills to purchase the current offering?
   2. Did customers have to go to a central inconvenient location to buy the product?
2. Over-served customers
   1. Are there customers at the bottom of the market who would buy the same product for a lower price?
   2. Is it possible to build a profitable business model while keeping down prices?
   3. An indicator of over-served customers is that they do not use many of the features that are offered in the most recent version of the product.
3. Disruptive to competitors
   1. Is the innovation disruptive to all companies that are currently competing in a market?
   2. This reveals a crucial point that innovations are only disruptive in relation to an existing business model or technology.

Part of: M8-S2 - Reading - Strategies for E-Business - Chapter 6 - Sustaining Competitive Advantage