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Growth Through Disruptive Innovation

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Here are some takeaways on a speech by C. K. Prahalad speaker at the World Innovation Forum.


So we are beginning to see the impact of current economic crisis. The bad news is there is going to be significantly more regulation in the future but the good news is there is a tremendous access to global talent like we have never seen before. New competitors who we did not think could play on the global stage from India, China Brazil etc are coming online. In fact for the first time 4 billion people will be connected - that's going to have an impact. 4 billion people who want to be part of the market!
So the question quickly becomes: How do you build disruptive business models?
Take a company like Build a Bear workshop which is the inverse of the typical toy maker. Typical Toy makers are usually: large volume .... low cost .... low margin .... seasonal .... instable market .... mostly a fad. Build a Bear workshop's model is: moderate volume .... low cost .... high margin .... all year round .... stable market .... not a fad. And all the experiences are very personal and very contextual!
But you say "C.K. my company is in a more traditional business selling a commodity to other businesses." So how about we try this disruptive innovation on the tire business. If I can show you how to disrupt the tire business then you can't tell me your business is unique. Would you agree?
Here is how to disrupt the Tire business
Instead of buying tires, how about buying tires by the usage? You pay a rate calculated by sensors in tires so that you can pay by the mile! For fleet owners they could pay one blended rate based on all the makes and models of tires they have. You can also track with GPS how the tires are being used and give feedback to drivers on how to drive better which in turn can drive down your insurance costs. And then manufacturers like Bridgestone will have real time info on how people actually use their tires. All of this fundamentally changes the economics of this industry.
You need to think about how to create a single experience per user. This is the path to radical innovation.
The key drivers of the value will include:
Personalized experiences .... think individualized experiences
Co-creation process .... think the user has a say in the outcome
Delivery networks .... different modes of delivery
Communities .... for further innovation
Individuals .... individuals rather than mass
To go from products to solutions to experiences the transformation requires:
Imagination, passion, courage, humanity, humility, intellect, and a little bit of luck!


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Paul Dunay is director of global field and interactive marketing for Bearing Point (www.bearingpoint.com).

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  • by replica watch lover Tue May 19, 2009 via blog

    So we are beginning to see the impact of current economic crisis. The bad news is there is going to be significantly more regulation in the future but the good news is there is a tremendous access to global talent like we have never seen before. New competitors who we did not think could play on the global stage from India, China Brazil etc are coming online. In fact for the first time 4 billion people will be connected - that's going to have an impact. 4 billion people who want to be part of the market!

  • by Kris Walker Wed May 20, 2009 via blog

    I think we can take this idea even further. Why not disrupt the whole organizational structure and the whole product design process? The time is right for these innovations, and the leaders are going to shift our whole economic structure before most people even realize what is going on. Did anyone understand the industrial revolution while it was happening? We're working on this now at the Fireworks Project http://www.fireworksproject.com

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