BU111 Lecture Notes - Lecture 9: Disruptive Innovation, Switching Barriers

• School: WLU
• Department: Business
• Course: BU111
• Professor: Leanne Hagarty

Document Summary

Higher switching costs - makes it difficult for customers to leave. Entry barrier - makes lock in worse. Presents improvements to existing products and expected ways. Provides mainstream, high-margin customers with enhancements and product functionality. Presents a different package of performance attributes that aren"t initially valued by mainstream customers. Gains foothold and lower performance segment, improves tech rapidly until they meet mainstream performance needs, then enter these markets. Organizational structure and capabilities slow response time ability and influence choice. Organizational processes weed out ideas that don"t address concept customers needs. Results and moving up-market to higher margin opportunities. New disruptive firm goes to that market and grows. How to avoid failure if you are the large firm. Design products based on task they are intended to serve rather than the customers who buy them. Monitor outside of your own industry and mainstream customers. Partner with young firms - strategic alliances. Establish venture units that are independent of parent organization.