This paper addresses the understanding of disruptive change by highlighting the problems that arise when incumbent firms face disruptive innovations within their markets. In order to generate a new understanding of the competition that arises through disruptive change, disruptive innovations are linked to the concept of “hypercompetition” made by Richard A. D’Aveni. This concept implies the possibility to disrupt the market by implementing a new strategic orientation called the new “7-S Framework”. However this implies the necessity of reorganizing the incumbent firm. A possible approach is introduced. With this paper the author tries to identify a possible method to become disruptive for incumbent firms. The topic is “disruptive change and corporate response to it”.
Table of Contents
1. Introduction
2. Methodology
3. An overview of the phenomenon „disruptive change“
3.1 Defining disruptive change
3.2 The pathway of disruptive innovation
3.3 Why incumbent companies fail to cope with disruptive change
4. .... disruptive change lead to?
4.1 The concept of hypercompetition and linkages to disruptive change
4.2 The new 7-Ss as a strategic orientation for incumbent firms
4.3 Reorganizing the incumbent firm in order to create abilities to become disruptive
5. Conclusion
Objectives and Topics
This paper aims to explore the challenges faced by incumbent firms when confronted with disruptive innovations and proposes strategic and structural adjustments to maintain market competitiveness. By analyzing the intersection of disruptive change, hypercompetition, and organizational structure, the research seeks to identify how established companies can transition from a defensive stance to becoming a proactive, disruptive force themselves.
- The impact of disruptive innovation on established market leaders.
- The link between disruptive change and Richard A. D’Aveni’s concept of hypercompetition.
- Application of the "New 7-S Framework" for strategic orientation.
- The necessity of organizational restructuring, specifically project-based teams, to foster dynamic capabilities.
Excerpt from the book
3.1 Defining disruptive change
Disruptive change can be characterized as the process over time in which the environment of the firm constantly changes. Disruptive innovation is the factor provoking disruptive change. Disruptive innovation is exercised by new competitors within a market. Disruptive innovation, also called “disruptive technology” or “disruptive strategy”, is a process performed that successfully establishes new processes, new technologies and new business models within an industry or market which leads to the creation of new products or new services (Thomond, et al. 2003; Tidd, Bessant & Pavitt 2005). Disruptive innovations fundamentally change the old competitive rules, the demands and needs of the existing customers and hence the market structure and segments of existing industries (Christensen 1998, Gilbert & Bower 2002; Charitou & Markides 2003).
Summary of Chapters
1. Introduction: This chapter introduces the phenomenon of disruptive change, illustrating with examples like Kodak and Apple how market leaders can lose their position when they fail to adapt.
2. Methodology: This section outlines the research approach, focusing on a literature review to define disruptive change and analyze its impact through the lens of hypercompetition and the 7-S Framework.
3. An overview of the phenomenon „disruptive change“: This chapter defines disruptive innovation and explores the pathway by which new entrants exploit loopholes left by the over-performance of incumbent firms.
4. .... disruptive change lead to?: This section discusses the transition to hypercompetitive environments and examines how incumbent firms can use the 7-S Framework and project-based structures to regain their disruptive edge.
5. Conclusion: The final chapter summarizes the findings, reiterating that reorganization is essential for incumbents to overcome the limitations of their existing structures and successfully implement new, disruptive strategies.
Keywords
Innovation, Change, Hypercompetition, Organizational Structure, Strategy, Disruptive Innovation, Competitive Advantage, Market Entry, Incumbent Firms, Project Teams, 7-S Framework, Dynamic Capabilities, Business Models, Stakeholder Satisfaction, Strategic Planning
Frequently Asked Questions
What is the core focus of this research paper?
The paper examines the phenomenon of disruptive change and the struggles established incumbent firms face when reacting to disruptive innovations in their markets.
What are the primary thematic areas covered?
The main themes include disruptive innovation theory, the concept of hypercompetition, the application of the "New 7-S Framework," and the organizational restructuring required for firms to remain competitive.
What is the ultimate goal of the author?
The author aims to identify a method that allows incumbent firms to transform themselves into a disruptive force, effectively preventing them from being driven out of their markets.
Which scientific methodology is utilized?
The paper employs a comprehensive literature review, linking existing studies on disruptive innovation with Richard A. D’Aveni’s concept of hypercompetition to propose a new strategic approach.
What does the main body of the work address?
The main body investigates why established companies fail to react, analyzes how disruptive change creates a hypercompetitive environment, and proposes project-based organizational structures as a solution.
Which keywords best characterize this work?
Key terms include innovation, hypercompetition, strategy, organizational structure, and disruptive change.
How does "hypercompetition" relate to disruptive change in this paper?
The author argues that disruptive innovations often lead to a hypercompetitive environment, where competitive advantages vanish quickly and companies must adopt more dynamic strategic orientations to survive.
Why does the author suggest "project-based organizations"?
Project-based organizations provide the high degree of flexibility and speed necessary to implement the strategic guidelines of the 7-S Framework, which are often hindered by the rigid routines of core incumbent businesses.
- Quote paper
- Tim Nierobisch (Author), 2009, Disruptive Change and Corporate Response to it, Munich, GRIN Verlag, https://www.grin.com/document/162517
