An increasing number of journalistic articles and academic literature deal with the struggle of established companies to fend off the attacks by industry newcomers such as Airbnb, Spotify, Netflix, Google and many others. These companies enter traditional industries with innovative business models and compete in a manner, which makes it challenging for incumbent firms to understand their novel competition and respond effectively. This study introduces a typology of three stages of industry disruption that classify the newcomer’s developmental stage and describe the incumbent’s competitive position in terms of competition intensity and remaining time to respond. It is demonstrated how incumbents may conduct their strategic reasoning along these stages to arrive at a strategic goal and evaluate possible counter-measures.
Table of Contents
- 1 Introduction
- 2 Understanding Competition through Disruptive Business Models
- 2.1 The Distinctive Features of Disruptive Business Models
- 2.2 The Three-Stage Model of Industry Disruption
- 3 Evaluation of Strategic Options along the Three Stages of Industry Disruption
- 3.1 Strategic Options at the Niche Construction Stage
- 3.2 Strategic Options in the Niche Overlap
- 3.3 Strategic Options in the Mainstream Spillover
- 4 Model Implications, Limitations and Recommendations
Objectives and Key Themes
This study aims to create a strategic framework that helps traditional companies anticipate and respond to disruptive business models from industry newcomers. It seeks to explain why disruption repeatedly occurs, why incumbents react slowly, and what criteria are most important when addressing this type of competition. The framework uses principles from evolutionary biology to understand the dynamics of competition.
- Industry disruption by innovative business models
- Strategic response of incumbent firms to disruptive entrants
- A three-stage model of industry disruption
- Evaluation of strategic options at each stage of disruption
- Application of evolutionary biology principles to competitive dynamics
Chapter Summaries
1 Introduction: This chapter introduces the phenomenon of disruptive business models challenging established firms in various industries. It highlights the challenges faced by incumbents in developing effective strategic responses and questions why this phenomenon persists across different industries, why incumbents are slow to react, and what criteria should be prioritized when addressing disruptors. The chapter sets the stage for the development of a strategic framework to help traditional companies anticipate and respond to these challenges.
2 Understanding Competition through Disruptive Business Models: This chapter delves into the nature of competition driven by disruptive business models. It examines the distinctive features of these models, differentiating them from traditional competitive approaches. A key contribution is the introduction of a three-stage model of industry disruption, which classifies the newcomer's development stage and describes the incumbent's competitive position in terms of intensity and response time. This model serves as the foundation for the strategic framework developed in subsequent chapters.
3 Evaluation of Strategic Options along the Three Stages of Industry Disruption: This chapter explores strategic options available to incumbents at each stage of the three-stage disruption model introduced in Chapter 2. It analyzes potential strategic responses at the Niche Construction stage, the Niche Overlap stage, and the Mainstream Spillover stage. For each stage, the chapter discusses various strategic options and their potential outcomes, providing a decision-making framework for incumbents facing disruptive competition. This chapter builds upon the theoretical framework laid out in Chapter 2, offering actionable insights for strategic management.
4 Model Implications, Limitations and Recommendations: This chapter discusses the implications of the proposed three-stage model of industry disruption, acknowledging its limitations and offering recommendations for further research and application. It assesses the practical applicability of the model and discusses potential challenges in its implementation. The chapter concludes by summarizing the key findings and contributions of the study.
Keywords
Disruptive innovation, business model competition, competitive dynamics, strategy evaluation, inter-species competition, intra-species competition, strategic framework, industry disruption.
Frequently Asked Questions: A Strategic Framework for Responding to Disruptive Business Models
What is the main topic of this study?
This study develops a strategic framework to help established companies anticipate and effectively respond to disruptive business models introduced by industry newcomers. It examines why disruption repeatedly occurs, why incumbents often react slowly, and what key factors should guide their responses.
What methodology does the study employ?
The study utilizes principles from evolutionary biology to analyze the dynamics of competition between established firms and disruptive entrants. This provides a unique lens to understand the competitive landscape and inform strategic decision-making.
What is the three-stage model of industry disruption?
The core of the framework is a three-stage model of industry disruption: Niche Construction, Niche Overlap, and Mainstream Spillover. This model classifies the disruptive newcomer's development and the incumbent's competitive position, aiding in the assessment of response time and intensity.
What strategic options are analyzed in the study?
The study analyzes strategic options available to incumbent firms at each stage of the three-stage disruption model. These options are explored for the Niche Construction stage, the Niche Overlap stage, and the Mainstream Spillover stage, providing actionable insights for strategic management.
What are the key themes explored in the study?
Key themes include industry disruption caused by innovative business models, strategic responses of incumbent firms, the three-stage model of disruption, strategic option evaluation at each stage, and the application of evolutionary biology to competitive dynamics.
What are the limitations and recommendations of the study?
The study acknowledges the limitations of its proposed three-stage model and provides recommendations for further research and practical application. It discusses potential challenges in implementing the model and summarizes key findings.
What are the key words associated with this study?
Key words include disruptive innovation, business model competition, competitive dynamics, strategy evaluation, inter-species competition, intra-species competition, strategic framework, and industry disruption.
What is covered in each chapter?
Chapter 1 (Introduction): Introduces disruptive business models and the challenges faced by incumbents, setting the stage for the strategic framework. Chapter 2 (Understanding Competition): Delves into disruptive business models, introducing the three-stage model of industry disruption. Chapter 3 (Evaluation of Strategic Options): Analyzes strategic options at each stage of the disruption model. Chapter 4 (Model Implications): Discusses the model's implications, limitations, and recommendations for further research.
Who is the intended audience of this study?
This study is intended for academic use, specifically for analyzing themes related to competitive strategy and industry disruption. The information is presented in a structured and professional manner, suitable for researchers and academics in the field.
- Citation du texte
- Nils Berkemeyer (Auteur), 2015, Competing with Disruptive Business Models in Traditional Industries. Conceptualisation of a Strategic Framework, Munich, GRIN Verlag, https://www.grin.com/document/321701
