Wednesday 1 February 2023

Digital disruption

Digital disruption happens when one organisation leverages technology to fundamentally change the way an industry works while gaining a competitive advantage, often times resulting in taking a industry or market lead, leaving the competition struggling for survival. Digital disruptors accomplish this by providing more value to customer at a lower capital and labour costs, generally by leveraging technology. 

The past twenty years is rife with such examples:

  • Netflix went from a small niche DVD mail service to the market leader.
  • Apple went from a failing computer hardware producer to leading the smartphone revolution.
  • Amazon went from a small online book retailer to completely revolutionizing the way customers purchase everything from books to toothbrush's to timbre.

Netflix vs Blockbuster

Netflix was founded in 1997, originally, the company offered a direct DVD-by-mail rental service where customers would order DVDs online, and the company would mail the DVD's to the customers' homes. In 1999, Netflix introduced a monthly subscription service where customers could rent an unlimited number of DVDs for a flat fee. This was a significant disruption to the traditional video rental industry, which relied on physical storefronts.

In 2000, Netflix proposed a partnership with Blockbuster, the largest video rental chain in the world at the time, to handle its online operations. Blockbuster declined the offer, believing that the online rental market was too small to be of any value. This decision would prove to be a critical mistake, as Netflix grew rapidly in the following years and would ultimately put Blockbuster out of business.

In 2007 Netflix introduced its streaming service, allowing customers to watch movies and TV shows instantly on their computers. This revolutionized the entertainment industry, it provided customers with a convenient and affordable way to access an enormous library of content without ever leaving their homes. As the streaming industry continued to grow, Netflix invested heavily in producing original content, such as the critically acclaimed series House of Cards and Stranger Things. This move cemented Netflix's position as the leading streaming service and further accelerated its growth, while Blockbuster continued to struggle with declining revenue and increasing debt. In 2010, Blockbuster filed for bankruptcy, and its remaining stores were eventually sold off to other companies.

Apple vs Research in motion 

In the early 2000s, Research In Motion (RIM) was the dominant player in the smartphone industry, thanks to their Blackberry line of devices. Blackberry's unique selling point was its secure email and messaging system, which made it a favorite among business professionals. At the time, Blackberry had a large and loyal customer base, and it was widely believed that RIM had a stranglehold on the smartphone market. However, the emergence of Apple's iPhone in 2007 quickly disrupted the industry and began to dethrone RIM.

When Apple introduced the iPhone, it was unlike anything the world had seen before. It had a large, high-resolution touchscreen display, a sleek design, and a user-friendly interface that was easy to use. The iPhone quickly gained a following, and soon it was clear that it was a game-changer in the smartphone industry. Apple's App Store also gave developers a platform to create innovative apps that enhanced the user experience, and this was a major factor in the iPhone's success.

RIM failed to adapt to the changing market, and its products quickly became outdated. The Blackberry's design remained largely unchanged for years, and the company was slow to adopt touchscreens and other new technologies. In addition, RIM's focus on enterprise customers meant that it missed out on the growing consumer market for smartphones. As a result, RIM's market share began to decline rapidly, and by 2013, it was clear that the company was no longer the dominant player in the smartphone industry.

Amazon vs the world

Amazon started in 1994 as a small online bookstore founded by Jeff Bezos in his garage. His goal was to create an online store that could offer more books than traditional brick-and-mortar stores could. Bezos saw the potential of the internet and the convenience it could bring to the shopping experience. With a focus on customer service and efficiency, Amazon quickly expanded its offerings beyond books, adding CDs, DVDs, and other items. The company was profitable within its first two years and went public in 1997.

Over the years, Amazon has continued to innovate and disrupt the retail industry. The company has expanded its offerings to include nearly everything under the sun, from electronics to groceries, and has become one of the most valuable companies in the world. Its success is due in part to its focus on customer experience and convenience, such as its Prime membership program which offers free shipping, streaming of movies and TV shows, and other benefits. Amazon has also invested heavily in technology, such as artificial intelligence and robotics, to streamline its operations and improve efficiency.

Today, Amazon is one of the largest retailers in the world, with a market capitalization of over $1.5 trillion. It has transformed the retail industry, forcing brick-and-mortar stores to adapt or risk becoming obsolete. Amazon's success has inspired countless entrepreneurs and startups, and has forever changed the way people shop. Despite criticisms of its impact on small businesses and concerns over its dominance in the market, there is no denying that Amazon has revolutionized retail and set a new standard for customer experience and convenience.