Mar 20 (Ch 13): Creating Innovative Organizations

What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? They are all disruptive technologies. Disruptive technologies redefine the competitive playing fields of their respective markets. Disruptive technologies tend to open new markets and destroy old ones. Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets, but virtually never lead in markets opened by new and disruptive technologies.

LEARNING OUTCOMES

13.1 Compare disruptive and sustaining technologies.
Disruptive technology – a new way of doing things that initially does not meet the needs of existing customers
• Disruptive technologies redefine the competitive playing fields of their respective markets.
• Disruptive technologies tend to open new markets and destroy old ones.
• Disruptive technologies typically cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies

Sustaining technology – produces an improved product customers are eager to buy, such as a faster car or larger hard drive
• Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets
• Sustaining technologies virtually never lead in markets opened by new and disruptive technologies

13.2 Explain how the Internet caused disruption among businesses.
The Internet has completely disrupted the way businesses operate, employees communicate, and products are developed and sold. Here are a few examples:
• Travel site Expedia.com is now the biggest leisure-travel agency, with higher profit margins then even American Express.
• $35 billion annual online music downloads are wrecking the traditional music business.
• Dell increases profit margins while cutting prices by using the Internet to link suppliers and customers.
• eBay is one of the nation’s top 15 retailers.

13.3 Define the relationship between the Internet and the World Wide Web
The Internet is a global public network of computer networks that pass information from one to another using common computer protocols. The World Wide Web is a global hypertext system that uses the Internet as its transport mechanism. The World Wide Web operates on the Internet.

13.4 Describe the Internet’s impact on information along with how these changes are affecting businesses
The Internet has changed the way the world accesses, views, finds, and uses information.
• Easy to compile – searching for information on products, prices, customers, suppliers, and partners is faster and easier when using the Internet
• Increased richness – Businesses and customers can collect and track more detailed information when using the Internet
• Increased reach – Businesses can share information with numerous customers all over the world
• Improved content – Content and product description establish the common understanding between both parties to the transaction

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Business Driven Technology (Customized WMU Edition)
Baltzan & Phillips.