13 Signs that Your Industry is at Risk of Being Disrupted

Innovations, whether in technology, business model innovation, or anything else, have the potential to disrupt any industry.

The essential question is not whether the sector is disrupted but how firms in that industry gain or lose market share due to that disruption.

In his book “The Innovator’s Dilemma“, Clayton Christensen outlines the theory of disruption development backed by multiple historical evidence. You can anticipate whether a given innovation will result in new entrants disrupting market leadership or incumbents maintaining dominance after you grasp how asymmetrical incentives in the market cause incumbents to act differently than new entrants.

Here are 13 signs I have identified that you should also look out for:

1. Your product pipeline is really safe. You have no risky products

2. Pricing pressure is moving you towards commoditisation

3. The time to bring a new product to market is long or increasing

4. New competitors aren’t using your business model (or a familiar one)

5. Your bottom line is increasing faster than your topline

6. There are only a few players in your industry

7. Your industry’s technology is lagging behind consumer technology by more than 5 years

8. Customers are unhappy but the way the industry works isn’t changing

9. It’s easy to digitise a portion of what you do with no loss of customer experience

10. The current customer experience is slow, inconvenient, expensive or  poor value (Try to look at this as a 3rd party)

11. Digitisation or automation would really undercut your cost model

12. You believe your barriers to entry are bulletproof because they always have been

13. Managers are resistant to innovative ideas because “that is the way things are here”

Every industry is in jeopardy nowadays, thanks to rapid technological advancements and dramatic/genius inventions. However, with effective management, this disturbance may be mitigated and profited from. In this approach, the damage to your industry and organisation will be minimal, and perhaps even beneficial. That is why you must remain ahead of the curve and keep a close watch on what’s going on in your field.

Denis Oakley

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