Identifying the Industries - Coursework Example

Identify the Industries Number) al Affiliation) Executive Summery There are two categories of technologies which are disruptive and sustaining. However, the term disruptive technology has been changed to disruptive innovation to show the fact that it is not the technology which is disruptive but the strategy involved in innovation is what leads to disruption. This paper takes a detail look at disruptive innovation in the service industry especially when delivering healthcare services. In begins by looking at the definition of disruptive innovation. It then looks at the benefits and the drawbacks of disruptive innovation while giving in depth examples. Finally, the paper makes a conclusion based on the discussion. The conclusion includes the fact that disruptive innovations are advantageous because they cater for customers who are not able to afford goods and services provided by dominant companies (Jordan, 2012). However, care needs to be taken when balancing the quality and the costs of providing products and services. Table of Contents IV. DeFINITION 4 V. BENEFITS AND DRAWBACKS OF DISRUPTIVE INNOVATION 6 VI.EXAMPLE OF DISRUPTIVE INNOVATION 9 VII. cONCLUSION 10 VIII. bIBLIOGRAPHY 12 Definition There are two categories of technologies which are disruptive and sustaining. However, the term disruptive technology has been changed to disruptive innovation to show the fact that it is not the technology which is disruptive but the strategy involved in innovation is what leads to disruption. Sustaining technologies can be described as an incremental increase in the performance or features of a product. Some of these technologies can be discontinued while others are incremental in nature. A good example of sustaining innovations is the desktop computers which have not significantly changed in its nature from when it was introduced. What has really changed are the I/O devices like the software used, the display unit, the ability and speed of the processor, and the keyboard (Spurgeon, 2012). Disruptive innovation can be described as being an innovation theory which is based on an approach applied when introducing a product or a service in a market. Disruptive innovation involves developing cheaper products to replace expensive products. Disruptive innovation focuses on low income groups (Harvard Business School, 2014). Many firms especially in the retail industry utilize disruptive innovation. This aims at capturing the mind’s eye of the market because it aims at bringing about a twist in the market that is not there in sustaining technology (Christensen, 2011). This also explains how companies that are starting up, in an effort to deliver more accessible and affordable solutions are able to be more successful than firms that were once dominant. A good example was seen in the case of Canon and Xerox. Canon brought a slower but cheaper tabletop photocopiers in the market which dominated those of Xerox. According to a research by a Harvard Business School Professor Clayton Christensen, disruptive innovations arise in all industry sectors (Saïd Business School, 2013). Even though market leaders focus on improving the quality of their products and services in a particular market, they often miss the less costly, more convenient, and simpler alternatives which are appealing to the low end market. There are two main variety of disruptive innovation that includes the new market disruptive innovations and the low end disruptive innovation. The new market disruption occurs where the product is not being provided at all by the existing companies in the market. These companies mainly target potential customers who are currently not using the products. These companies try to create a new market for their products. The established companies in these markets usually ignore these products until when it is too late and the disruption has already set in. The low end disruptive innovation is seen where products improve at a faster that than the rate in which a customer is able to adapt to new performances (Pogutz, 2009). In this case, a disruptive technology enters the market and provides a product which performs lower that that provided by other companies, but the products is usually above the requirement in certain sectors which helps the product to gain a foothold in the market. The products target customers who are satisfied with an acceptable product. After gaining a foothold in the market, the product tends to improve on its profit margin. Other companies would not like to invest a lot in not so profitable markets and would shift to focus on more striking customers. After encountering a number of such encounters, they will find themselves left with a small market and would finally be forced out of the market by the disruptive technologies. Benefits and drawbacks of disruptive innovations Disruptive innovation has its positive and negative aspects where companies are faced with opportunities and challenges while pursuing disruptive innovation both locally and in global markers. Disruptive innovation is advantageous in encouraging creativity through the ability to cultivate a competitive advantage over competitors when there is a proper strategy. The long term success of any organization involves reacting to the economic trend and also by having the willingness to sustain the focus of the company and to persevere (Wüstenhagen, 2008). Disruptive innovation also helps organizations expand on their markets through innovation of new or their existing products and services. Technological advancement as a result of disruptive innovation is clearly seen in the development of wearable technology like the Google Glass which is very useful when doctors are performing surgery. As this technology keeps on improving, there is hope that it will have a positive impact on the experience of practitioners and patient in order to facilitate better administration and receipt of care. It is hoped that in future Google Glass will improve the interaction between patients and doctors where, for example, doctors will be interacting with patient and at the same time will be able to pull up their medical history using the device (Honigman, 2014). However, Google Glass risks going against the rule of disruptive innovations in this sector. This is because even though the technology will improve the quality of healthcare being delivered, there is a risk that this will increase the costs of healthcare delivery. This will go against the main aim of disruptive technology which is to cater for the low end customer in the market. With new goods and services, organizations are also able to attract new customers. This also presents opportunities for the future because it opens doors for the possibility of new things while creating an environment for growth (Cohen, 2004). Disruption innovations also allow the organization’s culture to evolve as a learning community which welcomes change rather that fearing change. Disruptive innovation in the giving healthcare services can bring expensive and complex health care products and services down to affordable levels and ease accessibility. Disruptive innovation reduces the cost products and services, and also helps relieve some responsibilities from market leaders in the service industry a good example in delivering health services where this innovation helps the low cost providers, who are mostly the practitioners in clinics, to take less complicated work from high-cost provider, and at the same time they are able to deliver the services in a new venue (HSL PLP, 2014). Most of the people, who visit clinics, go for minor procedures like ear infections, headaches, and conjunctivitis. Insurance companies support clinics because they encourage patients to avoid high cost physician offices, emergency rooms, and urgent care centers which in turn reduce the costs of care. Moreover, disruptive innovation gives clinicians the opportunity to regain leadership in the healthcare industry by working together with other healthcare leaders like doctors to deliver more convenient, quality, and accessible cost-effective services to patients. Even though the cost of providing healthcare services in these clinics is low, care should be taken when balancing the quality of healthcare provided and the costs of providing such healthcare (Lucas, 2013). The reduction in the cost of providing healthcare risks compromising the quality because of the fact that most clinics use nurses instead of doctors to give services. Disruptive innovation on the other hand faces a number of limitations which includes the fact that businesses that apply these techniques can not gain big profits very fast because of their nature of addressing challenges of entering new markets. Other companies that are already in a market risk losing their market share to companies that practice disruptive techniques (Anthony, 2008). Even though the amount of business that clinics in the health sector siphon from doctors is not significant today, there is fear that this will change if the number grows significantly. Doctors have been seen to oppose clinics because they argue that clinics disrupt the continued care of patients and they do not have any uniformity in their quality standards. As with other disruptions, it is expected that clinics will hone their convenience, service, and quality, they will get better and expand beyond the services which they are currently providing. Example of disruptive innovation A good example of disruptive innovation is seen in the healthcare sector, the retail clinics have disrupted innovation because they usually operate outside the conventional physician offices. However, these clinics are acceptable because of the use of electronic medical record (EMR) that has a computerized physician order entry. In some cases, EMRs have e-prescribing applications embedded in them. Alerts, prompts, and reminders using evidence-based decision support help nurses who are mostly in these clinics to make informed decisions (Savage, 2010). Disruptive innovations in delivering health services help the low cost providers, who are mostly the practitioners in clinics, to take less complicated work from high-cost provider, and at the same time they are able to deliver the services in a new venue. Most of the people, who visit clinics, go for minor procedures like ear infections, headaches, and conjunctivitis. Insurance companies support clinics because they encourage patients to avoid high cost physician offices, emergency rooms, and urgent care centers which in turn reduce the costs of care. Conclusion It is clear that in order to ensure the long term success of companies, they need to apply disruptive innovations that either reshapes the existing market by providing convenient, simple, and cheap innovations in order to satisfy the needs of customers who have been ignored by the industry leaders. In most cases, market leaders in these markets have no interest in pursuing these innovations because of the notion that they do not address the needs of their best customers and also because of the belief that these innovations would bring low profits. Disruptive innovations are advantageous because they cater for customers who are not able to afford goods and services provided by dominant companies (Jordan, 2012). Dominant companies in most markets innovate faster than the rate of change in their customers’ lives. They then end up developing products and services that are too expensive, too inconvenient, and too good for most customers. However, through disruptive innovations new entrants are able to fill this gap and are able to provide for customers who are not interested in keeping up with changes in innovation. Many healthcare technologies and healthcare institutions have catered for most of the patients with conditions that are not life threatening. Will all the advantages of disruptive technologies in this sector, care should be taken. This is because even though the technology will improve in some cases like in the case of using Google Glass, the quality of healthcare being delivered, there is a risk that this will increase the costs of healthcare delivery. This will go against the main aim of disruptive technology which is to cater for the low end customer in the market. Also even though the cost of providing healthcare services in clinics is low, care should be taken when balancing the quality of healthcare provided and the costs of providing such healthcare (Weick, 2013). The reduction in the cost of providing healthcare risks compromising the quality because of the fact that most clinics use nurses instead of doctors to give services. To improve services in the healthcare services, there is need to put in effort towards technologies that can improve the access and affordability of healthcare services which will in turn address the needs of the majority. However, it is not wise to believe that the needs of patients in the healthcare sector will be catered for by simply using disruption method. There is need to feel the gap between the healthcare services that is an institution is capable of providing in a particular market based on the technological innovation and the healthcare that is able to provide based on the limited amount of resources. Bibliography Anthony, S. D. (2008). The innovators guide to growth: Putting disruptive innovation to work. Christensen, C. M., Christensen, C. M., Christensen, C. M., Christensen, C. M., Raynor, M. E., Christensen, C. M., Dyer, J.,.. Gregersen, H. B. (2011). [Disruptive innovation: The Christensen collection]. Cohen, A. B., & Hanft, R. S. (2004). Technology in American health care: Policy directions for effective evaluation and management. Ann Arbor: University of Michigan Press. Harverd Business School,. (Director). (2014). The Explainer: Disruptive Innovation [Motion Picture]. HLS PLP. (Director). (2014). Disruptive Innovation Conference - The Nature of Disruptive Innovation in Professional Services [Motion Picture]. Honigman, B. (2014, 9 10). The 7 Biggest Innovations in Health Care Technology in 2014 (Infographic)l. Retrieved from Get Referral MD: http://getreferralmd.com/2013/11/health-care-technology-innovations-2013-infographic/ Jordan, J. M. (2012). Information, technology, and innovation: Resources for growth in a connected world. Hoboken, New Jersey: Wiley. Lucas, D. P. (2013). Disruptive transformations in health care: Technological innovation and the acute care general hospital. Pogutz, S., Russo, A., & Migliavacca, P. (2009). Innovation, markets and sustainable energy: The challenge of hydrogen and fuel cells. Cheltenham, UK: Edward Elgar. Saïd Business School, Oxford University. (Director). (2013). Clayton Christensen on disruptive innovation - Clarendon Lectures [Motion Picture]. Savage, G. T., & Fottler, M. D. (2010). Strategic Human Resource Management in Health Care. Bradford: Emerald Group Pub. Spurgeon, P., Burke, R. J., & Cooper, C. L. (2012). The innovation imperative in health care organisations: Critical role of human resource management in the cost, quality, and productivity equation. Cheltenham, UK: Edward Elgar. Weick, C. W., Jain, R., & Triandis, H. C. (2013). Managing research, development and innovation: Managing the unmanageable. Hoboken, N.J: Wiley. Wüstenhagen, R. (2008). Sustainable innovation and entrepreneurship. Cheltenham, UK: Edward Elgar. Read More