A Disruptive Technology - Essay Example

A disruptive technology is a technology that unexpectedly displaces an established technology (Techtarget, . Disruptive technologies occur in all major industry sectors. The pc industry is an example of an industry that is deeply impacted by disruptive technologies. According to Moore’s Law computing speeds are going to double every two years (Intel, 2010). The steel industry was revolutionized by the use of the mini-mill. Disruptive technologies impact the business outcomes of an enterprise.

Managers have to take measure to deal with disruptive technologies. A strategy that can be used to battle against disruptive technologies is to invest money in research and development in order to have the next generation of products available to replace older products. Introducing products of higher quality can help offset the effects of disruptive technologies. In the different jobs I have had I have noticed how disruptive technologies have impacted each industry. I worked in the retail industry.

There I saw how products became obsolete after new products replaced them. Technologies such as the cassette player were replaced by the CD player to be then replaced by the iPod. I have also worked in the mobile phone technology sector. The company I worked for introduced new phone products every few months. Each new phone in succession includes better features such as cameras with higher resolution. Due to the fast turnover of merchandise the company had an exit strategy to get rid of the phones once the new one came in.

The firm would sell the inventory of old phones in secondary online markets. Prior to making a bulk purchases for new phones the company would estimate the future demand for the products to estimate how big the order had to be. A third job I held in the past was in a car dealership. Car companies each year introduced car models to attract customers. A current disruptive technology in the automobile industry is electric automobile technology. The mpg mileage electric hybrid vehicles such as the Volt 210 model can offer make the fuel mileage efficiency levels of traditional cars obsolete.

The Volt can give up to 210 miles per gallon. ReferencesIntel.com (2010). Moore’s Law. Retrieved November 21, 2010 from http://www.intel.com/technology/mooreslaw/index.htm Techtarget.com (2010). Disruptive Technologies. Retrieved November 21, 2010 from http://whatis.techtarget.com/definition/0,,sid9_gci945822,00.html 1. The market expansion strategies used for domestic and international locations are different because there are variables such as culture that create risk for the investor. In the Starbucks case the company knows the United States marketplace well thus they prefer to own a higher percentage of the stores.

Starbucks is expanding into foreign locations. In order to benefit from the expansion and to reduce its business risk the firm prefers to use licensing agreements with local investors. 2. I agree with both decisions of introducing a cheaper branded coffee and offering a $4 breakfast menu. The cheap breakfast menu brings in higher volumes of customer traffic into the store. Due to the decision of McDonalds to expand its McCafe concept Starbucks can offset the competition by offering a good coffee alternative at a price point that is similar to the McDonalds offering.

The breakfast products can increase the revenue stream of the company because regular coffee drinkers will pay the premium prices as well as purchase the breakfast as a by-product. The brand value of Starbucks is so strong that the VIA Ready Brew product will not dilute the brand image of the company. The thing that distinguishes a brand from an unbranded product is the customer’s perception and feelings about the product’s attributes and how they perform (Kotler, 2003).3. In the long run the coffee wars are going to be won by Starbucks Café.

Starbucks has built a corporate empire with over 16,635 stores across the globe (Starbucks, 2009). The McCafe concept is going to rollout about 1,200 stores. As the first entrant in the marketplace Starbucks holds a significant competitive advantage in terms of market share. Starbucks has built a great physical environment for customer to enjoy their drinks with added services such as Wi-Fi internet connectivity. ReferencesKotler, P. (2003). Marketing Management (11th ed.). New York: John Wiley & Sons.

Starbucks.com (2009). Starbucks Company Timeline. Retrieved November 21, 2010 from http://news.starbucks.com/images/10041/StarbucksCompanyTimeline-JAN2010.pdf