TRANSFORMING BUSINESS DEVELOPMENT

MANTHAN 2015

EDITOR’S NOTE

TEAM SUMMIT

President

ARJUN KRISHNAN

Vice President

PRATYUSH PANDA

Creatives Head

MEGHNA GUPTA

Editorial Head

VIBHU VATSALA

Treasurer & Event Head

RIDDHI KUNDU

New Initiatives Head

TARUN GUPTA

Dear Readers,

Thinking out of the box and coming up with innovative ide-

as alone, might not change the world. But coupled with

persistence and effort, it may lead to the creation of disrup-

tive innovations. The status quo of the industry changes

forever.

SummIT- The Technology Cell of NMIMS, presents to you

the annual magazine ‘MANTHAN’ on the theme “Disruptive

Innovations”. This edition includes an exclusive chat with

the renowned author Mr. Ivan Bayross, focussing on the

current trends of the e-commerce industry, the five best

articles on the cover theme selected from the huge number

of entries received from reputed b-schools across India.

It is our constant endeavour at SummIT to keep the readers

abreast with the latest technological innovations that have

the potential to make an impact in the coming future. The

Techbytes section looks at two such disruptive innovations

Printrbot and Beacon Technology. To promote and honour

the spirit of entrepreneurship in technology, in this edition,

we take a closer look at two startups – Coursera and Kick-

starter. 2014-2015 has been a very promising year for Sum-

mIT. We take you through the highlights of the year under

the chronology of events section.

We thank the authors and the esteemed guest for their val-

uable contributions. We are also grateful to our readers’

constant patronage which has encouraged MANTHAN to

reach new heights.

We would love to hear from you, for any feedback or sug-

gestions, please feel free to write to us at sum-

mit@nmims.org.

Enjoy Reading!!

-The Editor, MANTHAN

MANTHAN 2015

WHAT IS IN STORE...

DISRUPTION– THE NEW AGE COMPETITIVE

STRATEGY

GUEST SPEAK-INTERVIEW WITH MR.IVAN BAY-

ROSS, A TECH GURU

TECHNOLOGY

DRIVEN DISRUPTIVE

INNOVATION

STARTUP STORIES

RIDING THE DISRUPTION WAVE

MANTHAN 2015

TECH CHAT WITH MR.IVAN BAYROSS

TECH – CHAT

1

SummIT: What are the current risks in the

E-commerce segment? How can a compa-

ny look to mitigate these risks?

Ivan: One of the major risks prevalent to-

day is delivery. The difference between a

brick and mortar model and an e-

commerce model is the fact that in a brick

and mortar model you get your product as

soon as you pay for it. In an e-commerce it

might take anywhere between a few hours

to a few days to receive the product. An-

other issue in delivery are the courier

companies. At present most of the compa-

nies are delivering through courier ser-

vices. There are more than 1 lakh pin

codes in India and courier companies de-

liver only to around 5000 pin codes. So

there is a huge market that cannot be ca-

tered to unless an e-commerce company

starts its own courier service. The second

issue is violation of taxes by the e-

commerce companies. All of the top 4

companies have been collectively fined

about INR 57 crores by the Indian Govern-

ment. This is because they are violating a

number of taxes that are implemented

differently in different states. As of today

all these companies chose not to appeal

against this fine. Currently the state which

has filed this violation case is Kerala. If all

the 28 states follow suit against these

companies, then they will run out of busi-

ness. So the rules have to be changed by

the government in order to support these

e-commerce companies.

There is also an internal issue of chain of

command which should be controlled.

Mr. Ivan Bayross, an author of over 68 books

is a specialist on e-commerce and its current

trends in the industry. Mr. Bayross is an en-

trepreneur and a trainer, having taught in

SPJIMR, NMIMS, Don Bosco and other reput-

ed colleges. He specializes in Java, HTML5,

PHP, ANSI SQL, Visual Basic and is a staunch

supporter of Digital Marketing. He provides

free online training on digital marketing and

conducts training sessions on weekends.

Team SummIT is honoured to present before

you excerpts of our interview with Mr. Ivan.

MANTHAN 2015

TECH—CHAT

2

SummIT: The boom in the e-commerce

space saw many companies come up

with different offerings. But only some

succeed and most fail. What can be the

reason behind this?

Ivan: There is a strange thought process

that occurs among the Indian companies.

One guy opens a chemist store in a locali-

ty and within 10 months you will find 5

guys with a chemist store. The profit that

now each of them earn is less than what

the first guy was earning initially. This is

called the “me-too” phenomenon. This is

what happens in the e-commerce space.

The companies are copying each other

and coming up with the same offerings.

You need more than this to have a suc-

cessful business model. One should study

the market needs, size, and de-

mographics and use some common

sense. Just replicating other’s ideas won’t

sustain the business for long. The big and

the successful companies are investing in

studying the market. Hence, those are

the ones who will eventually survive.

SummIT: Companies like Ola, Uber, Big

Basket are causing some disruptions

with their innovative business models.

How do the traditional businesses com-

pete with these companies?

Ivan: It can’t be said clearly as to what

will happen as of now. But some of the

trends that are coming up are that the e-

commerce companies are tying up with

the local kirana stores. For example, Big

Basket is thinking of moving their prod-

ucts to the local groceries and allowing

them to distribute their products. Now

the problem here will be those of logistics

and maintaining a clear track of all the

grocers and the amount of products dis-

tributed to them. In this process the local

grocer will get a cut of the price. Such

types of collaborations are will certainly

happen in the future. But to answer this

question to the point, the traditional

businesses won’t be able to compete

with these e-commerce players.

SummIT: What do you think is the most

important role in the e-commerce indus-

try and how do MBAs fit into that role?

Ivan: Truth to be told, the only important

role relevant today is that of a digital

marketing manager. Someone has to real-

ise that digital marketing is not social me-

dia marketing. Social media marketing is

just one vertical. The rules of marketing

for Facebook is different from that of

Linkedin. There is a dearth of talent in

digital marketing. Hardly anyone can cre-

ate a different set of advertisements for

Facebook, Linkedin and Twitter. This is

where the gap is and this is where skilled

people are needed.

HR and Finance are required roles but

their job is mostly the same and that is

based upon cost-optimization. The huge

bubble is happening in the marketing

space. And this is where the

MBAs in marketing fit in.

MANTHAN 2015

EVENTS

3

2014-2015 has been an immensely suc-

cessful year for SummIT. Activities for the

year started in July, 2014 with an Adobe

Photoshop Workshop being organized by

SummIT, in partnership with Arena Multi-

media. During Augustus, 2014, the cell or-

ganized a two day quizzing event (Ellipsis)

which saw more than 130 participations.

This was followed by Inter’n’Act, a highly

interactive session where the second

years’ shared their summer internship ex-

periences with the first years’.

During Parichay in July, 2014 SummIT or-

ganized the first online treasure hunt of

the year called The Pylon of Isis. The

treasure hunt was a resounding success

and witnessed participation in huge num-

bers. Khoj (online treasure hunt), the flag-

ship event of the cell was held during

Paragana in November, 2014. Khoj was

even bigger than the previous year. With

750+ participants it was one of the most

successful events of the year for the col-

lege. Spread over two days, the treasure

hunt witnessed international participation

as well.

SUMMIT- CHRONOLOGY OF EVENTS(2014-2015)

MANTHAN 2015

EVENTS

4

November end saw chuckles, with the cell

organizing a Stand-Up Comedy show by

Deepak Gopalakrishnan (a.k.a Chuck Go-

pal). Chuck was again invited on campus

to host a digital marketing workshop

(Digitize). Having worked closely with vari-

ous websites like PaGaLGuY.com,

Sportskeeda.com and Cricinfo.com, Chuck

imparted invaluable digital marketing

knowledge to the audience. In January

and March 2015, SummIT organized the

Powercel workshops. The first was a ses-

sion on Microsoft Powerpoint in which

winners and finalists of GE Genius, NUS

Cerebrations, Mahindra War Room, ITC

Interrobang, Titan Elevate, Marico Over

The Wall and JP Morgan Deal were the

speakers at the event. They shared great

insights regarding making effective

presentations and winning competitions.

The second session in association with

Forevision, was held in March. It was an

extensive workshop on Microsoft Excel; a

much needed one for the first years’, who

would be going in for their summer in-

ternships in a month’s time. During Eu-

phoria, 2015 the cell organized the much-

awaited LAN Gaming Competition (Zero

Respect). It comprised of FIFA, NFS and

Counter Strike. The event witnessed a

huge turnout.

SummIT in association with PayUMoney,

also organized a National Level B-School

Case Study Competition- ACE the CASE, in

March 2015. The cell has also offered its

members the opportunity to work on live

corporate projects. Snyxius and iitiimshaa-

di.com are a couple of such projects which

received notable appreciation from the

industry experts. Under the able mentor-

ship of Dr Nilay Yajnik the cell has contin-

ued to excel over the years and will con-

tinue to do so in the future.

MANTHAN 2015

STARTUPS

5

Coursera is an education platform that

offers free online courses to everyone by

partnering with top universities. It offers

massive open online courses on subjects

like physics, mathematics, history, arts,

music, computer science, biology etc. Its

partner universities include Stanford,

Georgia Tech, Princeton, John Hopkins

and Indian School of Business. As of 2014

Coursera have had 22,232,448 enrol-

ments from students representing 190

countries across 571 courses. This is a sig-

nificant number given the fact that the

company was launched just 3 years ago.

Coursera was founded by Andrew Ng and

Daphne Koller in 2011. The company is

headquartered in California, USA and

earns revenue mostly by verified certifica-

tion fees. These certificates are given on

successful course completion. It had

earned $1 million in September 2013

through verified certificates. The courses

are open and free for everyone and it’s

only the certification that requires a fee.

The course includes video tutorials, inter-

active quizzes, graded assignments and

academic notes. The assignment and

quizzes can be submitted online which are

then graded. To improve on their assess-

ment process, Coursera started using peer

assessments. In some cases, assignments

cannot be graded by a computer as it may

be qualitative in nature. That’s where

peer assessments came in handy, where

learners themselves evaluate and give

feedback on each other’s assignments.

Various studies have found this technique

to result in accurate feedback for the

learner and a valuable learning experi-

ence for the grader.

In January 2014, Coursera introduced

Specializations, which consist of a group

of related courses designed to help stu-

dents deepen expertise in a subject.

There are currently more than 25 such

programs available in several subject are-

as, from data science to writing. If a stu-

dent earns a verified certificate in all the

courses listed under that specialization,

he gets a specialization certificate.

MANTHAN 2015

STARTUPS

6

The specialization course ends with a Cap-

stone Project that allows students to ap-

ply their knowledge learnt to relevant and

real-world challenges. Coursera had re-

cently partnered with Google, Instagram

and 500 other start-ups to work on live

projects. Online education has seen a

huge growth in recent times and Coursera

is at the head setting new trends. With

mobile apps and other new features, it

looks set to continue forwards its growth

story.

Kickstarter is a global crowdfunding

platform based out of New York. Crowd-

funding is a relatively new practice of rais-

ing money for a venture from a large

number of people, mostly over the inter-

net. It is changing the way funds are gen-

erated and has become a widespread

practice these days. It was one of the first

firms that launched this service early in

2009. Since its launch, 8.1 Million people

have pledged more than $1.6 Billion,

funding 79,000 creative projects.

Anyone can launch a project and they

have complete control over it; Kickstarter

doesn’t develop the projects themselves.

How it works is that the project creators

set a goal for the funding and a deadline

of receiving these funds. Then they pro-

mote it by creating a project page, up-

loading videos and offering returns to

their backers. Once the page is ready, the

project is launched and shared on the

website. People who like the project can

pledge money to help it come alive. The

unique feature of Kickstarter is that the

funding is “all-or-nothing”, i.e. projects

must achieve their funding goals to re-

ceive any money – they either get all the

money or they get nothing. If the goal is-

n’t reached, the money is returned back

to the respective donators. The projects

are on a diverse range such as film-

making, music, photography, fashion and

design, games, publishing etc. Kickstarter

is not meant to gain financial returns for

promoters; the project creators have

complete ownership of their work.

Kickstarter was founded by Charles Adler,

Perry Chen and Yancey Strickler; Chen

serves as the Chairman while Strickler is

the CEO. Its revenue model is that it

charges a fee on each successful project

funding. Kickstarter levies a 5% fees from

the fund of a successful project. In the US,

Amazon Payments processes the pledges

and in other countries it is done by a third

party payments processor. The fees they

charge comes roughly around 3-5% of the

total funds. If the funding goal of the pro-

ject isn’t reached then there are no fees.

Kickstarter works on an innovative con-

cept and more importantly it is making a

huge social impact by helping dreams of

many to come true.

MANTHAN 2015

TECHBYTES

7

Apple introduced iBeacons in 2013 and

activated the technology across its 254

retail stores, and retailers began testing

the technology in stores in early 2014.

Beacons enable more granular location

awareness that GPS alone cannot provide,

meaning they offer tremendous potential

to target customers with relevant, person-

alized and appropriately timed messages.

Following suit, multiple competitiors like

Estimote, Bluecats, Bluesense and Gelo

have launched their own beacons that

can interact with both iOS and Android

devices. The underlying communication

technology is Bluetooth Low Energy (BLE).

With an iBeacon network, any brand, re-

tailer, app, or platform will be able to un-

derstand exactly where a customer is in

the brick and mortar environment. This

provides an opportunity to send custom-

ers highly contextual, hyper-local, mean-

ingful messages and advertisements on

their smartphones.

The typical scenario looks like this. A con-

sumer carrying a smartphone walks into a

store. Apps installed on a consumer’s

smartphone listen for iBeacons. When an

app hears an iBeacon, it communicates

the relevant data to its server, which then

triggers an action. This could be some-

thing as simple as a push message

[“Welcome to Best Buy! Check out new

BEACON TECHNOLOGY

In the year 2011, Printrbot was founded

by Brook Drumm in Lincoln, California to

manufacture affordable 3D printers. Ever

since, it has proved to be a cost-effective

and reliable solution for most Do-It-

Yourself (DIY) users, educational institu-

tions and manufacturers across the world.

In a short span of 4 years it has expanded

to 4000+ cities and 80+ countries. It also

happens to be the most funded technolo-

gy project on Kickstarter till date.

Printrbot is sold as fully assembled or as a

kit requiring assembly. It boasts of having

an assembly time as less as 45 minutes.

Calibration problems and adjustments

which are one of the major drawbacks of

other 3-D Printers, are not present in the

Printrbot models. At the same time it is

compatible with the latest open source

technologies. It uses fused deposition

modelling to produce plastic models of 3D

objects. Since creation, the original

Printrbot has been discontinued and re-

placed with newer versions which vary in

price, size and functionality. It has forged

successful partnerships with over 100+

schools and universities to make 3D

printing accessible to the student commu-

nity. One of the most amazing disruptions

in technology in the current decade, it is

sure to give toy manufacturers like Mattel

and Lego a run for their money!

MANTHAN 2015

TECHBYTES

8

PRINTRBOT

launches on Aisle 3!”], and could include

other things like targeted advertisements,

special offers, and helpful reminders

[“You’re out of Milk!”]. Other potential

applications include mobile payments and

shopper analytics and implementation

outside of retail, at airports, concert ven-

ues, theme parks, and more. Some of the

companies which are already using Bea-

con technology extensively are Hillshire

Brands, Macy’s, Starwood Hotels, Virgin

Atlantic, Japan Airlines, American Airlines,

Walgreens, Walmart, Nivea and Major

League Basketball (MLB). The potential is

limitless, and the technology has a bright

future.

MANTHAN 2015

ARTICLES

9

DISRUPTION – The New Age Competitive Strategy

S. P. Jain Institute of Management & Research

“Prasun worked as a Database analyst before pur-

suing MBA from SPJIMR. He is a passionate travel-

ler, observant photographer, a technology enthusi-

ast, and an avid singer”

Everything is fair in love and war; and

competition in a business environment is

like a cold war. Innovation has always

been the major strategy used by business-

es around the world to stay competitive.

The traditional paradigm of innovation

was to improve the performance of the

existing technology, thereby steeping up

the performance trajectory. However, val-

ue creation for customers may be much

simpler than high performing technology.

There is always a threshold level till which

customers can absorb and appreciate

which the traditional paradigm fails to ad-

dress.

This has lead to a gradual shift in para-

digm, over the last five decades, from a

continuous performance improvement to

that of something called ‘Disruption’.

Clayton Christensen coined this term and

today it has become a big buzzword. He

identified ‘Disruptive Innovation’ as a

product or service, so compelling in na-

ture that everyone rapidly abandons their

current way of doing things to this new

approach. IT has been the big enabler of

this disruption. The fundamental aspect

of disruption is to use the right bench-

mark, which becomes additive with time.

When that happens, we find entire prod-

uct lines – even the whole market – gets

created as well as destroyed overnight.

There are two major players in a disrup-

tion scenario – the Incumbent and the

Disruptor. The Incumbents are the ex-

isting market leaders following sustaining

innovation strategy. The Disruptors are

the agents of the disruptive innovation.

They don’t follow conventional notions of

strategy and market adoption, and some

of them have shown ability to destroy

companies and brands in a flash. Modern

day consultants often call them the ‘big-

bang’ disruptors.

PRASUN KUMAR DAS

MANTHAN 2015

ARTICLES

10

THE INNOVATOR’S DILEMMA: Why the Incum-

bents fail?

To understand means to counter, we need

to know what causes it. It’s evident that a

new kind of innovation is changing the

way in which the game is being played.

One of the most intriguing questions is -

why does a disruptive innovation almost

always come from a different market play-

er, letting a new leader to emerge? Why

can’t the existing market leader come up

with a disruptive innovation? On the con-

trary, how did leaders like Apple survive?

Clayton Christensen accounts this to the

‘Innovator’s Dilemma’.

Disruptive technologies have some com-

mon characteristics – they are cheaper,

simpler, smaller and often a lower per-

forming alternative to the existing tech-

nologies. The current market leaders,

over the years, develop sophisticated in-

novation systems; create high market

standards in terms of performance, and a

high brand value.

For them, a low margin disruptive ap-

proach doesn’t justify as a rational finan-

cial decision to make. This leads to the

‘dilemma’. They end up building up on

their own sandcastles, coming up with

more complex, high performing, and ex-

pensive products. The customers have

their own threshold to accept and absorb

performance, sophistication and price-

premium. They now look for simpler,

more convenient and budget-friendly al-

ternatives. This sets the stage for the dis-

ruptor to make an impact. Disruptive

technologies start making more sense;

delivering exactly what the customer will

like to have. There comes the decoupling

point when the customers start switching.

Survivors like Apple are visionaries. They

have an open mindset; instead of reacting

to changes around they become the

change, and have successfully able to up-

lift the customer’s expectations and level

of acceptance. They never fall prey of self-

complacency and bring up their own

brand of disruptive innovations in the

market.

ARTICLES

Innovation - SUSTAINING vs. DISRUPTIVE

An innovation that disrupts the market

today gets into the sustaining innovation

mode until they reach up to the custom-

er’s threshold expectation. When that lev-

el is reached, any further sustaining inno-

vation makes it vulnerable to disruption.

So, a disruptor today becomes vulnerable

to disruption in future.

Sustaining Innovation Disruptive Innovation

Product

Perspec-

tive

Scales up the performance of

the existing products

Radical product value proposi-

tion; underperforms current

market standards

Customer

Perspec-

tive

Improvisation that mainstream

customers appreciate – Com-

petence enhancing

Few niche customers appreci-

ates it in the beginning

For any form of innovation there are two

perspectives. The product perspective

gives the performance standard of the in-

novated technology. The customer per-

spective gives an idea on how the innova-

tion is being perceived by the customers.

Fig. 1: The graph showing shelf life of a technology in a disruption model

MANTHAN 2015 11

MANTHAN 2015

ARTICLES

12

A – Sustaining technology (S) keeps in-

novating at a pace far higher than the

rate in which Customer’s acceptance

level grows. This is the time when S goes

beyond the customer’s level of ac-

ceptance. An underperforming technol-

ogy (D) then starts disrupting into the

market of S. This technology D, then

continues to innovate itself in a sustain-

ing manner.

B - This is the time when technology D

sustains so long that its performance lev-

el crosses the threshold customer ac-

ceptance level. Some other technology

may come and disrupt the market of D

now.

THE SURVIVOR MODEL

When disruption starts, the incumbent

must work on its survival strategy. Clayton

Christensen accumulates his insights on

disruption and designed a survivor model.

The following model is an extension of

the same. This identifies the different pos-

sible counter strategy an incumbent may

resort to.

The BOX-PLOT

It’s evident from the Fig. 1 graph that eve-

ry technology has a shelf life, which de-

pends on the following two factors:

The rate of performance improvement

in the technology

The growth rate in the customer’s ac-

ceptable level of performance

To avoid disruption, companies have to be

able to anticipate the disruption first and

then formulate a counter strategy. Any

strategy will have one thing in common –

change. The survivor model (Fig. 2) shows

different reasons why an existing innova-

tor falls prey to disruption. Certain inher-

ent aspect within the incumbents makes

them vulnerable. They either fail to antici-

pate the disruption or to adapt according-

ly.

The Box-Plot, as suggested by Prof. Robert

Smith, University of Maryland, comes

handy there. It quantifies the incumbent’s

vulnerability to a disruption. For each fac-

tor to the Innovator’s Dilemma, a number

between 0-10 is put, signifying its likeli-

ness to occur and thereby identify possi-

ble strategy to undertake. The following

example will make it clear.

ARTICLES

Denial 4 The figures show that

this company is not very

old but has been highly

profitable and has an es-

teem brand image. Their

business is not high in

capital intensity. They

are somewhat able to

identify a possible dis-

ruption but their high

and consistent profit in-

tensity makes them fail

to pay much attention to

This company can make

use of its available capi-

tal to adapt to the dis-

ruptive technology –

either by launching a

competing product to it

or by acquiring it. In the

meantime, it can con-

tinue enjoying its cur-

rent profitability.

History 2

Resistance to

Change

7

Mindset 6

Brand 8

Sunk Cost 3

Profitability 8

Lack of Imagi-

nation

4

MANTHAN 2015 13 MANTHAN 2015

MANTHAN 2015

ARTICLES

14

STRATEGIES TO COUNTER DISRUPTION

The Survivor Model illustrates several strategies an incumbent can resort to proactively or reactively. Failure to do so essentially means failure to survive. Companies, with an ability to anticipate the future, will proactively use any of the strategies, not just to survive against disruption but also to diversify itself. Let’s try to understand each of the strategies.

ADOPT Abandon the existing technology and

adopt the new one, thus being an agent of disruption. Canon and Ni-kon were quick to realize the poten-tial of digital transformation in the imaging industry and shifted to it, and stopped making film cameras.

ELEVATE Increasing the shelf life of the sustaining

technology by raising the bar, which is the customer’s acceptance level. Reposition the product or technolo-gy to inculcate in the customer’s mind that they deserve better and can do better. This is a progressive strategy in terms of performance but it makes customers inclined on over-sophisticated and over-expensive products and services. E.g. Apple’s MacBook business

ADAPT Rather than fighting the disruption this

strategy aims at making it a part of the company. This is to adjust the existing business model or product

offering to accommodate the new innovation. It can be done in the fol-lowing ways:

COMPETE Launch a competing product in the mar-

ket similar to the new product having a

slightly higher performance. The earlier

this is done, the lesser the new technol-

ogy grows. After the advent of Amazon

Web Services, companies like Oracle

and IBM didn’t wait long to launch their

own cloud based infrastructure ser-

vices. Since, the new product will be

low in profitability this strategy may

hurt the revenue (i.e. cannibalism) but,

it will slow down the momentum of the

disruptor.

REVISE

Revisit the core business principles and

value proposition of a product being

offered – ‘job to be done’ principle. Ko-

dak failed to address that they are into

the imaging business, not in a film cam-

era business and hence failed to identify

the disruption brought by the digital

transformation of the industry. Thus, a

company should time to time revisit the

core operations to ensure that rele-

vance is not lost. If lost, relevance can

be regained in two ways –

Debalina Ray, T.A. Pai Management Institute, Manipal

REDESIGN Work on the reengineering of the prod-uct design or the business process to bring back the relevance. Apple rede-signed iPhone to a large screen model seeing the disruption in their mobile market created by large screen smartphones by Samsung and HTC. REPACKAGE Product offering should be replaced with solution offering, which includes a bundle of product and services. Pana-sonic understood their value proposi-tion is not just a TV but entertainment. They are offering complete entertain-ment package along with their TVs. ACQUIRE Either acquire or merge with the dis-

ruptor. This will put the reins in your

hand. After acquisition following can

be done –

The new technology or product line can be continued. But, this will again lead to cannibalism.

Kill the new technology – This will help temporarily. New innovation is like opening a Pandora’s box. The ac-quisition gains attention and new en-

trants will show up in the market acting as disruptors.

CONCLUSION

Innovation, being the basis of progress,

can’t stop. However, technology has

made the business scenario, a fast-

changing one, where market leaders are

born and destroyed overnight - a phe-

nomenon often called a creative de-

struction. The key to survival lies in the

ability to identify threats. A survivor

keeps a constant eye on new technolo-

gies – analyst reviews on them, thinks

and discusses with consultants to keep

strong vigilance, regularly performs sce-

nario analysis to derive upon a perfect

strategy to rediscover business for itself.

Often, risking cannibalizing oneself gets

necessary to innovate and survive; like

Steve Jobs said, ‘If you don’t cannibalize

yourself, someone else will’. This makes

Darwinism relevant, where there is an

intense struggle for existence and nev-

ertheless, the fittest one survives.

References

https://theoldspeakjournal.wordpress.com/tag/illegal-surveillance/

http://www.edrm.net/resources/data-privacy-protection/data-protection-laws/

india

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MANTHAN 2015 15 MANTHAN 2015

“Innovation is not about market timing. It

is about creating something that fulfills

an unmet need” ~ Jeremy Gutsche

Where all think alike, there is little danger

of innovation. But with the constant

evolving technology surmounting brains

and traditional capabilities, there is little

scope of no innovation. One of the classic

examples of legendary innovation is the

Internet and that of lack of innovation is

Kodak. The market shift from Kodak in

1999 to Instagram in 2014 has been mag-

nanimous. But the multi-value-addition

provided by Instagram now and the

unwillingness of Kodak to shift from con-

sumer photography market with its aver-

sion to learning new skills to innovate

then, is the reason of one’s success and

the other’s demolition.

Innovation has become the need of the

hour. The firms are in constant need to

find the untraced market needs, diversify

business and re-engineer business struc-

ture. Firms can enter into a market with

already existing competition (e.g. Tele-

communications sector) and try to create

a market for itself i.e. Red Ocean Strategy

or create an untapped market segment by

following Blue Ocean Strategy. They can

either restructure an already existing

technology with some value-addition

which we say Sustaining Innovation or in-

novate to capture a completely new mar-

ket i.e. Disruptive Innovation.

Disruptive Innovation, a term coined by

Harvard Business School Professor Clay-

ton M. Christensen, is a process by which

a product or service is introduced to trace

small unmet markets and then slowly dis-

place existing technologies, established

competitors and their market share by

threatening the status quo. Disruptive

technology has dipped into practically

every sector one can think of: IT, energy,

manufacturing, entertainment and trans-

portation among them.

History of Disruptive Technologies:

The history of disruptive innovation dates

back to the era when Personal Computer

(PC) displaced minicomputers and main-

frame. It also displaced typewriting and

forever changed the way we work and

communicate. While minicomputers in-

volved costly processes, PC processes

were cost-effective. PC’s in conjoint with

the TV-tuner cards was a move to eat up

the television industry.

Another innovation success is the World

Wide Web in connection with the Inter-

net. Before 1991, internet was a loose col-

lection of protocols, networks and tools

DISRUPTIVE TECHNOLOGY: THE FUTURE

IS HERE Debalina Ray, T.A. Pai Management Institute, Manipal

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MANTHAN 2015 16

tools built by university geeks. With the

introduction of World Wide Web and its

mass acceptance and success gave peo-

ple, firms and sectors to connect and

spread information online. The traditional

hand-written, time consuming era of

letter-writing got forced out by the Email

industry like Gmail, Yahoo mail, hence dis-

rupting the postal and greeting cards in-

dustry.

Graham bell’s iconic invention: Telephone

has been slowly taken over by the porta-

ble Mobile Phones making people just a

call away from anywhere. Smart-phones

are largely displacing cell phones. The

high MP of camera installed in the smart-

phones has started disrupting the digital

photography industry and eating up the

market share of prominent players like

Canon and Sony. While cassettes and tape

-recorder were displaced by Walkman and

MP3 Players, the availability of plethora of

apps has resulted in disruption of MP3

players, calculators, alarm clocks and GPS

devices. With the size of smartness in-

creasing at an alarming rate in the form of

phablets, tablets and IPads, these have

started displacing laptops, which them-

selves had taken over desktops immense-

ly. Factors like portability, status, less

physical space occupancy but high storage

capacity are leading to this dramatic shift.

Social networking has made a huge im-

pact on the way we communicate. The

free chat services provided by Whatsapp,

WeChat, Facebook or Skype have been

majorly crowding out the telecom indus-

try (both SMS and call services), E-mail

and Instant Messaging businesses.

We remember the old VCRs to record TV

shows. But this tedious technology slowly

got displaced by DVRs- TiVo and Replay

TV digital video recorders during 1990s,

by which fast-forwarding through com-

mercials became an easy task. And now

with Youtube, any TV commercial, sports,

movies or documentaries are just a click

away.

“At the heart of effective technology inte-

gration, technology offers opportunities to

be more actively involved in the learn-

ing experience” ~ Vanessa Vega

Technology won’t be able to replace

teachers. But teachers using the advanced

education technologies will be able to

replace the ones using traditional sys-

tems. E-learning is on the rise with tech-

nologies like Webinars. Amazon’s Kindle

has made its’ attempt in disrupting the

books industry.

Other big trends:

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MANTHAN 2015 17

Future Milestones :

3D Printing: It has the potential to turn

digital files into physical objects and revo-

lutionize the way we make almost every-

thing. The 3-D printing market is expected

to double by 2019. Companies are devel-

oping ways to 3D bio-print human tissue

such as blood vessels and organs.

Nike has used 3D printing into basketball,

football shoes and more recently using

SLS technology to prototype and manu-

facture the 2012 Vapor Laser Talon foot-

ball shoe for American football players.

Reduced production costs and less time

and money spent by the company. While

previously it took $50,000-$60,000 and 3

months production time, post 3D it took

$3000-$4000 and just 5 days for the

same.

New Balance is reportedly using 3D print-

ers to create custom fit shoes for profes-

sional athletes by emphasizing on light-

weight but efficient spike plates. The end

products can at times be printed at far

cheaper rate than it would be to buy from

a traditional manufacturer.

E-cigarettes: According to Citi’s report,

Electronic Cigarette is the second disrup-

tive technology that is bound to trans-

form the world.

The health risks, addiction, social stigma

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MANTHAN 2015 18

and negative perception of cigarettes

have paved the way to success for e-

cigarettes, which with their pure e-liquid

content act as a good option for those

who wish to cease smoking. Though in its

infancy, e-cigarettes, with its aggressive

marketing into the new market of

“vapers”, is expected to see 50% CAG in

coming years disrupting the established

cigarette industry.

Genomics: As per latest MIT report “First

healthy person was born in the U.S. with

his entire genetic makeup deciphered in

advance”. Genomics is a masterpiece in

the field of health. With fast, low-cost

gene sequencing, synthetic biology, low

cost in gathering DNA data, advanced big

data analytics, the genomics market is al-

ready exploding. It is targeted to have

profound impacts on health concerns,

how we produce food and its safety, how

we can monitor our environment and sus-

tain natural resources.

Mobile Internet: With the increase in pur-

chasing power and disposable income of

population, the sale of smartphones,

which provide us with a plethora of apps,

have increased. By 2015, it is predicted

that sales of tablets would surmount that

of personal computers and laptops.

With this, the day is not far when mobile

becomes the only means of internet con-

nectivity. Even e-retailer giant, Myntra an-

nounced its’ plans to shut down website

by year end and focus only on web-app as

60% of its’ sales happens through its mo-

bile application. With this mobile pay-

ment is also on the disruptive rise and

could one day be a trillion dollar market.

Autonomous cars: Initiated by Google,

fleets of driverless cars and taxis are the

future. Technological advancements with

multiple sensors, 3D cameras, GPS, LIDAR

(Laser-imaging detection and ranging) and

Artificial Intelligence are going to smooth-

en our drives with no more waiting in

traffic and efficient parking systems, auto-

mated braking technology. As per reports,

Autonomous cars could save Canadians

$65 per year; Road accidents to reduce

overall by 20%, saving 14000 lives by

2025.

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MANTHAN 2015 19

Conclusion:

The future of business is not limited and

tied to the permeation of Facebook,

Twitter, IPhone, and pins on Pinterest or

apps. It horizons to the limitless sky of un-

matching technology pace, how it affects

decision-making and business process

and a firm’s ability to adapt to them. All

these put together with timely response

can give a firm the competitive ad-

vantage. But an important question re-

mains, “At what point of time does an

evolving technology become disruptive?

And what attributes or processes consti-

tute a disruptive mechanism?” Such un-

answered questions pave way to the risk

of Digital Darwinism, when society and

technology evolve faster than one’s ability

to adapt.

In this rapidly moving competitive era, it’s

always “Survival of the fittest”, like the

way Fujifilm survived. It is about challeng-

ing self-status quo and constant invest-

ments in R&D. The fall from being an in-

dustrial giant to bankruptcy is always pre-

ventable. True innovation, high re-

investment on R&D, human capital need

to be constantly in pace with the chang-

ing macro-economic and micro-economic

environment to fend off the market share

attack. Else, it is likely for a firm to be ob-

solete like an old technology. It is im-

portant for corporations to realize the life

cycle of their products and business units,

which will help them creating new scope

to replace the ones that must inevitably

die. For corporations to live, it must be

willing to see its own business units die,

because if the corporation doesn’t kill

them off itself, competitors will. In the

end, it is always persistence over re-

sistance that will create the ladder to suc-

cess.

References

Nike: http://www.scdigest.com/images/Nike_3D.jpg

Genomics News:http://www.tumotech.com/2014/06/20/first-healthy-person-ever-born-in-the-u

-s-with-his-entire-genetic-makeup-deciphered-in-advance/

Tablet vs. PC statistics: http://www.extremetech.com/computing/185937-in-2015-tablet-sales-

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Tania Mallik and Debroop Banerjee

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21

Way back in 1908, the Ford “Model T” made its debut in the transportation in-dustry, hence disrupting the market for horse-drawn vehicles. Another such pro-ject was the Hippo Roller, designed by Pettie Petzer and Johan Jonker in 1997. It was a revolutionary water storage and distribution device, which brought a lot of relief to women and children in third world countries, who were faced with the daily daunting task of carrying heavy buckets of water to and fro. Disruptive innovations have shaken up the market once in a while, but made the lives of us, the consumers far more simple and con-venient. The term “Disruptive Technologies” was coined by Clayton M. Christensen in the year 1995. These disruptive innovations are capable of unsettling even the most successful and well-managed companies. Sears Roebuck was one of the biggest re-tailers in the world and accounted for al-most 2% of the retail sales in the United States in the 1960s. However, today it has lost market share to discount retailers like Walmart, Target Corporation and Best Buy. Sears simply failed to adapt to the disruptive practices of discount retailing. Digital Equipment Corporation was the

leading manufacturer of mini-computers in the mid-1980s. But by the early 1990s it was reduced to obscurity with the ad-vent of workstations and the low-margin personal computers which revolutionized the computer industry. The makers of personal computers like Apple and IBM hogged the limelight. Small table-top

Photocopiers ended the monopoly which Xerox once enjoyed, mini-mill technology changed the way the North American steel market functioned and hydraulic ex-cavation technology disrupted the cable-actuated power shovel industry. Ama-zon’s “Kindle” put leading bookstores like Barnes & Noble and Borders on the verge of bankruptcy.

RIDING THE DISRUPTION WAVE

Disruptive

innovation is not

a tactic. It's a

mind-set.

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An entirely different value proposition is what disruptive technologies can offer customers. Radios were replaced by the Sony Walkman, which in turn was re-placed by The Apple I-Pod. The value proposition in this case, was better sound quality, more content to choose from and easier portability. The powerful motorcy-cles of Harley-Davidson and BMW once dominated the streets of America. Later small off-road motorcycles like Yamaha, Honda and Kawasaki took over. The value proposition here was better mileage and efficient fuel consumption. Floppy Drives (magnetic disks) were wiped out by Com-pact Disks, which were replaced in turn, by Pen Drives. Customers felt that com-pact size and greater storage capabilities were indispensable value additions. Digital photography took over the camera indus-try sending established players like East-man Kodak who used silver-halide photo-

graphic films into oblivion. Wired telepho-ny was replaced by mobile phones, Cath-ode Ray Tube(CRT) TVs were replaced by LED TVs, full-service stock brokerages were replaced by online stock brokerages, brick and mortar retailing was replaced by e-tailing, offset printing was replaced by digital printing and classroom education programmes were replaced by distance education programmes. Each had its unique value proposition which was irre-sistibly appealing to the customers. Disruptive technologies can also result in the creation of blue oceans (new market spaces). Instant messaging applications like WhatsApp, WeChat, Line, Viber and Hike created an entirely new market. They replaced the SMS service. Similarly, search engines like Google, Bing and Yahoo have now become one-stop shops for all kinds of information.

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Earlier, people had to run around to gath-er information and even after all the effort they put in, they would end up with piece-meal information. These search engines have brought everything under the same roof. Brook Drumm, the inventor of the 3-D printer, Printrbot has carved a niche market which might prove to be a threat to the existence of toy manufacturing companies like Mattel, Lego and Hasbro. Digital network surveillance video industry is another blue ocean which has been cre-ated. New companies like Axis Communi-cations are giving established players like Bosch and Pelco a run for their money. Due to globalization, many large organiza-tions are also targeting emerging econo-mies. The reasons are twofold: a) expan-sion of market share b) the tremendous growth potential in developing nations. For instance, the healthcare industry is characterized by products and technolo-gies that are highly complex, sophisticat-ed, expensive and inconvenient. Many afflictions, thus, remain untreated. There-fore, there is a large untapped demand that can be captured with the aid of dis-ruptive innovation. General Electric had revolutionized the healthcare industry in India and China with two products includ-ed: a $1,000 handheld electrocardiogram device targeted for rural India and a porta-ble, PC-based ultrasound machine that sells for as little as $15,000 for rural China. This not only opened new avenues of suc-cess for GE in these developing economies but also enabled GE to pre-empt the ex-isting domestic players from disrupting GE’s market share. So disruptive innova-tion can actually enable a dominant mar-ket player to expand its market share and

consolidate the same. From the perspec-tive of upstarts in this sector, frugal inno-vations can actually help challenge the dominant player. In India, frugal innova-tions like low-cost healthcare delivery by hospitals like Aravind Eye Care that pro-vides cataract surgery to around 300,000 patients at a cost of 18 USD per patient to product innovations such as the Jaipur Foot, a low-cost prosthesis are paving the way for healthcare industry disrupting for-eign products/technologies that are un-affordable.

Thus, from all the illustrations above, companies need to build and design their resources and align them on the lines of Clayton’s disruptive thinking. For instance, GE, in a bid to continue its efforts, invest-ed around $3 billion in 2009 to come up with at least 100 new innovations in the healthcare sector. On the other hand, in 2004, the then CEO of Proctor & Gamble entrusted two P&G veterans – John Leikh-im and David Goulait with the task of cre-ating a milieu that can foster disruptive growth. The duo came up with initiatives to shake up the existing foundation of thinking, for instance,

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imparting training courses to senior man-agement to align their thinking on lines of disruptive approach. Additionally, P&G also strengthened its organization support by creating entirely new divisions that are devoted only to the creation of entirely new business opportunities. Consequent-ly, in 2006, P&G introduced Crest Pro-Health, toothpaste that can combat cavi-ties, plaque, tartar, stains, gingivitis, and bad breath; thus combining a number of benefits in one tube. Therefore, compa-nies attempt to emphasize disruptive thinking either in the form of discrete in-vestments or taking initiatives to create a

cultural change in the organization. To conclude, disruptive innovations have number of key benefits like gaining com-petitive advantage, creation of new mar-ket space and sustainable growth. The fast pace of change in today’s world is charac-terized by uncertainty and risk and disrup-tive innovation is, therefore, viewed as a reasonable panacea. They have already made a mark on several industries as illus-trated above and more industries like banking and IT sector are looking to ex-plore the opportunities that disruptive in-novations can create.

TANIA MALLIK

References

http://www.christenseninstitute.org/key-concepts/disruptive-innovation-2/

http://www.thecis.ca/cms3/userfiles/Image/Disruptive%20Innovation.pdf

Tania is a 1st years stu-

dent at SBM, NMIMS.

She loves reading fic-

tions, watching movies

and listening to music

Debroop is a 1st year

student at SBM,NMIMS.

Travelling, exploring plac-

es and reading are few of

his hobbies.

DEBROOP B.

MANTHAN 2015

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25

In writing the sequel of his successful

book (the Innovator’s Dilemma) “The In-

novator’s Solution”, Clayton M. Christen-

sen wrote about Disruptive Innovations as

innovations that created new markets by

discovering new categories of customers.

Innovators do this partly by harnessing

new techniques but also by developing

new business models and exploiting old

technologies in a new manner. Priit

Kasesalu and Jaan Tallinn, forever revolu-

tionized long distance communication

when they created Skype. iTunes software

created by Apple, a consumer electronics

company, gave consumers a freedom to

choose and purchase only the songs they

wanted to listen rather than buy whole

albums (which more often than not con-

tained fillers). Model T, the first automo-

bile manufactured by Ford Motors, gave

the world automobiles to travel faster. All

these innovations and more were disrup-

tive in their time as they paved the way

for consumers to have a better, easier life.

Disruptive innovation is not entirely a new

concept. Joseph Schumpeter, an Austrian-

American economist prophesized the con-

cept through the term “creative destruc-

tion” where innovations were a process of

industrial mutation that incessantly revo-

lutionized the economic structure from

within, incessantly destroying the old one

and incessantly creating a new one.

TECHNOLOGY DRIVEN DISRUPTIVE INNOVATION Udit Sharma and Ashutosh Gupta

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26

Rapid technological reform has been piv-

otal to revolutionary changes in the past

few years. Technology has brought peo-

ple closer (Facebook), made advertising

easier and cheaper (Craigslist and Goog-

le’s AdWords), made finding locations

easier (Google Maps), made selling and

buying a lot easier (Amazon, eBay, Aliba-

ba and others), made access to news and

books cheaper, faster and more environ-

ment friendly (Amazon Kindle, iPad and

other readers and online news agencies).

The past few years, technology has cov-

ered long strides in the realm of educa-

tion, healthcare, social reform, environ-

ment protection, collection and interpre-

tation of information and innovations in

these realms will be discussed in greater

detail in this article.

Disruptive Innovations in the Automo-

bile industry

In a generation from now, your journey to your office may go a bit like this. As you leave your home, an empty car would pick you up. On the way to your office you could make some final touchups to your presentation, manage your calendar or just relax and watch TV or listen to music while you’re having breakfast. Some of the other cars have drivers whereas yours and many such like yours have none. Despite the traffic, cars move smoothly and there are no ac-cidents for the whole journey. As you are

dropped to your office, the car wheels away to serve another client and you walk straight to your office. You order a vehicle again only when you need it. All you’ll need to do is to press a few buttons from your phone. The influence of mobile applications has been tremendous in the automobile in-dustry. Disruptions in this industry have been caused in three major sectors. Firstly, the services and applications de-livered to automobiles via mobile net-works. Entertainment systems, satellite -navigation and traffic information etc have made being stuck in a traffic jam less tedious over time. People can now watch their favorite shows and listen to satellite radio or watch news while they are in their cars. Secondly, services based on data supplied from the car to the user’s smartphones have also picked up. These days, sensors can collect data from various car parts and send ad-vanced warnings to users about car parts getting deteriorating. Finally and most importantly technology is being applied to automobiles that can help them com-municate with other vehicles and enti-ties on the road. Companies have come together to create an infrastructure from roadside signals to traffic sensors. Gen-eral Motors’ CEO Mary Barra is very con-fident of the success of v2x mobile tech-nology to make reads safer in the coming times. V2x is a vehicle-to-vehicle and ve-hicle-to-infrastructure communications software.

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Cars enabled with v2x can be warned by road signs (which are also enabled with v2x) of oncoming cars or road blockades ahead. Another big innovation what will disrupt and build a new industry in terms of auto-mobiles is the advent of driverless cars. Both Google and Apple, tech giants in Cal-

ifornia, have been trying to come up with cars that drive themselves. Trials have been done by Google these days to drive electric cars driven by software called Google Chauffer. On May 2014, Google produced a prototype of a driverless car which did not have a steering or pedals for that matter. Soon, legislations world-wide will open up to the concept of cars driving themselves. These cars will also be known to be safer and faster. Other innovations in the sector include cars running on alternate energies like So-lar energy, Fuel cells (Toyota’s FCV and Honda’s FCX concept cars run on Hydro-gen) other greener energies.

Embedded sensors or The Internet of Things Thanks to the smartphone revolution, in-novators these days know of many ingen-ious ways of using microelectromechani-cal systems (MEMS). These sensors make it easy for scientists to attach sensors to every physical product imaginable. Take for example Kolibree. This device has lots of sensors attached to a toothbrush (of all things!!) and it collects oral data sends it to your smartphone. It records where all the brush has reached and which parts it has ignored. The device also monitors the oral health of the user and sends all the information to the us-er’s mobile phone for a dentist to later examine.

More and more companies are coming together to build smarter appliances that can continuously gather and assimilate

data. AllSeen, an alliance of companies like Microsoft, Haier, Panasonic, Qual-comm and LG (amongst others) is plotting to build devices like fridges, televisions, washing machines etc. Which would be able to communicate with other

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machines (M2M communication) and also save energy (Smart Grid). According to Gartner, a research firm, by 2020 30billion devices will be connected to the Internet of Things. These devices will provide marketers with data that will help them target their cus-tomers with better accuracy. With the help of data available from these devices and a combination of conversion tracking, behavioral tracking, and programmatic marketing a new level of precision will emerge with which marketers would be able to display advertisements only to people with relevant interests. The current challenge with the Internet of Things is for companies to come up with a universal language and format for these devices to communicate with. The fact that companies like AT & T, Cisco, IBM and GE have also joined hands to form Indus-trial Internet Consortium for the same purpose as AllSeen, makes things all the more complicated. The Internet of Us Another trend that has been creating much noise these days is the trend of wearable technology. The trend was start-ed in the 80s with calculator wristwatch-es. Later on, the trend of ubiquitous com-puting continued with Bluetooth head-sets. This technology now has applica-tions in monitoring and real time feed-back for sports enthusiasts. A simple wristband can collect large amounts of data about the athlete’s blood pressure, heart rate and vital signs and report back to his technical team or his mobile phone too. This can help people monitor their

health and tell them how their workout has been going on. But the most promising work in this field has been done by Google with their Google Glass, a pair of smart-glasses which can be used to take pictures and make videos (in HD) and also display in-formation from the internet. Fly, Fly American Pie Big strides have also been taken in the field of civil aviation. At the end of 2013, Amazon, and American online retail giant, revealed that it was testing the delivery of packages with small drones (unmanned aircrafts). The company says that in a few years it will develop the capability of de-livering all its packages via drones around the 10 mile radius of its warehouses. Drone technology has already proved fruitful in hunting down terrorists in the

valleys of Afghanistan. Although the flight of drones for commercial purposes is still down to legislations by regulatory author-ities (like America’s Federal Aviation Au-thority (FAA)) drones sure have a very bright future and they seem most likely to disrupt the aviation industry.

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We can look forward to a future of hav-ing our pizzas delivered by an unmanned aircraft. All hands on deck

Never before has technology brought

people so close together than today. In-

novations like Uber which allow users to

book cabs which come to them via loca-

tion tracking on times they want, are just

huge. Airbnb which started in 2009 has

the potential to put hotels out of busi-

ness. Airbnb connects local hosts in vari-

ous countries with visiting tourists and

takes a small cut from them. So instead

of spending hundreds of dollars per

night for a hotel, people just stay in oth-

er people’s houses (the hosts) for a

much lesser amount. Another such ven-

ture that intends to save millions for sci-

ence labs around the world is called Sci-

ence Exchange, started by Dr. Elizabeth

Lorns a New Zealander the application

lets laboratories around the world share

research equipment which otherwise

would cost millions to procure. Another

social venture which is disrupting the

way people ask for donations to carry

out ventures is called Kickstarter. The

site allows people to inform donors

about ventures they are interested in

creating and asking them for donations

in turn. Inventors and innovators from

various industries ranging from movie

making (Zach Braff) to video gaming

(Born Ready Games) have taken dona-

tions for their products and have shown

brilliant results.

Finally, we come to our favorite disrup-

tive technology. Oculus Rift “Crystal

Cove”. You’d be forgiven for not knowing

what the last sentence just meant. Virtu-

al Reality headsets are going to be the

technology that’ll rule the technology

industry for the coming days. VR head-

sets digital sounds and images to create

a 1080p OLED display for improved clari-

ty and gets rid of blurs experienced by

past users. With this device (and others

in the pipeline) we could witness truly

engaging gaming and entertainment.

Further applications of this technology

can be watching movies, listening to

songs, virtual museum shows, and thea-

ter and so on.

References

The Economist

Vox.com

Forbes.com

Kickstarter.com

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With all the talk of technology driven

disruptive innovation in the field of

entertainment, automobiles, food,

business etc. there is also a pressing

need for such disruptions in the fields

of Healthcare and Education. The pro-

cess has started with Massive Open

Online Courses (MOOCs) like

Coursera.com and edx.com in the field

of education and innovations like

Gene Therapy, the future in these

fields also looks bright.

UDIT SHARMA Udit is a die-hard Liver-

pool fan. He dreams of

working as a consultant

at McKinsey someday

and is interested in inter-

national politics & eco.

Ashutosh is an avid read-

er and a social activist.

He loves taking part in

competitions and is a fi-

nance enthusiaist .

ASHUTOSH G.

The Cricket World Cup 2015 is going on in

Australia and New Zealand now. Lovers of

this game are grappling with feverish

cricket mania to take out time to watch

the game. One-day cricket, a derivative of

Test cricket, was conceptualized by Kerry

Packer, the media magnate from Austral-

ia. It was perceived more as an entertain-

ment. He went further by introducing day

-night cricket with the white ball and col-

ored clothing for the players. Apprehend-

ing such cricket may distract national and

international players, initially there was a

huge uproar and protest by the control-

ling authorities of the test cricket playing

countries. However, one day cricket (in

fact it is now a day-night encounter) very

soon became exceedingly popular in all

cricket playing countries, conspicuously

more popular than Test cricket. The basic

reason for such wide popularity is certain-

ty for a result in a match, and convenient

time for the cricket fans to watch the

game, which was missing in Test cricket.

This is an example of ‘Disruptive Innova-

tion’.

The concept of ‘Disruptive Innovation’

was first coined by Professor Clayton

Christensen. In simple words, in disruptive

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Pragyanshree Jagati

TECHNOLOGY’S ROLE IN

ACCELERATING DISRUPTIVE INNOVATIONS

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innovation, new idea or invention is

attempted to be commercialized with a

new product or service targeting a smaller

segment of customers which gradually en-

gulfs larger segments of the industry. It

must be noted that Disruptive Innovation

is different from Sustaining Innovation

which merely aims at improvement of ex-

isting products or services which we may

say, are outcome of R&D activities. In dis-

ruptive innovation, a new and better

product (expression includes service for

brevity) is introduced for the existing cus-

tomers. Sometimes, the new product

which may not be apparently as good as

the existing product, but may be either

novel, simpler, convenient, or cheaper

with a potential to attract new customers.

In due course of time, such products offer

performance - price point that existing

products cannot match. Consequently

with a smaller target market, it expands

its user base. The success of a company in

gaining benefits from disruptive innova-

tion lies in its ability to apply technologies

in comparison to its competitors.

MANTHAN 2015 32

An effort has been made in this article to

substantiate the role of technology in dis-

ruptive innovations which can bring suc-

cess to corporate players and simultane-

ously failure to those who ignore it.

Types of Disruptive Innovation:

Product / Service Innovation

Process Innovation

Business Model Innovation

Let’s discuss briefly about the above men-

tioned types of disruptive innovation with

illustration from the contemporary corpo-

rate world for better understanding and

clarity.

Product / Service Innovation

In such type of disruptive innovations, the

new product initially targets smaller cus-

tomer base but gradually captures more

and more market because of its unique

feature(s) or price competitiveness which

its competitors fail to match. At times, the

innovator prefers to adopt a strategic

price, which may yield very low or no

margin to start with. However, with in-

crease in market share, the price may be

tuned to yield the desirable margin.

A classic example is the Tata Nano. It is a

case of technological breakthrough that

signifies a paradigm shift in the automo-

bile industry. Nano brings the comfort and

safety of a car within the reach of thou-

sands of families looking for an affordable

personal transportation solution. Alt-

hough, this disruptive innovation got dis-

rupted initially by some stray political inci-

dents, today it is the most affordable and

inexpensive car in the Indian market.

Another example is the ‘Galvanized Grain

Storage Silo’ manufactured by Fowler

Westrup, a Bangalore based company en-

gaged in the manufacture of agro pro-

cessing machines for post-harvest applica-

tions. A few years ago, when the company

decided to manufacture this innovative

product, its existing customers were de-

pending on the concrete warehouses in

which the wastage and pilferage of grain

was very high. There was no readymade

market for the product in India. Custom-

ers were depending on the state run

warehouses. However, galvanized grain

storage silo of Fowler Westrup enabled its

customers to have storage solutions at an

affordable price in comparison to the

higher costs involved in concrete ware-

houses and more importantly handling

and preserving grain in a scientific man-

ner. Now a few state governments have

taken initiatives to establish galvanized

silos instead of traditional concrete ware-

houses.

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Process Innovation

The crude oil prices in the international

market has come down from US$ 115 in

June last year to around US$ 60 now.

Consequently, the price of petrol and

diesel has come down significantly in

the Indian market too. The question

arises how could it be possible? The an-

swer is, that due to a substantial im-

provement in the production of Shale

Petroleum by the US. The availability of

crude petroleum oil from ‘shale’, one

type of solidified clay under the ground

is not a new phenomenon. However,

the drilling and extraction of oil from

such shale is quite expensive in compar-

ison to traditional method of extraction

from available oil wells, as most oil com-

panies were not interested in explora-

tion and extraction of such oil. However,

in recent years, many American based

oil companies due to development of

innovative ‘Fracking’ technology have

been able to reduce the cost of oil pro-

duction as well as increase the produc-

tivity significantly. Due to massive in-

crease in production, the global oil pric-

es have come down, thus benefiting the

world economy.

One more example of process innova-

tion can be cited from Tata Chemicals,

the second largest soda ash manufac-

turer in the world. The manufacture of

soda ash generates wastes that can be

harmful to the environment if they are

not properly treated prior to disposal.

However, these wastes can be used to

source valuable raw material for manu-

facture of cement. Tata Chemical in col-

laboration with Larox Corporation of

Finland developed an innovative pro-

cess to turn such waste to wealth with

recovered material being used in the

manufacture of steel. Similarly, Skype

can also be termed as an outcome of

disruptive innovation by process innova-

tion. The low cost telecommunication

service enables customers to call and

message on the same interface more

conveniently and for a fraction of the

price of traditional telecommunication

services.

MANTHAN 2015 34

Business Model Innovation

This type of innovation means the imple-

mentation of a new process, practice and

structure that is significantly different

from the existing pattern of doing the

business. Establishment of commodities

exchanges to deal with future trading in

commodities has enabled the producers

and customers to assess future price in a

transparent manner and thus helps in risk

mitigation. It also provides for investment

avenues. However, complex commodity

exchange model could be made possible

by innovative business model encompass-

ing storage arrangement, software based

network for transaction monitoring, es-

tablishment of regulatory authority etc.

We can come across a number of exam-

ples of disruptive innovation through nov-

el business model route like GPS based

radio taxi services (Uber, Meru, EasyCab

etc.), e-retailing services (Flipkart, Ama-

zon etc.).

Why Leading Companies Ignore Disrup-

tive Innovation?

As explained by Clayton Christensen,

there are basically four reasons why big

companies fail to encounter disruptive

innovation. These are as follows.

Leading companies unilaterally listen

to the customers who generally are

unable to predict potential impact of

disruptive technologies.

Leading companies devote time to as-

sess the market size and growth of ex-

isting products thus ignoring impact of

new products generated due to dis-

ruptive innovation.

Leading companies usually focus on

investment with good return. Howev-

er, the disruptive technology aims at

development of product with lower

margin to start with.

Leading companies normally focus at

large market. On the other hand, the

disruptive technology target at smaller

market with gradual consolidation.

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MANTHAN 2015 35

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Challenges Ahead: Adopt Disruptive In-

novation or Get Disrupted

Partly because of disruptive innovation,

the average job tenure for the CEO of a

Fortune 500 company has been reduced

drastically from ten years in 2000 to less

than five years today. There is good rea-

son to think that the pace of change will

increase, as computer power increases

and more things are attached to the in-

ternet, expanding its disruptive influence

into new realms.

Each business house whether big or

small must set up a team comprising of

executives who need to think and act

very differently from other line manag-

ers. Their key objective should be only

development of disruptive innovation ca-

pabilities. It is also advisable to have col-

laboration with other organizations hav-

ing a reputation for development of in-

novative technologies, like Tata Chemi-

cals and Larox Corporation

Lastly, the success of doing business is

the ability of identifying and understand-

ing customer needs without being told

by the customer and finally delivering

the solutions that deliver satisfaction to

the customer. To remain at the top, to-

day’s business leaders must become fast-

er, smarter and more adaptable. They

should do what others only talk about.

They can still be successful by borrowing

and adapting somebody else’s ideas.

MANTHAN 2015 36

Reference: Websites of referred companies / products Innovation and Innovativeness – The Tata

Experience published by TMTC Strategies for Growth by Atanu Ghosh

published by Random House India

PRAGYANSHREE J.

Pragyanshree was the Indian

delegate at HPAIR Harvard

Conference. She is a great

orator and a passionate

dancer.

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EDITORIALS TEAM (L to R)- Debroop Banerjee, Ankit Anurag

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