Innovation Management - Disruptive Innovation

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Assignment Question 1:

The articles by Bower & Christensen (1995) and Markides (2006) discuss several types of innovation: disruptive technologies, radical innovations and business model innovations.

a) Please describe in your own words (but based on the articles) what the following concepts mean: (i) business model innovation, (ii) radical innovation, and (iii) disruptive technologies. b) Please explain how according to Markides (2006) business model innovation differs from disruptive technologies? c) Please consider the following statements:

- Nintendo’s Wii is a disruptive technology
- Nintendo’s Wii is a radical innovation
- Nintendo’s Wii is a business model innovation For each of these statements state whether it is true or false. Use examples from the case to support and explain your answer.

Assignment Question 2:

In their article, Bower and Christensen (1995) make some statements regarding which organizations are more likely to come up with disruptive technologies.

a) Bower and Christensen (1995) state that strong customer focus inhibits creating disruptive technologies. Do you agree with this statement? Explain why this statement is correct and/or wrong. How does this statement apply to the Nintendo case? Please support your answers with examples. b) Bower and Christensen (1995) state that large companies are less likely to create disruptive technologies. Do you agree with this statement? Explain why this statement is correct and/or wrong. How does this statement apply to the Nintendo case? Please support your answers with examples.

Assignment Question 3:

Innovations can provide competitive advantages. Therefore, it is important to constantly innovate. However, it is also essential to be prepared for the disruptions created by the competitors and strategically respond to them. Based on Bower & Christensen (1995) and Markides (2006), please answer the following questions:

a) Explain why established organizations in the market may have difficulties noticing disruptive technologies. Also explain why established organizations in the market may have difficulties noticing business models innovations. Use arguments from Bower & Christensen (1995) and/or Markides (2006) to support your answers. b) When faced with disruptive technologies/business models, what are the available strategic responses for established organizations in the market according to Bower & Christensen (1995) and/or Markides (2006)? c) Imagine that you were managing Sony and were facing the introduction of the Nintendo Wii. Please select the most appropriate strategic response for Sony from question b) and explain why this strategic response would be the best in this case.

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a) (i) Business model innovations are the conception of a new business model in an established market, according to Markides (2006). This business model has to be different at the core from the business models already in place, and has to address a larger market. (ii) Radical innovations are the conception and introduction of genuinely new products that did not exist beforehand (such as personal computers). (iii) Disruptive technologies are part of a broader category encompassing both business model innovations and radical innovations. While there is no commonly accepted definition, disruptive technologies can be seen as new technologies disrupting the actual leaders and commonly accepted standards in an industry or market and replacing them with new entrants.

b) According to Markides (2006), business model innovation differs from disruptive technologies from different aspects. Disruptive technologies are a process eventually growing to dominate the market (Christensen & Raynor, 2003); and they tend to be associated to the remplacement of incumbents by new entrants (Danneels, 2004). On the other hand, business-model...
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