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How Likely Is Your Industry to Be Disrupted? This 2×2 Matrix Will Tell You

hbr.org · 120 words · saved by 1 readers

The topic of industry disruption — “a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses” — is rife with misconceptions. One of the biggest is that it is a mysterious, random, and unpredictable event. Another is that it happens to you in ways that are beyond your control. Those views may have been valid at one time, but they no longer apply. Industry disruption, as Accenture research has found, is reasonably predictable. And with wisdom about its predictability comes opportunity. To help business leaders better understand industry disruption, the authors developed an index that measures an industry’s current level of disruption as well as its susceptibility to future disruption. For the former, they examined the presence and market penetration of disruptor companies; they also considered incumbents’ financial performance. For the latter, we measured incumbents’ operational efficiency, commitment to innovation, and defenses against attack. The authors then used that information to identify four distinct states of disruption: durability, vulnerability, volatility and viability. Their research shows that it is possible for business executives to assess how susceptible their industry is to disruption and why, and to do the same at a more granular level for their company. Armed with that knowledge, they will be better able to define the right strategic response.

Harvard Business Review Logo January 29, 2018 Jorg Greuel/Getty Images The topic of industry disruption — “a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent The topic of industry disruption — “a process whereby a smaller company with fewer resources is able to successfully challenge established incumbent businesses” — is rife with misconceptions. One of the biggest is that it is a mysterious, random, and unpredictable event. Another is that it happens to you in ways that are beyond your control. Those views may have been…

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