Disruptive Technologies can kill your business in record time

„Company owners never realize that they might be bancrupt in less than one year if they do not react immediately“

Heinrich Hess, Managing Director of Innovation Consultancy HGH Innovation GmbH, München

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What does „disruptive innovation“ mean?

Disruptive innovations  arise from the lower end of the market and from new markets. For the established companies they appear completely unexpected!  And disruptive innovations have another very unpleasant attribute which is that they appear kind of „carmouflaged“ and are barely detectable. In the beginning they are so small that they are not even visible and even when they become visible they seem to address such a very small market so that they seem to be completely uninteristing.

It can happen very fast

After a certain time, however, things are often changing dramatically. With a phenomenal growthrate existing markets, products or services can be completely or partly eliminated.

At first weaker but suddenly very strong

At the beginning of their development disruptive technologies are often still inferior to established products. As an example USB flash storage devices are still inferior to HDD with regard to capacity, reliability and price. This is why for the time being PCs still contain HDD rather than flash storage. But this can change rapidly.

Analog cameras and companies like Kodak were amoung the first victims

In case of analog cameras the short fight has been decided in favour to digital camaras many years ago.  Also in this case digital cameras could at first not yet convince with regard to resolution and picture quality. Resolution of less than 1 Megapixel seemed to be a very big disadvantage in comparison to the classical analog cameras. But very soon the huge advantages of this technology became obvious: results could be checked immediately,  snapshorts could be taken without any limitation and free of charge and pictures could be stored digitally or printed without any further delay. In the meanwhile the picture quality has been improved so much that digital cameras have replaced analog cameras nearly 100%.

„Most companies are not aware that they can go down at any time!“ Heinrich Hess von HGH Innovation GmbH-München

„We are surprised how naive leaders of big enterprises are when judging the risks of their company“, says innovation expert Heinrich Hess of HGH Innovation GmbH in Munich.  But can disruptive innovation be prevented? Hess‘ answer is clear: „No, unfortunately not! In case of a combination of  circumstances disruptive innovation with all their negative implications cannot be prevented!“

More security through innovation consulting and analysis

Some more examples of recent disruptive innovations:

• Weight watchers loosing market share to smart phone apps offering cheaper or free of charge solutions
• Car industry loosing sales by Carsharing
• Piano teacher over skype
• Navigation devices replaced by apps
• Newspapers replaced by online services
• Heartfrequency devices replaced by apps
• Radio replaced by webradio
• House- and energy controll by apps
• Games CD replaced by online games
• Language courses replaced by online apps
• Travel guides replaced by online apps
• Cooking books replaced by online apps
• Books replaced by e-books
• Bank employee replaced by online banking
• Realestate agents replaced by online apps
• Construction of prototypes and more by 3D Printers
• Calculator replaced by smartphones
• ….. and millions more…..

What can be done against disruptive innovations?

The first step is to become aware of the actual or potential disruptive innovations in their market. The consultants from HGH Innovation GmbH are constantly scanning the markets and can give important hints for the newest developments in specific industries. In close cooperation with their clients they analyse the situation and check their specific danger potential. The side effect is that through this process new developments can be initiated which improve the competitivenes and the chances for survival in the forseeable future.

In some cases companies could be saved by investing in exactly those  technologies which were threatening their market position.

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Tags:disruptive, Disruptive Innovation, Disruptive Technologie, HGH Unternehmensberatung, Internet of things, IoT, threat