This document discusses how organizations can leverage capabilities in disruptive environments. It defines key terms like leverage, disruption, and capabilities. It describes how organizational capabilities focus on meeting customer needs and creating competitive advantages. Traditional sources of advantage are lower costs, product differentiation, and innovative technology. Capabilities provide customer value through responsiveness, relationships, and service quality. Disruptions can be technological or marketing innovations that create new markets and overtake existing ones. For organizations, disruptions can present threats or opportunities depending on factors like adaptability and innovation. Examples of disruptive strategies include low-cost airlines and new financial products. The document provides tips for leveraging disruption, such as learning from the market and identifying new opportunities.
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Leveraging capabilities in a disruptive environment
2. Some key words used in this presentation
Leverage: Gaining benefit
Disruption: Separation/Division into parts (Ref:
Dictionary.com)
Capabilities: A firm’s ability to gain competitive
advantage
Competencies: Specific skills and experience in
the market where the firm is operating. Eg:
Delivery of Pizzas by Dominoes
3. Organizational Capability
focuses on internal processes and systems for
meeting customer needs
creates organization-specific competencies that
provide competitive advantage since they are
unique
ensures that employee skills and efforts are
directed toward achieving organizational goals
and strategies
4. Traditional Sources of Competitive
Advantage
Economic / financial capability: able to produce
good or service at lower cost than competitors
Strategic / marketing capability: products or
goods that differentiate a firm from its
competitors, typically by “adding-value” or
“product-portfolio mix.”
Technological capability: products or services
that customers receive are innovative, high-
quality, state-of-the art, typically in how they are
built or delivered.
5. Organizational Capability and value for customers
1) Responsiveness: the ability of the business
to understand and meet customer needs more
quickly than competitors
2) Relationships: the ability of a business to
develop enduring relationship between customer
and employee
3) Service quality: the ability of business to
design, develop and deliver service that meets or
exceeds customer expectations.
6. Disruption in the strategic process
An innovation/practice that creates a new market
by applying a different strategy, which ultimately
overtakes an existing market.
It can be technological as well as marketing
linked
7. What Disruptions do
Disruptions in the business environment cause
economic shifts that destabilize industries,
companies, and even countries
(Harvard Business Review)
9. Disruption as a threat
For firms who don’t change their strategies to
cope up with disruption, it is a threat
10. Disruption as an Opportunity/Leverage
For firms which are;
Adaptable
Flexible
Risk taking
Innovation oriented
Employee friendly
Resourceful
Technology Friendly
11. Examples of disruptive strategies
Air Deccan started a Airfare of Rs 1 + Tax in the
year 2005, creating disruption in the civil aviation
sector
Citibank was the first bank in India to offer credit
cards in early eighties
Maruti 800 changed the shape of the market.
Premier Padmini was out of market within no
time.
12. Disruptive Changes
Technology
Business Strategy
Industry Dynamics
Globalisation
Outsourcing
Political and Regulatory Environment
13. How to leverage from a disruptive environment
Learning from the market
Expanding horizons
Identifying the probable disruptions
Selecting new ideas
Turning new ideas into opportunities
Reducing risk by entering into related industry
Technological as well as marketing
collaborations