Disruptive Technologies: An Analysis of Disruptive Innovations

Disruptive StrategiesAn analysis of successful innovations
By ErtiDhamo
Management of Information Systems
Fox School of Business, Temple University
Philadelphia PA

Abstract
In this presentation you will see:
How Amazon.com was founded
The initial strategies towards success
The business rationale behind Amazon Web Services
Also:
Nintendo’s struggle with competition in the entertainment industry
Nintendo’s product development strategy
The positions of Nintendo’s products.

The “Walk”
Lets begin to analyze the strategic steps of each company

Foundation of Amazon.com
Originally founded by Jeffrey Bezos in 1995
Company Aim: “Become Earth’s biggest bookstore”
Innovative website
Personalization
“One Click
Customer Reviews

Financial Figures

Current Value
As of 2009, Deutsche Bank estimated Amazon.com to be worth:
$225 Billion

Business Strategy of Amazon
“Grow fast, even at expense of profitability”
Invested heavily in Technology
Web site Innovations, E-Commerce infrastructure
Entrepreneurial Culture
Small teams focusing on long term goals
Notable Expansions
Clothing, digital music, and of course The Kindle

Towards the “Cloud”
Andy Jassy
General idea: “More access to core functions, more revenue for Amazon”
The Associates
Large group of advertisers of Amazon products
Main function: Refer sales to Amazon in exchange for commissions
The Developers
Require more access to Amazon’s core features
Vision: The Internet as an Operating System

Establishment of Major Services

Nintendo: An overview
Originally founded in 1889 in Kyoto, Japan.
1991: First gaming platform – Super NES
1996: Launched Nintendo 64
2004: Launched Nintendo DS
November 2006: Launched the highly successful Nintendo Wii

Incentives toward change

Simple Strategies
Reach out to non-gamers in order to create a bigger market
No boundaries
Age, gender, or gaming experience
Easier games to play
Easy-to-play controller
Real life game scenarios rather than fantasies

Introduction of the Wii

Disruptive Strategies of Nintendo
Development of game titles was done in-house
No third party delays
Development of software in conjunction with hardware requirements and vice versa
“Exergaming” – Physical Exercise along with gaming
Recommended by doctors to patients
WiiWare – Established network where freelance developers can sell their own game titles

Disruptive Innovation: Getting The Point
What consists a disruptive innovation?
Production/Usage costs
Opening of new markets
Ease of manufacturing
Types of disruptive innovations
Low End disruptions
Low cost innovations that benefits low budget customers
New Market disruptions
Introduction of a product that is not used by a large market share

Amazon and Nintendo: Back-to-Back comparison of disruption strategies
Amazon AWS
Low End Disruption
Transition of web hosting into virtual “cloud”
Low cost charges
Instant support when needed
Elasticity of host systems to fit consumer needs
Nintendo Wii
New Market Disruption
Increasing market share
Low cost of manufacturing
Simplicity of use
Incentives for little start-up developers