Disruptive Innovation AB

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Clayton Christensen essentials on what to include in developing a business plan or a business model. Also elements of disruptive innovation and some charts on the process of constructing theory from …

Clayton Christensen essentials on what to include in developing a business plan or a business model. Also elements of disruptive innovation and some charts on the process of constructing theory from statements of association, to correlation to causality.

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  • 1. Disruptive Innovation Clayton M. Christensen, Jerome H.Grossman, M. D., and Jason Hwang, M.D.The Innovator’s Prescription: A Disruptive Solution for Health Care (New York, NY: McGraw-Hill, 2009).
  • 2. Elements of a Business Model Profit Formula: Processes: Assets and fixed cost Ways of working together to structure, address recurrent tasks in a and the margins and velocity consistent way: required to cover planning, budgeting, training, them development, manufacturing 4 3 The Value Proposition: Resources: A product or service that helps People, technology, products, customers do more effectively, facilities, equipment, brands, conveniently, and cash that are required and affordably a job to deliver the value proposition they’ve been trying to do to the targeted customers 1 2 Clayton M. Christensen, Jerome H. Grossman, M. D., and Jason Hwang, M.D. The Innovator’s Prescription: A Disruptive Solution for Health Care (New York, NY: McGraw-Hill, 2009).9/7/2012 jgillis767@aol.com 2
  • 3. A Typology of Business ModelsBusiness PrescriptionModels Business Models(Øystein Fjeldstad) (C. M. Christensen) Classically intuitive, trial and error process ofValue Shops Solution Shops problem solving. Uses experts who draw on intuition, experience and analytical skills to diagnose and solve unstructured problems. VAPs They take in incomplete or broken things andValue Chains Value-Adding transform them into more complete outputs of Process higher value. Value embedded in equipment and Businesses processes rather than the intuition of experts. The networked users themselves are a key part ofValue Networks Facilitated the product. Ongoing activity and often behavior Networks dependent, like collectives of chronic diseases, or Apple Computer users, or casinos.9/7/2012 jgillis767@aol.com 3
  • 4. A Typology of Business ModelsBusiness PrescriptionModels Business Models(Øystein Fjeldstad) (C. M. Christensen)Value Shops Solution Shops Decentralized expertise and decentralized resources. Expensive per unit. VAPsValue Chains Value-Adding Commoditized expertise and centralized Process resources. Less expensive per unit. BusinessesValue Networks Facilitated Commoditized expertise and decentralized Networks resources. A lot less expensive per unit.9/7/2012 jgillis767@aol.com 4
  • 5. Type of Business Model Solution Shop Value-Adding Process Network Facilitator Business Model Type Toyota Disruptions within a Boston Consulting Group Wal-Mart, Target Electronic clearing networks Bain Capital Canon (ECNs) Bloomberg Cisco Cellular telephony Community colleges Skype (VOIP) Fidelity Ford Disruptions that changed the Business Model Type Kodak TurboTax Geek Squad Amazon eBay Second Life Linux Google9/7/2012 jgillis767@aol.com 5
  • 6. Elements of Disruptive Innovation Disruption Key Enabler Goal Sophisticated technology Routinizes the solutions to1. Technology that simplifies problems that previously needed intuitive experimentation. Lower-cost innovative Profitably delivers the simplified2. Business business models solutions to customers affordably and conveniently. Systemic reform with mutually3. Value Economically coherent reinforcing economic models. A value network “system of interlinked chains” rather than piecemeal insertions. Lubricate interactions. Make it4. Government Regulations and standards easier rather than more difficult. that facilitate change Foster, stabilize, make it more affordable. Clayton M. Christensen, Jerome H. Grossman, M. D., and Jason Hwang, M.D. The Innovator’s Prescription: A Disruptive Solution for Health Care (New York, NY: McGraw-Hill, 2009).9/7/2012 jgillis767@aol.com 6
  • 7. The Cycles of Theory Building in Management Research Paul R. Carlile School of Management Copyright © Boston University Working papers are in draft form. Boston, MA 02215 This working paper is distributed carlile@bu.edu for purposes of comment and discussion only. Clayton M. Christensen Harvard Business School Boston, MA 02163 cchristensen@hbs.edu October 27, 2004 Version 5.09/7/2012 jgillis767@aol.com 7
  • 8. The Process of Building Theory Statements of association (models) Predict Confirm Categorization based upon attributes of phenomena (frameworks & typologies) Anomaly Observe, describe & measure the phenomena (constructs) The Cycles of Theory Building in Management Research9/7/2012 jgillis767@aol.com 8
  • 9. The Process of Building Theory Statement of causality Preliminary statements Predict Categorization of the Confirm circumstances in which we of correlation might find ourselvesPredict Categorization by the Confirm Anomaly attributes of the Observe, describe & phenomena measure the phenomena Anomaly Observe, describe & measure the phenomena Normative Theory Descriptive Theory The Cycles of Theory Building in Management Research 9/7/2012 jgillis767@aol.com 9
  • 10. Veritas9/7/2012 jgillis767@aol.com 10