Leveraging capabilities in a disruptive environment
Leveraging Capabilities in a disruptive environment Dr. Sandeep Kulshrestha
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
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
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.
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.
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
What Disruptions do Disruptions in the business environment cause economic shifts that destabilize industries, companies, and even countries (Harvard Business Review)
Disruption as a threat For firms who don’t change their strategies to cope up with disruption, it is a threat
Disruption as an Opportunity/LeverageFor firms which are; Adaptable Flexible Risk taking Innovation oriented Employee friendly Resourceful Technology Friendly
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.
Disruptive Changes Technology Business Strategy Industry Dynamics Globalisation Outsourcing Political and Regulatory Environment
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