The document discusses disruption caused by sharing economy platforms like Uber and Airbnb. It defines disruptive business models and how they disrupt existing industries and stakeholders. Airbnb is used as an example of how it disrupted the hotel industry at the industry, organizational and stakeholder levels. The document also discusses opportunities and challenges faced by disruptors like Uber and Airbnb in relation to drivers, consumers and regulators. Finally, it discusses digital disruption and the key challenges it poses around reframing strategic choices, realigning value chains, and executing strategies to capture value in a changing environment.

1. DISRUPTION & MONOPOLISTIC
PRACTICES

2. CASE QUESTIONS
• How do we define the sharing economy (use examples)
• What is being shared? What is the value that is being created and for
whom?
• What are the opportunities and challenges of the sharing economy?
• What are disruptive business models?
• What do they disrupt?
• Use Airbnb as an example and discuss the ways in which it disrupted
an industry/sector
• Start with industry level and then go to organizational and stakeholder
level.

3. CASE QUESTIONS
• Using the concepts of new power discuss how/where do firms like Uber and
Airbnb find growth opportunities?
• How does stakeholder relationship change with disruptors such as Uber and
Airbnb?
• What are the aspects that change?
• Where are the opportunities/challenges?
• Use the following three stakeholder roles: drivers, consumers, regulators. Come
up with three core concerns that you have with Uber.

4. • John Oliver on Tech monopolies
• https://www.youtube.com/watch?v=jXf04bhcjbg

5. WHAT IS PERFECT COMPETITION?
Perfect competition is an industry in which:
• Many firms sell identical products to many buyers.
• There are no restrictions to entry into the industry.
• Existing firms have no advantages over new ones.
• Sellers and buyers are well informed about prices.
• A competitive seller is a price taker, not a price maker

6. THE MONOPOLY FIRM
A firm is considered a monopoly if ...
• it is the sole seller of its product.
• its product does not have close substitutes.
• The firm has market power, the firm is a ‘price maker’ and
not a ‘price taker’
• If there are significant barriers to entry and exit

7. BARRIERS TO ENTRY
• Ownership of essential raw materials, e.g. De
Beers(diamonds) or Alcoa (bauxite).
• Legal barriers: patents, copyrights, registered designs and
licences etc
• Natural monopoly, very high fixed costs very low marginal
costs

8. WHY DO MONOPOLIES ARISE?
• The fundamental cause of monopoly is barriers to entry.
• Barrier to entry have three main sources:
1. A key resource is owned by a single firm:
• Although exclusive ownership of a of a key resource is a potential
cause of monopoly, in practice monopolies rarely arise from this
reason.
2. Government created monopolies: the government gives a single
firm the exclusive right to produce some good or service
• In many cases, monopolies arise because the government has given
one person or firm the exclusive right to sell some good or service.

9. WHY DO MONOPOLIES ARISE?
3. Natural monopolies
These arise due to natural market forces. It often occurs in industries where capital costs
are predominant, creating large scale economies relative to the size of the market.

10. “My original theory about disruption was a theory about
competitive response. An entrepreneur needed to predict
whether the incumbent leaders would kill them, ignore
them or flee from them. The theory of disruption is a
theory of competitive response. But alone it doesn’t help
you predict the success of a new product. If you develop a
product and it doesn’t help the customer get a job done,
then there is no causal mechanism that makes the
customer buy your product. You have to put the two
together, disruption and what is the job the customer is
trying to do.”
~
Clayton M. Christensen

12. DISRUPTION CAUSED BY THE INTERNET

13. DIGITAL DISRUPTION – KEY CHALLENGES
Reframe Strategic Choices
• Complexity and dynamic change are forcing companies to
disrupt themselves
• Few companies are confident that they can make the right
decisions against a backdrop of continuous change
• Striking the balance between global and local remains a key
challenge
Source: Ernst & Young (2014) Disrupt or be disrupted

14. DIGITAL DISRUPTION – KEY CHALLENGES
Realign the value chain
• Shortages of key commodities will require companies to rethink
their sourcing strategies
• Social media is shifting control of brands to consumers, but
companies have not yet adapted to this transition
• A multichannel world poses unprecedented supply chain complexity
Source: Ernst & Young (2014) Disrupt or be disrupted

15. DIGITAL DISRUPTION – KEY CHALLENGES
Execute to capture value
• Aligning execution with strategy remains a major challenge
• Maintaining margins demands a continuous focus cost and
efficiency
• Talent remains the key barrier to effective execution
Source: Ernst & Young (2014) Disrupt or be disrupted

16. Tesla has revolutionized all aspects of the car
industry – Product, Process, Business model
and Experience of ownership