Disruptive technologies in airline industry

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Disruptive technologies in airline industry

Christensen and introduced in his article Disruptive Technologies: Catching the Wave, [9] which he cowrote with Joseph Bower. The article is aimed at management executives who make the funding or purchasing decisions in companies, rather than the research community.

Disruptive technologies in airline industry

He describes the term further in his book The Innovator's Dilemma. In his sequel with Michael E. Raynor, The Innovator's Solution, [12] Christensen replaced the term disruptive technology with disruptive innovation because he recognized that few technologies are intrinsically disruptive or sustaining in character; rather, it is the business model that the technology enables that creates the disruptive impact.

However, Christensen's evolution from a technological focus to a business-modelling focus is central to understanding the evolution of business at the market or industry level.

Christensen and Mark W. Johnson, who cofounded the management consulting firm Innosightdescribed the dynamics of "business model innovation" in the Harvard Business Review article "Reinventing Your Business Model". In the late s, the automotive sector began to embrace a perspective of "constructive disruptive technology" by working with the consultant David E.

O'Ryan, whereby the use of current off-the-shelf technology was integrated with newer innovation to create what he called "an unfair advantage". The process or technology change as a whole had to be "constructive" in improving the current method of manufacturing, yet disruptively impact the whole of the business case model, resulting in a significant reduction of waste, energy, materials, labor, or legacy costs to the user.

In keeping with the insight that what matters economically is the business model, not the technological sophistication itself, Christensen's theory explains why many disruptive innovations are not "advanced technologies", which a default hypothesis would lead one to expect.

Rather, they are often novel combinations of existing off-the-shelf components, applied cleverly to a small, fledgling value network. Online news site TechRepublic suggests to end using the term, and similar related terms, being that it is overused jargon as of Christensen called the "technology mudslide hypothesis".

This is the simplistic idea that an established firm fails because it doesn't "keep up technologically" with other firms. In this hypothesis, firms are like climbers scrambling upward on crumbling footing, where it takes constant upward-climbing effort just to stay still, and any break from the effort such as complacency born of profitability causes a rapid downhill slide.

Christensen and colleagues have shown that this simplistic hypothesis is wrong; it doesn't model reality. What they have shown is that good firms are usually aware of the innovations, but their business environment does not allow them to pursue them when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from that of sustaining innovations which are needed to compete against current competition.

In Christensen's terms, a firm's existing value networks place insufficient value on the disruptive innovation to allow its pursuit by that firm. Meanwhile, start-up firms inhabit different value networks, at least until the day that their disruptive innovation is able to invade the older value network.

At that time, the established firm in that network can at best only fend off the market share attack with a me-too entry, for which survival not thriving is the only reward.

Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there.

They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream. These companies tend to ignore the markets most susceptible to disruptive innovations, because the markets have very tight profit margins and are too small to provide a good growth rate to an established sizable firm.

While Christensen argued that disruptive innovations can hurt successful, well-managed companies, O'Ryan countered that "constructive" integration of existing, new, and forward-thinking innovation could improve the economic benefits of these same well-managed companies, once decision-making management understood the systemic benefits as a whole.

How low-end disruption occurs over time. Therefore, at some point the performance of the product overshoots the needs of certain customer segments.The potential of these new technologies is enormous.

Embracing the Disruptive Power of Chatbots | Accenture

Accenture research reveals that by , AI will double economic growth rates in 12 developed countries and boost labor productivity by up to 40 percent More and more companies are harnessing the power of these new technologies today. Jul 10,  · All seems well in the airline industry.

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Understanding disruptive innovation in the airline industry The attributes discussed above will be used to explain disruptive innovations in the airline industry, predominantly using the case of Southwest Airlines, as it is renowned as the disruptive innovator in the airline industry.

Airline Strategist Reflects on Disruptive Innovations - Accenture