What Is Driving Disruption In The Business?

What Is Driving Disruption In The Business?

Technological disruption is transforming businesses across all industrial sectors. Embracing the right technological advances and targeting customer satisfaction will enable the business to leapfrog over other competitors. The rising wave of disruptions is challenging several companies, and also cushioning the budding of new-age tech firms. There is more than one factor that brings forth disruptions in business. The article has pointed out some primary domains affected by disruptions; the trend will persist in the near future as well.

Yahoo was once a leader in search engine space before it was overshadowed by Google and Microsoft Bing. With the aggressive expansion of digitization and internet penetration once a leader went to the third position. The then CEO of Yahoo, Marissa Mayer went into a shopping spree trying desperately to regain the lost position. She started acquiring technology and startups, ended up with 53 tech startups and spent up to $2.8 billion. Eventually, Yahoo had to shut down 33 startups, had to discontinue the products of 11 startups, and left the others in a complete mess. Yahoo integrated two companies, Tumblr and BrightRoll, and in 2017 it was acquired by Verizon for a meagre $4.8 billion, much lesser than the initial value of $100 billion. The search engine failed miserably in the digital era, what can be the reason?

Technological disruption is not the primary reason here, as opined by several business experts. Several large organizations like Yahoo often miss or choose to ignore the most obvious reason behind the disruption in business. Technology is not the sole driver of disruption, but changing consumer demand is. Acquiring technology startups and firms, incorporating technological advances is not the solution. The organizations who focus on changing consumer demands and the consumers’ convenience can survive the changing market dynamics effectively. Many organizations believe that technology is the only cause of disruption, which is certainly not the scenario.

The booming of the startup ecosystem is another cause of concern for the traditional incumbents. Besides, technological innovations, the new age young startups and gig economies are geared up to compete with the incumbents following the classical business models. As reported by Harvard Business Review (HBR), “Disruptive startups enter markets not by stealing customers from incumbents, but by stealing a select few customer activities. And the activities disruptors choose to take away from incumbents are precisely the ones that customers are not satisfied with. Birchbox stole sampling of beauty products from Sephora. Trov stole turning insurance on and off from State Farm. PillPack stole fulfilling prescriptions from CVS.”

Customers at the Centre of Disruption

The product-based or service based companies are working for serving only one entity that is the customers. All the technological advances and innovations are targeted for the customer’s convenience and demands. Many times it is observed that the young startups and traditional incumbents are applying the same technologies, still, the younger ones are incurring heavy profits, name and fame. How is this happening? The successful business expansion is possible when the consumers are acquiring benefit out of the product or the service. Unhappy customers become detrimental to business growth. It is their decision whether to choose and use the product or not.

The author of the book Unlocking the Customer Value Chain, by Thales S. Teixeira mentions the coupling strategy. This strategy refers to the introduction of the new products which are in alliance with the original ones. This enables the consumers to fulfil their needs in a more cost-efficient way, in comparison to using two products of different companies. As mentioned by the author of the above-mentioned book, “My key finding in the book, after looking at many industries, is it’s the customer who is disrupting these businesses. The changing needs and wants and behaviours of customers are actually the root cause of this huge shift away from large retailers into other startups and other online retailers.”

Value Addition with Connected Products

Technological advances and innovations hold the capacity to transform and re-imagine the operations across the value chain. Several organizations, both newcomers and traditional ones are harnessing the power of technology to re-design and reform their products and services. They are launching innovative offerings to bounce over fellow competitors and gain market share. The decline of costs of sensors, connectivity and computing boost the disruption in this arena. For example, a commercial fleet could control fuel costs improve the efficiency of vehicle performance, by calibrating vehicles over the air to match the operating conditions. The semi-autonomous tractors of distribution centres can increase the speed of trailer movements and reduce the chance of accidents and damages.

As opined by McKinsey, the companies take certain crucial steps for ensuring product connectivity. They are: “Ensure that use cases drive platform requirements both while developing minimum viable products (MVPs) and over the long term. For example, use cases that require the real-time processing of large data sets, such as autonomous driving, demand significant edge computing capacity in the vehicle as well as in the cloud, while use cases based on aggregating data from a multitude of devices, such as consumption trends from connected appliances,
can be handled exclusively in the cloud, at a much lower cost.

Take an end-to-end approach to architecture. A siloed approach, in which device, cloud, and app data are all handled independently, is likely to cause duplication, with each layer over-developing its own features rather than delivering functionality across the whole customer experience. By contrast, focusing on adding incremental end-to-end capability forces companies to address dependencies between data models, communication protocols, and so on, at an early stage in development programs, thereby greatly reducing risk.”

Disruption in Diverse Business Domains

Technological disruptions are predominant in recent years and it will be persistent in the foreseeable future. Several industrial sectors are on the cusp of disruptions. For instance, healthcare, financial and legal services, data security, education, insurance, customer services, automotive industry, security services etc.

  • Healthcare Sector: The new age collection of healthcare data, analysis and understanding of medical reports and tests results are getting reformed with the incorporation technological tools like Machine Learning, Internet of Things (IoT), Artificial Intelligence (AI) etc. The health-tech sector has shifted towards easy and early detection processes by leveraging data about medical conditions via wearables. The internal bodily functions like heart rate, pulse rate, blood pressure, and blood sugar level can now be easily detected with the help of technology. This, in turn, speeds up the accurate medical treatment procedures.
  • Financial and legal services: These sectors are on the cusp of technological disruptions. Advanced intelligent chatbots are used to solve the queries of the users. Blockchain technology is used for moving money through the system and data organization; machine learning is used for detecting fraud or any anomaly in the system and contract analysis; relevant information and insights are provided to the stakeholders via cognitive search techniques.
  • Data security: Technological inclusions in the system have often led to the breach in data security. Data protection and privacy have been the major challenge faced by organizations during technological disruptions. The organizations are acquiring data-centric security solutions for preventing data theft and breach of privacy.
  • Education sector: AI, Virtual Reality (VR) and Augmented Reality (AR) have given a new shape to the education sector. The students are able to explore the subjects that they are interested in. The penetration of technological tools has driven the growth of Edtech sector. The online education platforms give easy access to the study materials, online class lectures and tutorials, targeting the convenience of the students. Developing smart classrooms and uplifting education standards as a whole has been the aim of the Edtech sector.
  • Insurance: Insuretech has been expanding aggressively in recent years, showing great promises in the long run. Improving insurance penetration and giving apt insurance solutions digitally are the goals of the sector. The online platforms help the users to compare and contrast between various policies and premiums and then choose one as per convenience. Venturing in partnerships with Fintech, insurers can operate at lower costs and improve customer experience with user-centric mobile products. 
  • Customer services: The customer service sector is ready to embrace the technological disruptions allowing the users to interact visually and contextually, leveraging both digital and traditional modes of communication. The sector is using technology to respond aptly to the smartphone and on-demand behaviour change of the evolving consumers.
  • Automotive Sector: This sector is learning to apply the latest technological tools and streamline processes. Even the traditional manufacturing companies are either acquiring tech firms or including tools in their manufacturing processes and operations.
  • Security Services: With growing technological disruption, security becomes one of the major concerns. With the help of security analytics and machine learning, the sector is gearing up to detect any breach, thus making the processes efficient and cost-effective.


All the business domains are undergoing disruption. Besides technology being the obvious reason, the changing consumer demands need a special mention. All businesses thrive to attract customer attention. As rightly said, “the customer is the king”, he can decide where to invest and where not. Making consumers happy and incorporating the right technology can unlock the growth potential of businesses across the globe.

Leave a Comment

Your email address will not be published. Required fields are marked *