Incumbency

See below for your task:

https://sites.google.com/braggonomics.com.au/startuplab/getting-to-market/incumbency#h.p_lUIUi_hUuSaG

Incumbency is the 'holding of an office' - and can be related to business in terms of being the business that is the existing leader or dominant firm in an industry.

Being the incumbent has many advantages... but can also be a disadvantage when it comes to innovation and new technology.

For example, Nokia was THE mobile phone company through the late 90s and early 2000s. Having the advantage of incumbency meant it was profitable, popular and led the industry in new developments and ideas.

Until it didn't... RIM's Blackberry and later the Apple iPhone challenged Nokia - and we know what has happened since then.

A useful starting point is the Deloitte "patterns of disruption" report:

https://www2.deloitte.com/etc/insights-lists/interactives/patterns-disruption/index.html#/patterns?_k=dhm1l2

How are incumbent businesses displaced?

In the report Patterns of disruption: Anticipating disruptive strategies in a world of unicorns, black swans and exponentials, Deloitte [a large consulting firm] explored the factors that turn a new technology or new approach into something that disrupts the marketplace and the business models of incumbent firms.  They identified nine distinct patterns of disruption: recognisable configurations of marketplace conditions and new approaches that can pose a disruptive threat to incumbents.

Deloitte: www2.deloitte.com/insights/us/en/focus/disruptive-strategy-patterns-case-studies.html

Disruptive innovation doesn't just happen at random - there are certain patterns to disruption that repeat across industries and times. The strategies combine with market trends and allow businesses to challenge industry incumbents.

Deloitte: https://www2.deloitte.com/insights/us/en/focus/disruptive-strategy-patterns-case-studies.html

Paths to displacement

Deloitte identified five 'paths to displacement' that incumbent firms can be faced with.

Without realising it, new firms and new approaches can challenge their market position and undermine their business models.

Case Study: Kodak & Netflix

In 1975, Kodak invented the world's first digital camera. A little over 30 years later, they declared bankruptcy - their traditional film business made redundant by the growth of digital photography, smartphones and the internet.

These slides and the information below will guide you through the research process.

Disruption: Kodak, Netflix [Template]

The very first digital camera created by Steven Sasson in 1973.

An image from the original digital camera on the prototype digital playback system.

Steven J. Sasson, an electrical engineer, created the first digital camera.

Your job will be trace the development of the photographic industry and see the points of change that allowed Kodak to grow, and then fail...

The box to the right provides a number of articles and information that explain the Kodak story - these are quite detailed. You may prefer to use the articles below, along with your own research, to trace the history of Kodak, the development of digital photography and how this impacted the market.

This article provides a nice discussion of the technology landscape and how it impacted Kodak - including what it could have done to adapt to change:

https://www.ignitionframework.com/story-of-kodak/

Kodak made a prediction in 1981 about the likely impact of digital photography, the necessary conditions for it to become a viable product group, and when this was likely to happen... but did they take action? Read this article:

https://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/#4f4628986f27

Technology, consumer mentality, government regulation, new competitors, economic situation, social and cultural trends and a range of other factors mean that disruption is always possible, even for the strongest business.

Case Study - Kodak [Shorten Value Chain].pdf

Where Kodak didn't adapt, Netflix did...

These articles provide some background to how Netflix not only overthrew the existing dominant players in video entertainment, but adapted their business model to stay at the cutting edge:

A History of Netflix in different forms: