disruption?
Is an artificial intelligence disruption on the horizon for your industry? It's a question keeping many executives up at night. AI companies are rolling out new tech at such a fast clip it can be hard to keep up. As we noted in our recent look at how FinTech is being transformed by these developments, innovation can impact an industry from multiple directions.
3 types of innovation
With this kind of change on the horizon, business leaders can't afford to turn a blind eye to where their field is going. Fortunately, it's possible to get a grasp on what this will mean to you. By applying Clayton Christensen's 3 types of innovation framework, it's possible to gauge how AI might reshape your competitive landscape. Let's explore what this means by looking at each type of innovation in turn:
Sustaining Innovation: AI can significantly enhance existing products or services, offering sustaining innovation (i.e. performance improvements) for market leaders. If your company is already at the forefront of its industry, integrating AI could be the key to solidifying that lead. This would likely translate into using AI to deliver superior performance to your most demanding customers.
Low-End Disruption: For industries with high cost structures, AI presents a ripe opportunity for low-end disruption (i.e. offering services at discounted prices to the low-end of the market). New players could leverage AI to offer "good enough" solutions at a fraction of the cost of incumbents, who face a different cost structure and typically have no choice but to retreat up market to higher margin use cases.
New-Market Disruption: AI has the potential to create entirely new markets by making goods and services available to customers who historically lacked the money or skill to buy from incumbents. Look for signs where AI is making products simpler and more accessible, thereby tapping into a previously untapped customer base.
identify your industry
As a business owner or executive, it's crucial to identify where your industry sits within this framework. Are you poised to lead with AI, or will you need to defend against it?