Fusion of Disruptive Technologies
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- Rao, Angelov, and Nov sought to determine whether the combining of two disruptive technologies would be strategic in appealing to new or existing markets by studying the case of Skype.
- Previous cases and research studies handled issues about the capacity of disruptive innovation to capture existing markets and establish new ones. However, there is limited existing literature about the impact of merging two disruptive technologies to increase profitability and market share.
- Skype previously offered services including VoIP (voice over internet protocol) and P2P (peer-to-peer) computing. Individually, VoIP and P2P were considered disruptive technologies, but when Skype chose to merge these two services massively changed the landscape of telecommunications, which consequently made the company profitable and provided Skype with an opportunity to gain competitive advantage.
- VoIP is a disruptive technology because it opened opportunities for businesses to expand. Through VoIP, businesses launched into application development (advanced communication applications). Consequently, k service providers in the US, like AT&T, Verizon, Time Warner Cable and others adopted VoIP and integrated it to their products and services.
- P2P, on the other hand, facilitated speedy transfer of data, along telephony networks. Business did not consider P2P as a disruptive technology then, but it was still valuable because it is flexible and could be used by users to either receive or send data through the network.
- Integration by Skype of both VoIP and P2P led to the creation of a new strategy in business that would create value – fusion strategy. According to Skype, the company’s fusion strategy is a means of taking advantage of the benefits and contributions of two disruptive technologies and using them as leverage to enhance the unique services of the company.
- Skype continued to offer new products and services by expanding from the base – VoIP and P2P – and creating innovative applications that could be tied to other programs and platforms. Skype created value by establishing applications, in which other businesses like Cisco, ICQ could invest and enjoy their advantage.
- Studying the mechanisms of disruptive innovation and the impact of combining disruptive technologies is noteworthy because previous cases, like the case of Skype, show its success in creating value for organizations.
Rao, Angelov, and Nov used the case of Skype in order to determine how the combination of two disruptive technologies could create value in the marketplace. Previous studies already proved that singular disruptive technologies threaten the position of existing businesses because they provide unique and cutting-edge services; moreover, they offer not only something new to consumers, but also allow businesses grow and expand, by exploring other opportunities through disruptive innovation. However, businesses should also look beyond existing practices in disruptive innovation just as Skype did. Skype took advantage of existing opportunities by combining two disruptive technologies that strengthened its position, in the marketplace. The company created a business that appeals to consumers because of the services it provides and because it also offers something for investors. At present Skype can offer free services to consumers because of the large investments that it receives from other companies that rely on its VoIP-P2P system. From a management position, the case of Skype could be used as a starting point in establishing business strategies and opportunities to create value in the organization. Technology and innovation are not limited to businesses in the hi-tech industry, since they could be considered as opportunities for all the variety of businesses to create value for their own organizations. Furthermore, managers should view strategic development and business management in a similar way. Problem-solving, decision-making, and strategic development should be done in such a way that managers view them from a non-traditional perspective and that they see and take advantage of opportunities for development by applying fusion strategies.
In the “Skate to where the money will be” article, Christensen, Raynor, and Verlinden discuss the disruptive technologies model as a means for organizations to predict future trends in the business and measure upcoming competition. Moreover, the disruptive technologies model could also contribute to an organization’s ability to evolve accordingly, by adopting disruptive technologies that would create competitive advantage. The article proves that the claims and arguments by Christensen, Raynor, and Verlinden base upon existing evidences that disruptive technologies create value for organizations. Rao, Angelov, and Nov even expand on the literature by viewing disruptive technologies from the perspective of strategic development, where the combination of these technologies would allow business get ahead of the competition.
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