Creative Destruction
1. MBA 610 Minor Project 1 (17% weight in course grade)
Assignment—1,800 words (2,000 max., not including list of references). Research one of the examples of creative destruction below, applying the concepts from ch 8-10.
• A leader misses an industry shift and is displaced by an innovator who dominates the changing industry.
o Blackberry phone displaced by Apple
o Blockbuster displaced by Netflix.
• An industry leader misses an industry shift and loses out to many smaller, more nimble competitors
o Kodak dominated film photography but missed out on digital photography
o IBM dominated all aspects of computers but missed out on personal computers, mini-disc drives, etc.
• Through outperformance & scale economies a leader emerges, either absorbing or defeating potential competitors.
o Ford Motor Company outperforms hundreds of small rivals to dominate car industry in early 1900s
o Banking, media, and health care industries consolidate, taking advantage of economies of scale
• Disintermediation through technology–supplier connects to end-user via technology
o Amazon displaces brick and mortar retailers by selling online and shipping to homes.
o Expedia, Travelocity, Priceline, TripAdvisor, etc. replace travel agents with do-it-yourself travel planning
o Airbnb disrupts lodging industry & Uber disrupts taxi industry with technology that enables “sharing economy”
o Facebook & google disrupt newspapers and other media that depend on advertising
Choose one of the examples above. Explain the social, economic, and technological environment during the disruption. What distinguishes between the winners and the losers from the disruption? Be specific as to costs, expertise, organizational flexibility, strategy, risk management, etc.
Note that this project is graded using the Minor Project Rubric (MBA 610). Please click on the underlined ‘Minor Project’ heading above and then look at the rubric so that you know how the project will be evaluated.
