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How to identify your enemies before they destroy you.

Farshad Rafii1, Paul J Kampas

  • 1Center for Technology and Enterprise, Babson College, Wellesley, Massachusetts, USA. rafii@babson.edu

Harvard Business Review
|November 9, 2002
PubMed
Summary

Companies can proactively identify disruptive innovations with a new tool. This methodology uses collective wisdom to assess threats, enabling timely strategic responses to protect core businesses from emerging competitors.

Area of Science:

  • Business Strategy
  • Innovation Management
  • Competitive Analysis

Background:

  • Established corporations often overlook emerging disruptive innovations, leading to significant market share loss.
  • Distinguishing genuine threats from minor developments is challenging for businesses.
  • Disruptive innovations typically offer lower initial performance at a lower cost, gradually improving to displace incumbents.

Purpose of the Study:

  • To present a novel tool for detecting potential disruptive innovations.
  • To provide a methodology for companies to assess and respond to emerging threats.
  • To help management identify and address competitive threats before they become critical.

Main Methods:

  • Development of a decision-making tool to identify disruptive innovations.

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  • A methodology combining an analytical instrument and an organizational process.
  • Harnessing the organization's collective wisdom to evaluate innovation impact.

    • Main Results:

    • The tool helps companies distinguish genuine threats from non-threats.
    • It enables management to assess the likelihood of an innovation damaging an incumbent business.
    • The methodology facilitates systematic identification and response to competitive threats.

    Conclusions:

    • Disruptive innovation is not inevitable; proactive detection is possible.
    • The developed tool provides a rigorous approach to managing competitive threats.
    • Effective use of the tool can differentiate between reactive and proactive business strategies.