Business Model and Disruption in the Age of Smart-Connected-Products

Assessment 1

Table of Contents
1. Defining the Terms Business Model and Disruption.........................................................................2
2. Opportunities and Threats caused by Advances in Smart-Connected-Products.................................3
3. Applying Buisness Model Framework by Osterwalder and Pigneur (2010)......................................3
4. Business Model Perspectives.............................................................................................................6
5. Conclusion.........................................................................................................................................8
References.............................................................................................................................................9
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1. Defining the Terms Business Model and Disruption
Chesbrough, (2010) has advocated that the in the present disruptive age, the established
business models are under attack. It has been opined by (Gambardella & McGahan, 2010)
that the business models in the recent times have become less durable that they used to be.
The basic rules that were adopted by the business models to create and capture economic
value were fixed in place for years as the business organizations emphasized on executing the
same business models better than its competitors. However, in the recent times the business
models are experiencing rapid displacements and disruptions and in extreme cases, they are
facing outright destruction. This has been evident from some considerable examples of the
business models like the Bitcoin emphasized on bypassing the traditional banks and
clearinghouses with the blockchain technology, edX and Courseera threatened the business
schools with their massive open online courses, Tencent has outcompeted in the Internet
services through microtransactions and Uber sidestepped the license system that protects the
taxi cabs franchises in the cities across the globe (Habtay, 2012).
Thus, on the basis of the above examples, it can be said that a business organization that does
not adopt a disruptive focus are following a me too platform i.e. they emphasize on doing the
same things in the same ways for the same reason for a long time. They struggle with the
concept of change So, adopting a disruptive business model make the business organizations
capable of reengineering, optimizing and non-intermediating its products and services or the
market or a sector of the industry. Moreover, the business environment is experiencing rapid
technological advancements and feeling the heat of globalization (Osterwalder & Pigneur,
2010). These two aspects are making the business of all sizes face the emerging need for
adopting a disruptive business model. Another example that can be cited in the context of the
failure of the traditional business model and the ways disruptive business model lead the
business to success is through the example of Domino’s Pizza. Domino’s Pizza while
conducting its business through the traditional business model experienced all time low in its
share price and slipped down the ranking to occupy the last position in terms of consumer
preferences in the 2009 survey (Mcorpcx, 2018). Realizing the failure of its business model,
Domino’s Pizza integrated disruptive technological innovations to optimize all its business
aspects. This helped the business in rebuilding its image in the minds of the customers’ tastes
and preferences.
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2. Opportunities and Threats caused by Advances in Smart-Connected-
Products
The Smart-Connected-Products facilitate the business organizations with expanding
opportunities on one hand and on the other hand emphasizes on altering the industry structure
and the nature of competition. It also proves to be beneficial for the business organizations
with new functionality, enhanced reliability and higher product utilization and develop
capabilities that help the business in cutting across and going beyond the traditional product
boundaries (Christensen et al., 2009). So, business organizations like Domino’s Pizza are
facilitated with new competitive opportunities and threats through the Smart-Connected-
Products. Business organizations like Domino’s Pizza are facilitated with new strategic
choices through Smart-Connected-Products. It assists the firm in creating value and facilitates
new ways of managing the prodigious amount of new data and the ways in which the firm
can maintain their traditional relationship with the business partners since Smart-Connected-
Products helps in redefining the channels.
Thus, on the basis of the above aspects, it can be said that Smart-Connected-Producers
facilitates the business organizations like Domino’s Pizza with significant opportunities in the
form of competitive advantage through product differentiation, enhanced level of satisfaction
on the part of the customers, operational efficiency, gaining enhanced knowledge of how
customers actually use the products and achieving enhanced ability ion segmenting the
market, setting effective prices for capturing value and offering enhanced offerings to the
market segments (Porter & Heppelmann, 2015). In addition to the above opportunities,
Smart-Connected-Products also pose significant level of threats to the business organizations
like Domino’s Pizza. The smart-connected-products demands a complete business
reengineering together with high investments, difficulty in maintaining relationship with the
traditional business partners, demand highly skilled and experienced technical professionals
and it also leads to confusion on the part of the business organizations to secure, capture,
analyze and secure the collected data for achieving enhanced value of offerings.
3. Applying Buisness Model Framework by Osterwalder and Pigneur
(2010)
Pillar Elements of
Business Model
Descriptions
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