In an era of rapid technological change, disruption is no longer an option, but a necessity for businesses to adapt and survive
What is disruption?
Disruption refers to the creation of changes that can penetrate existing markets or industries, disrupting existing operations and creating changes that surpass the old system. The most prominent examples are Uber , which disrupted the traditional taxi market, and Netflix, which transformed the film and television viewing industry. In Thailand, an example is the arrival of online retail platforms like Shopee , which changed the way people shop in the traditional Thai marketplace.
Why is disruption important?
Disruption is a key driver of innovation and progress. When disruption occurs, it leads to more efficient technological development. While it may sometimes cause the demise of older businesses, it also gives rise to new ones and creates greater convenience for consumers
Characteristics of Disruptive Innovation
- This isn't traditional development: Disruption isn't just about improving existing things, but about introducing new ways of doing things that have never been done before.
- Change the way you do business: For example, using online platforms to connect consumers with various services.
- Creating new value: By changing the perspective on creating value for products or services, such as reducing costs or increasing efficiency.
Examples of disruptive innovation that have occurred in Thailand in various fields.
1. E-commerce and the transformation of Thai retail
Examples: Shopee, Lazada, JD Central.
Impact:
- Consumer purchasing behavior has changed from shopping in department stores to shopping online
- Traditional retail businesses, such as department stores and shops without online channels, have to adapt, or some have had to close down
- Competition has increased due to the entry of foreign platforms
2. FinTech and Mobile Banking
Examples: SCB EASY, K PLUS, TrueMoney Wallet, Rabbit LINE Pay.
Impact:
- Reducing the use of cash, people are turning to e-wallets and banking applications more
- Bank branches are decreasing and shifting towards digital services
- Credit and lending systems are beginning to utilize new platforms that bypass banks, such as Peer-to-Peer Lending
3. Travel and transportation services
Examples: Grab, LINE MAN, Robinhood.
Impact:
- Ride-hailing apps have replaced traditional taxis
- The food delivery business has grown exponentially, forcing restaurants to join these platforms
- This has impacted traditional transportation businesses, such as motorcycle taxis or parcel delivery services that focus on offline offerings
4. Tourism and accommodation platforms
Examples: Airbnb, Agoda, Traveloka.
Impact:
- Tourists can choose accommodation from private individuals instead of booking hotels in the traditional way
- Hotels need to adjust their strategies, such as lowering prices or increasing promotions, to compete
- It increases the opportunities for ordinary people to rent out their accommodations more easily
5. Media and Entertainment Industry
Examples: Netflix, YouTube, TikTok, Disney+ Hotstar.
Impact:
- Traditional television viewership has declined, with people turning to streaming platforms instead
- The traditional cable TV and advertising businesses have been significantly impacted
- Artists and creators can create their own content and earn income from digital platforms
6. Food and Beverage Industry
Examples: Cloud Kitchen, AI Café, Automated Coffee Machine.
Impact:
- Cloud kitchens (centralized kitchens without a storefront) allow restaurant businesses to avoid paying expensive rent for space
- Robots and AI are being used to make coffee and prepare food, reducing reliance on employees
- Automated QR code and POS food ordering systems reduce costs and increase efficiency
7. Online Education (EdTech)
Examples: SkillLane, Coursera, Thai MOOC.
Impact:
- Learning is no longer confined to the classroom
- People can study anywhere
Disrupting organizations
From an organizational perspective, disruption can present both challenges and opportunities for growth. Businesses that can adapt to disruption can create innovations that add value and better meet customer needs. Conversely, organizations that fail to adapt quickly enough may fall behind or lose market share
Preparing to cope with disruption
- Embracing innovation: Accepting and developing new technologies is crucial for organizations to combat disruption.
- Develop and train your team: Prepare your team with the new skills necessary to compete in the digital age.
- Look for change: Seek opportunities to break away from old patterns and embrace potential future changes.
summarize
Disruption is not just about destroying the old, but also about creating new opportunities. It helps us understand the power of innovation and the rapid changes occurring in today's world. Preparing to cope with disruption is therefore something every organization should consider in order to survive and grow in this era of change
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