Must read: Apple strategy via the disruptive innovation lens

Almost all business readers are familiar with Clayton Christenson’s work on disruptive innovation and the consequent innovator’s dilemma. Now the editors of his newsletter have put Apple’s business strategy through its paces from the perspective of disruptive innovation. The article examines the launch dynamics and subsequent growth of Apple’s GarageBand software and makes some convincing predictions on what Apple might do next. What are the key lessons we can draw from this?

First, the order of entry is not as significant as you probably would expect. In fact, I would think that Apple’s renaissance has begun when they stopped focusing on being first to market and focused more on being first to segment a new market. The difference is subtle, but significant; Apple is letting someone else talk up the concept before taking a scalpel to the market. But it is absolutely critical that your product is the first to emphasize and deliver the benefits which are important to the target segment.

Second, if it is a nascent market, the best approach would be to piggyback on an established product/service so the product can be pushed to the customer. By bundling GarageBand with iLife and Macs, suddenly a million non-consumers of music publishing found that they can record their own music without recourse to expensive studio/professional standard equipment.

Third, demo, demo & demo once again. If you are planning to win over a lot of new/non-consumers, you got to walk the talk. If the product claims to be ridiculously easy, show it and then show it once again. Steve Jobs did a great job of this in Mac Expo 2004 by riffing with John Mayer on stage and publishing a brand new song in double quick time. I am sure this demo, more than any marketing blurb, drove home the ease and convenience of GarageBand.

Fourth, build a scaffolding of organizational capabilities around the new product before you release it into the wild. Apple put together a new flawless combination of marketing, design, technology and benefits to wow the target consumers. Each and every element in this potent mix is responsible for the runaway success Apple is enjoying in slicing away huge chunks of consumers from markets ranging from MP3 players, music and computing.

Fifth, let your ambition define your market. Most markets are normally distributed implying that majority of your cusomters will revert to the mean. Usually at the mean, the winner is not defined by performance but by design and convenience. So if your size or ambition constrains you to go after big markets, make sure that you can corner the cachet when it comes to ease and simplicity.

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2 thoughts on “Must read: Apple strategy via the disruptive innovation lens

  1. Kudos to the Pivot Point team for this post. Very intersting, and for me, very timely, especially the second paragraph (quoted below)

    “First, the order of entry is not as significant as you probably would expect. In fact, I would think that Apple’s renaissance has begun when they stopped focusing on being first to market and focused more on being first to segment a new market. The difference is subtle, but basically, Apple is letting someone else talk up the concept before taking a scalpel to the market. But itis absolutely critical that your product is the first to emphasize the benefits which are absolutely important to the target segment.”

    Great reminder of what you have to do to be successful and that first mover advantage isn’t always as it seems.

    Keep up the great work!!

  2. Also consider this: Apple was the first to deliver PC to the masses; but Microsoft walked away with the booty by piggybacking on industry powerhouse IBM’s open PC architecture. IBM did all the hard work in moving PC to mainstream and its open architecture meant that it encouraged visions of profits, while Microsoft got a hammerlock on the cirtical pivot point in computing: software.
    Makes one wonder how important is technological innovation in business success!

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