They say it's disruptive...
The Pepperdine Alumni Association recently hosted a series of c-level folks to talk about disruptive strategy at their companies. Here are things they mentioned:
- Parker Aerospace developed a system to replace (the very explosive) oxygen in airliner fuel tanks with inert nitrogen. They are expanding the system into new markets beyond fuel systems.
- St. Jude Medical has a new wireless patient monitoring system. Constant monitoring reduces costs by allowing them to focus on the patients who need attention at the time they need it. Other folks appear for check-ups, but not in an emergency situation only.
- Yamaha musical products had a perfectly good digital replacement for their old analog mixers. However, their user base didn't like how it sounded. Yamaho replicated the look and feel of the old analog system over five years diode by diode, transistor by transistor, and then sold the system to the complaining users as a system that worked and sounded exactly the same, but was cheaper and easier to use.
- Nissan has approached their new Leaf fully electric auto differently by attacking the infrastructure system at the same time they designed the car, so there will be enough "re-fueling" locations at the final launch of the vehicle.
- Vizio figured out how to staff their $6 billion company (approximate) with only 175 folks by working very, very closely with their suppliers in Taiwan (one had to buy a $250 million piece of new equipment to make the new 3-D screens) to not only have them design the new systems, but have enough confidence in the ultimate success of Vizio's market penetration to justify such huge production line innovations. Vizio has focused on making the consumer experience cheaper and easier - their 3-D glasses cost $1.50, not $150. The TV itself is hugely more expensive to produce, costs Vizio will recoup in expanded production over time.
- Tesla owns their whole distribution system, ensuring - they hope - happy customers.
- Epicardial Technologies has a new heart surgerly system. No more chest-cracking - they go in through small incisions.
- Spectral Molecular Imaging has focused on earlier diagnosis of disease with an imaging system that focuses on the molecular level.
- Origin Oil is figuring out how to use algae to generate oil.
The test book definition of a disruptive strategy is that the new product system is simpler, cheaper and not an incremental improvement on an existing product or service. Some of the systems above aren't simpler, for sure, but they are improvements. We'll see how they do in the marketplace.