Chapter 5: Technological disruption & business environment Page 28

Ch # 5 Technological disruption & business environment

TECHNOLOGICAL DISRUPTION AND BUSINESS ENVIRONMENT

Technology and disruption

▪ Disruptive technology is an innovation that significantly

- Alters the way consumers, industries, or businesses operate.
- Sweeps away the systems or habits it replaces (being latest)
▪ In their own times, automobile, electricity service, and TV were disruptive technologies.
▪ Risk-taking companies may recognize the potential of disruptive technology in their own
operations and target new markets using their business processes.
▪ These are the "innovators" of the technology adoption lifecycle.
▪ Other companies may follow them only after seeing how it performs for others.
▪ Companies that fail to account for effects of disruption may find themselves losing market.

Blockchain as an Example of Disruptive Technology

▪ Blockchain (technology behind Bitcoin) is a decentralized distributed ledger
▪ It records transactions between two parties and moves transactions from a centralized
server-based system to a transparent cryptographic network.
▪ It uses peer-to-peer agreement to record and verify transactions (no manual verification).
▪ It has many implications for financial institutions such as banks and stock brokerages.
(e.g. executing peer-to-peer transaction will save time and cost, removing intermediary)

Disruptive Technologies of the digital age

▪ Human mind normally realize linear and not exponential possibilities (unlike technology).
▪ Disruptions are always first resisted by humans, but then they adopt it when see that useful
▪ These days IT is moving faster than ever, driven by developments in 3 basic areas;
- Processing power,
- Communication speed
- Storage capacity.
▪ IT is combining with improvements in specific industry technology in almost every sector
▪ A big gap opens up between current organisations and capability which technology can do.

The Internet

▪ More people have more access to technology (devices etc) than ever before.
▪ Today’s, nearly every manager has a desktop or laptop, fax, voice mail, mobile phone etc
▪ One of the most visible technological innovations over past decade has been the Internet.
▪ New ways of going online are contributing to the growing use of the Internet.
▪ Cell phones have access of internet connectivity and Wifi with faster data transfer speeds
▪ Now internet has changed the direction of businesses to create new dimensions

E-Business

▪ Electronic business exchanges between businesses have emerged.

▪ E-business has grown dramatically and become a way of life for all type of businesses
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▪ As technology became more affordable and easier, small and medium businesses have
invested in e-business and technology systems
▪ It gave the businesses a competitive edge over rivals by enabling them to add new services
▪ All businesses are more open to modify their business models to include technology
infrastructure and create online channels for alternative sales.

M-Commerce

▪ Initially cell phones were clumsy analog devices but today’s digital “smartphones” provide a
range of applications, including e-mail and Internet access as well
▪ Initially, cell phones were used mainly as a communications tool.
▪ But now users all over the world have taken mobile phone as way of conducting commerce.
▪ M-commerce (commerce conducted via mobile), provides consumers with an electronic
wallet when using their mobile phones.
▪ People can trade stocks or make purchases of everything using that E-Wallet

Social networking

▪ A system using technology to connect, explore interests and share activities around world
▪ Many businesses use social media tools to reach out to their customers.
▪ It has now become a major marketing channel (replacing Paper and TV advertising).
▪ Major online advertising tools include:
- Search Engine Optimization (SEO)
- Facebook Ads
- Google Ads and clicks
- Website banners

Blogs and Vlogs.

▪ A blog is a web-based journal or log maintained by an individual with regular entries of

commentary, descriptions, or accounts of events or other graphics or video etc.
▪ A problem is differentiation between what is honest opinion or what is paid advertisement
▪ Many businesses use the medium of bloggers to push their products in the market
▪ This is done through free products, invitations to brand launch events etc.
▪ Vlogs (or video web logs) is a new type of blogs appeared in first decade of 21st century
▪ All that needed is access to a digital camera and high-speed Internet access.

Note: Ch # 6 only contain 4 questions and solutions on Ch 1 to 5, therefore is not

included in notes portion; however questions and solutions related to said
portion can be found onwards in the book.