Chapter # 14

Technological Disruption
And
Business Environment
LO 01: TECHNOLOGICAL DISRUPTION AND BUSINESS ENVIRONMENT:
Technology and disruption:
Disruptive technology is an innovation that significantly alters the way consumers, industries, or businesses operate. A
disruptive technology sweeps away the systems or habits it replaces, because it has attributes that are recognizably superior.
Recent disruptive technology examples include e-commerce, online news sites, ride-sharing apps such as Uber and Careem
and GPS systems, online media streaming platforms such as Netflix etc. In their own times, the automobile, electricity service,
and television were disruptive technologies. Risk-taking companies may recognize the potential of disruptive technology in
their own operations and target new markets that can incorporate it into their business processes. These are the "innovators"
of the technology adoption lifecycle. Other companies may take a more risk-averse position and adopt an innovation only
after seeing how it performs for others. Companies that fail to account for the effects of disruptive technology may find
themselves losing market share to competitors that have discovered ways to integrate the technology.

Example:
Blockchain, the technology behind Bitcoin, is a decentralized distributed ledger that records transactions between two
parties. It moves transactions from a centralized server-based system to a transparent cryptographic network. The
technology uses peer-to-peer consensus to record and verify transactions, removing the need for manual verification.
Blockchain technology has enormous implications for financial institutions such as banks and stock brokerages. For
example, a brokerage firm could execute peer-to-peer trade confirmations on the block chain, removing the need for
custodians and clearinghouses, which will reduce financial intermediary costs and dramatically expedite transaction
times.
Disruptive Technologies of the digital age:
The human mind is trained to visualize linear developments and finds it difficult to estimate exponential possibilities which
emanate from technology. Such disruptions are always resisted by humans at first, but once accepted and fully deployed,
they are capable of changing the way we live. Think about fire, the wheel and breaking the horse in ancient times to the
aeroplane and the automobile in the early 20th century followed by the internet and smartphones in recent times.
In particular, 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 to bring disruptive changes to the
market. With technology growing exponentially and businesses developing linearly, a big gap opens up between current
organisations and the capability which technology can offer. This gap is usually filled by innovative startups that disrupt the
existing business models by offering value in terms of both enhanced usage of a product or service and/or reduced cost.
(i) The Internet:
More people have more access to technology than ever before. Residents of developing countries increasingly enjoy energy-
powered appliances, entertainment devices, and communications equipment. Individuals and businesses in developed
countries in North America, Europe, and Asia are more than ever dependent on electronic communication devices for access
to information and for conducting business transactions. In today’s workplace environment, nearly every manager has a
desktop or laptop computer, fax machine, voice mail, mobile phone, PDA, and a host of other electronic devices to connect
the other employees, customers, suppliers, and information touch points.
One of the most visible and widely used technological innovations over the past decade has been the Internet. The Internet is
a global network of interconnected computers, enabling users to share information along multiple channels linking
individuals and organizations. Internet has revolutionized how business are conducted, education is imparted and households
operate.
New ways of going online are contributing to the growing use of the Internet. Companies such as Apple, Microsoft, Sony and
Samsung have introduced innovations across all their product lines to include the access of internet connectivity and Wifi. All
smartphones, including Apple iPhones and Androids, among others, include WiFi connectivity to provide users with faster
data transfer speeds than mobile phone carriers can provide.
As a result, the Internet has been a force that has changed the direction of businesses to create new products, infrastructure
and opportunities.

Example:
Netflix has transformed the entertainment industry by pioneering the streaming model. Originally a DVD rental service,
Netflix shifted its focus to streaming media, offering a vast library of movies, TV shows, and original content accessible
globally over the internet. This disruptive technology has reshaped how people consume entertainment, challenging
traditional cable TV and movie rental businesses.
E-Business:
During the various phases of technological development, electronic business exchanges between businesses and between
businesses and their customers emerged. During the past few years, these electronic exchanges, generally referred to as e-
business has increased e-business revenue at a faster pace than that of traditional business and the trend continues.
E-business has grown dramatically and become a way of life, from large companies and smaller start-up businesses to
individuals interested in shopping online. As technology became more affordable and easier to use, small and medium-sized
businesses have invested in e-business and technology systems because they discovered that the adoption of technology was
a money-saver rather than an expense in the long run. It gave the businesses a competitive edge over rivals by enabling them
to add new services and operate more efficiently. E business is undoubtedly here to stay and new applications appear
inevitable.
Now even older businesses are more open to modify their business models and budgets to include technology infrastructure
and create online channels for alternative sales.

Example:

Amazon revolutionized retail with its comprehensive e-commerce platform. Starting as an online bookstore,
Amazon expanded into a one-stop shop for a wide range of products, leveraging advanced logistics and
customer-centric services like Prime membership for fast shipping and streaming media. Amazon's success
illustrates how e-business can dominate traditional retail, setting new standards for convenience, selection, and
customer experience.
M-Commerce:
The first generation of cell phones, introduced in the 1980s, were clumsy analog devices; today’s digital “smartphones”
provide a range of applications, including e-mail and Internet access, in addition to voice communications.
Given the significant increase in smartphone users, businesses have looked for ways to reach out to these potential
customers.
Initially, cell phones were used mainly as a communications tool. But cell phone users all over the world have embraced
mobile phone as a way of conducting commerce. M-commerce, commerce conducted via mobile or cell phones, provides
consumers with an electronic wallet when using their mobile phones. People can trade stocks or make consumer purchases
of everything from hot dogs to washing machines and countless other products.
Today, so many companies provide the option to customers to turn their smartphones into devices for making purchases.
Example:

Starbucks has embraced mobile commerce through its Starbucks app, which allows customers to order and pay
for drinks and food ahead of time, earn rewards, and locate nearby stores—all from their smartphones. This
mobile-centric approach enhances customer convenience and loyalty while streamlining operations for Starbucks,
showcasing the power of m-commerce in enhancing customer engagement and operational efficiency.
Social Networking:
Social networking, a system using technology to enable people to connect, explore interests and share activities around the
world, exploded on to the technology scene in the early 2000s, altering many social and human interactions.
Many businesses use social media tools to reach out to their customers. It has now become a major marketing channel
forcing advertising companies and media houses to rethink the focus on the traditional print and TV advertising. This is an
example of major disruption due to technology in the world of advertising and marketing. Major online advertising tools include:
 Search Engine Optimization
 Facebook Ads
 Google Ads and clicks
 Website banners

Example:

Facebook has transformed how businesses engage with customers through its advertising platform,
Facebook Ads. Businesses can target specific demographics based on user data and interests, maximizing ad
relevance and effectiveness. Facebook's extensive reach and sophisticated targeting capabilities have made it a
cornerstone of modern digital marketing strategies, significantly influencing consumer behavior brand perception.
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 material such as graphics or video. The blogging revolution began in the early 2000s and just a
few years later, it was widely popular.
As blogging spread into all areas of our lives, ethical questions about blogs emerged. Critics argue that this blurred the ethical
line between what was honest opinion or helpful information and what was an advertisement paid for by companies to
influence individuals’ purchasing decisions.
Medical professionals also claimed that patients were posting unfounded and damaging reports on a doctor’s performance.
While some doctors admitted that blogs provided many patients with useful information, medical misinformation from
uncensored blogs was far more harmful.
Nevertheless, a lot of businesses, including but not limited to, apparel, cosmetics, electronics and hospitality use the medium
of bloggers to push their products in the market and compete with other brands. This is done through free products,
invitations to brand launch events and live unboxing of new products by influencers.
A new generation of blogs appeared in the first decade of the 21st century, called vlogs, or video web logs. All that was
needed was access to a digital camera that could capture moving images and high-speed Internet access.

Example:
Zoe Sugg, known as Zoella, is a prominent lifestyle blogger and vlogger who has amassed a large following
through her YouTube channel and blog. She creates content ranging from beauty tutorials and product
reviews to lifestyle advice, effectively influencing consumer trends and purchasing decisions in the cosmetics and
lifestyle sectors. Zoella's success highlights the growing influence of bloggers and vloggers as key opinion leaders
in digital marketing, demonstrating their ability to shape consumer preferences and brand perceptions.