Pipeline Accelerator Blog

Are you in an overserved market ripe for disruption?

Disruptive innovation in development of new productsIf you take a look at the commercial below, you might ask what it has to do with an overserved market.  You may also wonder what it has to do with new product development. It’s a great example of a trying to launch new products into an over-served market and what can easily happen when you do.

No question that flat screen TV’s rapidly became an overserved marker. Traditional video is based on three colors (Red, Green, and Blue), and the addition of a fourth color, yellow, allows Sharp’s new Quatron technology to reproduce over 100 times more shades for those with an eye for color. So someone at Sharp said, “Hey, let’s make an improvement in LED that only a few percent of people can even see.

That’s why, in a classic sign of an over-served market ripe for disruption, Sharp was unable to charge a higher price for this “improvement” to LED technology – even with the extra cost and complexity that it must add.  Actually, they entered at a lower price than comparable Samsung and LG TV’s.

So what’s going on here?  Simply the time-honored march of disruption, where initially under-performing technologies get faster, better and cheaper allowing them to compete on new dimensions of performance. In this case, those dimensions are thin, lightweight design  and lower energy usage.

In the television market, traditional tube TV’s were initially  disrupted by plasma technology which offered a thin , flat, format. Plasma technology was then disrupted by LCD technology which offered thinner designs and lower energy usage. Now, LED’s are starting to replace LCD’s by offering energy efficiency and razor thin designs.

To determine of your market is ripe for disruption, just ask yourself these questions:

  1. Is my market over-served?
  2. Do I constantly have to add performance just to keep prices from falling?
  3. Do added features and benefits bring me any margin?
  4. Are there alternative technologies which are lower performing but are getting better over time?

Next time we’ll talk about the implications for managing your new product development processes.

Let us know what you think or share your stories of disruption by leaving a comment below.

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