How Likely Is Your Industry to Be Disrupted? This 2×2 Matrix Will Tell You (2024)

Summary.

The topic of industry disruption— “a process whereby a smaller company with fewer resources is able tosuccessfully challengeestablished incumbent businesses”— is rife with misconceptions. One of the biggest is that it is a mysterious, random, and unpredictable event. Another is that it happens to you in ways that are beyond your control. Those views may have been valid at one time, but they no longer apply. Industry disruption, as Accenture research has found, is reasonably predictable. And with wisdom about its predictability comes opportunity. To help business leaders better understand industry disruption,the authors developed an index that measures an industry’scurrent levelof disruption as well as itssusceptibility to futuredisruption. For the former, they examined the presence and market penetration of disruptor companies; they also considered incumbents’ financial performance. For the latter, we measured incumbents’ operational efficiency, commitment to innovation, and defenses against attack.The authors then usedthat information to identifyfour distinct states of disruption: durability, vulnerability, volatility and viability. Theirresearch shows that it is possible for business executives to assess how susceptible their industry is to disruption and why, and to do the same at a more granular level for their company. Armed with that knowledge, they will be better able to define the right strategic response.