Unit Four
Building Innovation
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved
Unit Four
• Chapter Thirteen - Creating Innovative
Organization
• Chapter Fourteen - E-Business
• Chapter Fifteen - Creating Collaborative
Partnerships
• Chapter Sixteen - Integrating Wireless
Technology in Business 13-2
Chapter 13
Creating Innovative
Organizations
McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, All Rights Reserved
Learning Outcomes
13.1 Compare disruptive and sustaining
technologies
13.2 Explain how the Internet caused
disruption among businesses
13-4
Learning Outcomes
13.3 Define the relationship between the
Internet and the World Wide Web
13.4 Describe the Internet’s impact on
information along with how these
changes are affecting business
13-5
Disruptive Technology
• How can a company like Polaroid go
bankrupt?
• Digital Darwinism – implies that
organizations which cannot adapt to the
new demands placed on them for
surviving in the information age are
doomed to extinction
13-6
Disruptive Versus Sustaining
Technology
• What do steamboats, transistor
radios, and Intel’s 8088 processor all
have in common?
– Disruptive technology – a new way of doing
things that initially does not meet the needs
of customers
– Sustaining technology – produces an
improved product customers are eager to buy
13-7
Disruptive Versus Sustaining
Technology
13-8
Disruptive Versus Sustaining
Technology
• The Innovator’s Dilemma discusses how
established companies can take
advantage of disruptive technologies
without hindering existing relationships
with customers, partners, and
stakeholders
13-9
Disruptive Versus Sustaining
Technology
• Companies that capitalized on disruptive technology
13-10
The Internet – Business Disruption
• One of the biggest forces changing business is
the Internet
• Organizations must be able to transform as
markets, economic environments, and
technologies change
• Focusing on the unexpected allows an
organization to capitalize on the opportunity for
new business growth from a disruptive
technology
13-11
Disruptive Versus Sustaining
Technology
Internet penetration by world region
13-12
Disruptive Versus Sustaining
Technology
• World Internet Users
13-13
Evolution of the Internet
• The Internet began as an emergency military
communications system operated by the
Department of Defense
• Gradually the Internet moved from a military
pipeline to a communication tool for scientists to
businesses
– Internet – computer networks that pass information from
one to another using common computer protocols
– Protocol – standards that specify the format of data as
well as the rules to be followed during transmission
13-14
Evolution of The World Wide Web
• World Wide Web (WWW) – a global
hypertext system that uses the Internet as
its transport mechanism
• Hypertext transport protocol (HTTP) –
the Internet standard that supports the
exchange of information on the WWW
13-15
Evolution of The World Wide Web
13-16
Evolution of the World Wide Web
• The Internet’s impact on information
– Easy to compile
– Increased richness
– Increased reach
– Improved content
13-17
Evolution of The World Wide Web
• File formats offered over the WWW
13-18
Evolution of The World Wide Web
• The Internet makes it possible to perform
business in ways not previously
imaginable
• It can also cause a digital divide
– Digital divide – when those with access to
technology have great advantages over those
without access to technology
13-19
WEB 2.0
• Web 2.0 - a
set of
economic,
social, and
technology
trends that
collectively
form the basis
for the next
generation of
the Internet 13-20
WEB 2.0
Timeline of Web 1.0
13-21
THE FUTURE – WEB 3.0
• Semantic Web encompasses the
following:
1. Transforming the Web into a database
2. An evolutionary path to artificial intelligence
3. The realization of semantic Web and SOA
4. Evolution toward 3D
13-22
CHAPTER THIRTEEN
Opening Case Study Questions
1. Do you agree that eBay founder Pierre Omidyar used
disruptive technology to change the auction business? Why
or why not?
2. Create a Porter’s Five Forces analysis highlighting eBay’s
market position. Be sure to highlight any new technologies
that have the potential to disruptive eBay’s business
3. What types of ethical dilemmas will an online business such
as eBay face that a traditional company would not face?
4. What types of security issues will an online business such
as eBay face that a traditional company would not face?
13-23
CHAPTER THIRTEEN CASE
Failing to Innovate
• Obtaining the first-mover advantage is
critical to any business that wants to
compete in the Internet economy
• However, gaining a first-mover advantage
is typically temporary, and without
remaining innovative the company can
soon fail
13-24
Chapter Thirteen Case Questions
1. If these companies all had a first-mover
advantage, then why did the products fail?
2. For each of the above determine if the
technology used was disruptive or sustaining.
3. Choose one of the products above and
determine what the company could have done
to prevent the product from failing.
4. Can you name another technology product that
failed? Why did it fail? What could the
company have done differently for it to
succeed? 13-25
