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review sheet - 6. Disruptive technology (C12) Disruptive at...

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6. Disruptive technology (C12) Disruptive at two levels: 1. product level : new technology is superior to older technology for example floppy disk replaced flash drive 2. Business model level : when new technology is superior older technology causes the existing business model to no longer be compatible with the new technology. Example: TiVo and Hulu disrupts Netflix which disrupts Blockbuster Innovator’s dilemma : why can’t incumbent firms adjust to new technology? It’s hard for incumbent’s to adjust to new technology because they are so close to customer can’t see where the future of the technology is going. Customers don’t expect/want the next big thing until its already made. For example: Apple is always making new generation iPods and can easily be taken over by a smaller firm which has a totally out of the box idea. See graphs: 7. Decision Making (C13) 1. Rational ways of thinking a) Expected value- Probability * Expected Utility b) Decision tree- using a tree to figure out the probability
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review sheet - 6. Disruptive technology (C12) Disruptive at...

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