@theprof00: What you said is mind boggeling wrong. You are getting the basic definitions wrong. I'll go though it real quick and maybe you'll understand.
Incumbent: Leader of the mainstream market (the normal market, the one before a disruptor entered). They would be who is being disrupted. They specilize in sustaining innovation
Disruptor: Leaders in the new market (but can enter though the existing market, like Wal-Mart did). They work differently, usually cheaper, more customizable, or more convinient. They weild the disruptive innovation.
Question 1: Can the disruptor become the incumbant. Answer: Only when the incumbant is removed from the market, and the disruption becomes the norm. So, if you think Nintendo is an incumbant, no, you are wrong.
NOTE: In order to have disruption, you must have overshooting.
Overshooting: Overshooting is when the sustaining innovations go beyond what customers can absorb. This usually happens when sales are stagnant. A disruptor is bound to enter when overshooiting happens.
Question 2: Can Microsoft be disrupting Nintendo. Answer: No. Nintendo has to be overshooting the market in order to have a disruptor. Since there is no overshooting, there is no disruption. Also, Microsoft is an incumbant. What they are doing is responding to Nintendo.
Top Down disruption: This is a disruption that starts at the highest teir, and then moves down usually by being cheaper or more assesable. These disruptions are less common, and are always betten by a bottom-top disruption.
Question 3: If Microsoft were disrupting Nintendo, would they win. Answer: Not if they are going top down like has been claimed. A bottom top will always beat it out.
Upstreaming: When a disruptor enters, the incumbents will happily cede the market. This is called Upstreaming. Upstreaming always feels good at first, but it will be the end of the company.
Question 4: Will the upstream forever? Answer: No. The incumbants will respond. There are three responses
- Growth driven co-option: The incumbant jumps into the new market and tried to capitilize on the growth. Natal is this since it tries to be like the Wii as much as it can
- Defensive co-option: The incumbant tries to stop the disruption from impacting it's higher tier markets. It's the disruptiong for their bnest customers.
- Cede the market
"What indicates an attempt at co-option? One sign is an effort by incumbents to develop products or services that mimic the entrant's offering. Acquiring and attempting to integrate one of the class of disruptive entrants is a clear signal that the incumbent is attempting co-option. When business model or process asymmetries don't exist, co-option becomes a viable incumbent response strategy."
Question 5: Can this work. Answer: Yes, if the disruptor does not have the asymetric skill and motivation, the incumbants will beat out the disruptor.
Asymetric Motivation (sheild): This is the motivation which allows the disruptor to be gaurded from counter attacks. Without it, the incumbant will absord the disruptor
Asymetric Skill (sword): the ability of the disruptor to move upmarket. This allows them to take the best markets from the incumbant
Question 6: Does Nintendo have these? Yes. Nintendo's sheild is that they wish to expand gaming (which neither Microsoft nor Sony want to do. Otherwise, they wouldn't have made their machines 400$ and 600$). Their skill is that they are an integrated hardware and software company, so they make the hardware for the software. Sony and Microsoft are not (don't even try to say they are).
How can you tell if combatants have asymmetric skills? Make a list of the tasks the company has repeatedly addressed, for which formal and informal processes have likely coalesced. Compare the list to the nature of tasks required to succeed in the disruptive market. If a company's processes facilitate its doing what it needs to get done in a market context, it has the requisite skills to take that market. Companies all have strengths and weaknesses. When one firm has strengths in markets in which another firm's capabilities are weaknesses, the firms have asymmetric skills.
NOTE: If the disruptor has both of these, they will win.
Question 7: What happens to Sony and Microsoft then!? They will be OK right. Answer: To quote Christensen "The end can come swiftly and can appear stunning to the untrained eye. Typically, the best an incumbent can do is to belatedly acquire the winning firm and stave off ultimate destruction."
There you go. This can all be read here, and I suggest you read it before trying to argue the topic. You sound like a fool otherwise.
