Article by Paul F Nunes and Larry Downes

As business costs are driven ever lower, some companies are creating disruptive products that, right out of the gate, are simultaneously better and cheaper than existing products. The upshot? Success for those who play by the new rules of strategy and competition – and disaster for incumbents who can’t adapt fast enough.

Nearly everything you think you know about strategy and innovation is wrong.

The most recent round of improvements in information technologies has changed the game once again, driving down costs and prices over time. The challenge now for innovators is to invent products so beloved by customers that they will pay more for them despite falling prices.

Given the time it takes to innovate, that can be a tall order. As a result, markets are being rocked by a new kind of offering – one that renders the traditional price-performance trade-off irrelevant.

New products and services that exploit today’s power of IT now enter mainstream markets not only better but also cheaper.

In today’s fully connected, always-on world, these new offerings are also better integrated with the way customers live and work (in strategy terms, they provide greater “customer intimacy”). And word of their superiority in all relevant dimensions now travels the globe in a flash, like the latest YouTube sensation.

The result: Entire product lines and whole markets are now being created or destroyed overnight. Say hello to “big-bang disrupters.” Once launched, these disrupters are hard to fight. They don’t just create dilemmas for innovators. They trigger disasters. Read the full article…

About the authors

Paul F. Nunes is the managing director of research for the Accenture Institute for High Performance.

Larry Downes, a fellow with the Accenture Institute for High Performance.