Core Capabilities Model: Clayton Christensen's Disruptive Innovation Model
1. Core Capabilities Model :
Banks that are equipped with a good grasp of the e-banking phenomenon will be more able to make informed decisions on how to transform them into e-banks and to exploit the e-banking to survive in the new economy. Given the e-banking is a financial innovation (Liao and Cheung, 2003) [9], the change may render the organizational capabilities of the traditional banks obsolete. From the resource-based view (Mahoney and Pandian, 1992) [10], in such a context, the banks must constantly reconfigure, renew, or gain organizational capabilities and resources to meet the demands of the dynamic environment. Developing core capabilities can help the banks redeploy their resources and renew their competencies to sustain competitive …show more content…
Disruptive Innovation Model :
Clayton Christensen’s Disruptive Innovation Theory (DIT) is one of the most influential theories in the recent academic and management literature. This is reflected not only in his best selling books “The Innovator’s Dilemma” and “The Innovator’s Solution”, but also in the discussion and follow-up work that his theory created among academics and managers alike.
Christensen suggests a broad definition of the concept of innovation. To him, innovation refers to all changes of “processes by which an organization transforms labor, capital, materials and information into products or services of greater value” (Christensen 1997/2002) [14]. Thus, in addition to creating new processes and products, innovation also includes new types of business models. The DIT recognizes two types of innovation: on the one hand, sustaining innovations generate growth by offering a better performance in existing markets. Usually, regardless of whether they are incremental or radical, these innovations are exploited successfully by the established players in an industry and do not lead to revolutionary changes in an industry’s landscape. On the other hand, compared to existing products and business models, disruptive innovations initially have a lower performance in the traditionally most important performance criterion (such as functionality, speed, or
Banks that are equipped with a good grasp of the e-banking phenomenon will be more able to make informed decisions on how to transform them into e-banks and to exploit the e-banking to survive in the new economy. Given the e-banking is a financial innovation (Liao and Cheung, 2003) [9], the change may render the organizational capabilities of the traditional banks obsolete. From the resource-based view (Mahoney and Pandian, 1992) [10], in such a context, the banks must constantly reconfigure, renew, or gain organizational capabilities and resources to meet the demands of the dynamic environment. Developing core capabilities can help the banks redeploy their resources and renew their competencies to sustain competitive …show more content…
Disruptive Innovation Model :
Clayton Christensen’s Disruptive Innovation Theory (DIT) is one of the most influential theories in the recent academic and management literature. This is reflected not only in his best selling books “The Innovator’s Dilemma” and “The Innovator’s Solution”, but also in the discussion and follow-up work that his theory created among academics and managers alike.
Christensen suggests a broad definition of the concept of innovation. To him, innovation refers to all changes of “processes by which an organization transforms labor, capital, materials and information into products or services of greater value” (Christensen 1997/2002) [14]. Thus, in addition to creating new processes and products, innovation also includes new types of business models. The DIT recognizes two types of innovation: on the one hand, sustaining innovations generate growth by offering a better performance in existing markets. Usually, regardless of whether they are incremental or radical, these innovations are exploited successfully by the established players in an industry and do not lead to revolutionary changes in an industry’s landscape. On the other hand, compared to existing products and business models, disruptive innovations initially have a lower performance in the traditionally most important performance criterion (such as functionality, speed, or