Strategic Management Notes 2024-2025 PDF

APUNTES DIRECCIÓN ESTRATÉGICA Pablo Sánchez Curso 2024-25 ÍNDICE 2-Side platforms.......................................................................................... 2 Amwell..............................................................................................

APUNTES DIRECCIÓN ESTRATÉGICA Pablo Sánchez Curso 2024-25 ÍNDICE 2-Side platforms.......................................................................................... 2 Amwell............................................................................................................... 3 Benefits for the players........................................................................................................ 3 Barriers to adoption.............................................................................................................. 4 Reasons of success............................................................................................................. 4 Orange Rea and Go............................................................................................. 4 Defectos............................................................................................................................... 4 Razones de la fallida............................................................................................................ 5 Success and failure..................................................................................... 5 Successful organizations..................................................................................................... 5 Failure.................................................................................................................................. 6 Vocabulario................................................................................................. 6 Choice of industry................................................................................................................ 8 SWOT analysis..................................................................................................................... 9 Environment....................................................................................................... 9 Industry............................................................................................................. 9 Porter............................................................................................................... 11 Rivalry among competitors................................................................................................. 12 Bargaining power of customers.......................................................................................... 12 Bargaining power of suppliers............................................................................................ 13 Threat of potential entrants................................................................................................ 14 Threat of substitute products.............................................................................................. 15 Vertical integration.............................................................................................................. 15 Business models.............................................................................................. 16 Choices.............................................................................................................................. 17 Value creation....................................................................... ¡Error! Marcador no definido. Dell and AUSA.................................................................................................. 18 AUSA strategy.................................................................................................................... 18 DELL strategy..................................................................................................................... 19 Movistar and Pepephone................................................................................... 19 Movistar.............................................................................................................................. 20 Pepephone......................................................................................................................... 20 Vision............................................................................................................... 20 Mission............................................................................................................ 21 Core values...................................................................................................... 21 2-Side platforms Una two-sided platform o plataforma de dos lados es un modelo de negocio que conecta dos grupos de usuarios interdependientes, beneficiándose mutuamente a través de su interacción dentro de la plataforma. El valor de la plataforma aumenta para cada grupo de usuarios cuando el otro grupo también crece. Este tipo de plataformas actúa como intermediario entre dos tipos de actores, facilitando la interacción y, generalmente, recibiendo ingresos a través de comisiones o tarifas por el uso de la plataforma. Ejemplos: 1. Uber: Conecta a conductores (proveedores de servicios) con pasajeros (demandantes de servicios). 2. Airbnb: Conecta a propietarios de inmuebles (anfitriones) con huéspedes que buscan alojamientos. 3. Amazon: Conecta a vendedores de productos con compradores. 4. eBay: Plataforma que conecta a vendedores con compradores en un sistema de subasta o venta directa. 5. PlayStation/Xbox: Conecta a desarrolladores de videojuegos con jugadores. En todos estos casos, la plataforma facilita la interacción entre dos grupos, y su éxito depende de tener una base suficiente de usuarios en ambos lados. Las two-side platforms tienen una tecnología detrás de la plataforma que permite conectar grupos. Para que resulte interesante, deben atraer a gente de los dos grupos que pretende atraer y poner en común. De lo contrario, si no hay suficientes personas de un grupo, las personas del otro grupo no tendrán incentivos de entrar. Otra característica de estas plataformas es que generan un efecto de red (network effect). Este efecto se basa en que estas plataformas generan redes entre las personas, provocando que solo una plataforma acabe teniendo el mercado. Ej. WhatsApp. Si todo el mundo utiliza WhatsApp, nadie utilizará otras plataformas, porque todos su entorno está en WhatsApp. Amwell Amwell se trata de una two-sided platform que conecta pacientes con doctores. Pero aquí es donde se encuentra el dilema del huevo y la gallina, qué debe conseguir antes, a los pacientes o a los doctores. Ningún paciente querrá unirse si no hay doctores, y ningún doctor querrá unirse si no hay pacientes. Ante este dilema, Amwell encontró una solución, y era centrarse en las mutuas (health insurance companies). De esta manera, consiguen a un intermediario que ya posee numerosas personas de ambos grupos. Antes de Amwell el modelo de ingresos en este sector era el siguiente: Después de Amwell el modelo de ingresos del sector pretende ser: Benefits for the players a) Patients: No need to schedule an appointment in advance, immediacy, convenience, choice of doctor, privacy, seek a second opinion, access and manage their medical records. b) Doctors: Practice medicine without the traditional infrastructure (work at home, young docs, retired docs, a second shift). c) Insurers: e-visits cost less than in-person office visits, treat health issues earlier and reduce future costs, open the platform to non-members. d) Employers: employees more satisfied > increased retention; early discovery of health issues > increased productivity, costs reduction; at work visits. e) Non-members can pay out-of-pocket. Barriers to adoption a) Doctors must be payed for online communication with patients. b) Patients still perceive health care as seeing (not e-seeing) a doctor who performs a physical examination. c) Patients develop trust with a specific doctor, concerns about the doctors’ profile (inexperienced docs, retired docs), security and privacy risks. Reasons of success - Clear and explicit choices. - Reduced uncertainty. - Many streams of revenue (upfront and recurring revenues). - Revenue originated from insurers’ savings. - Proven technology ($70 million). - Benefits for all the players. - Win-win relations between the players. - Ability to address the barriers to adoption. Orange Read and Go Orange Read and Go es una especie de tablet que se testeó en Francia, era como un ebook que permitía descargarse los principales periódicos de Francia y no tener que comprarlos en papel. Defectos a) Uncertain customer demand (no tenian claro a quien decidirse) b) A change in customer behavior is required (nadie usaba ebook para leer diario) c) Need to subsidize the device (regalarles el dispositivo para que te compren suscripcion). d) Trial did not assess willingness to pay. (no probaron cuanto estaban dispuestos a pagar los clientes). e) Split of revenues between Orange and the newspapers. (division de ingresos, por lo que cobrarian poco) f) Control over customer relationships. g) Ultimately, Orange sell access to their network. h) Use Wi-Fi instead of Orange’s network. i) Unproven ability to attract new customers and retain existing customers.  j) Unclear target customer (print subscribers or frequent and occasional newsstand purchasers) and potential cannibalization. k) Drawbacks of the e-paper technology (they offset the benefits of e-ink). l) Orange stores not conceived to sell Read & Go. m) Full reliance on the content provided by newspapers. n) Incur additional costs (customer acquisition, network, management). o) Need to develop additional software. p) Inefficiency of e-paper advertising. q) Advertisements not animated and less interactive than banners. r) While Orange need newspapers, newspapers do not need Orange. s) Newspapers could save costs, but Orange could not capture a portion of this savings. t) Newspapers perception of Orange as a distributor and not a partner. u) Poor contribution of Read & Go to Orange’s revenue and profit. Razones de la fallida - Unclear choices (opciones, decisiones). - A lot of unknowns. - Untested willingness to pay and undetermined revenue generation mechanism. - Technology drawbacks. - Uncertain benefits for the players. - Asymmetric relations between the players. - Barriers to adoption (la gente era rehacia a adoptarlo) Success and failure Successful organizations 1. Set simple (todo el mundo los entiende), consistent (acorde con la mission vision y valores; debe ser razonable y consistente), and long-term goals (mirando siempre al futuro). Corto plazo es hoy o menos de un año. 2. Know their competitive landscape. There are 2 types of competitors: a. Direct: companies that solve the same problem and offer same solution. Ex: Rynair y Iberia. b. Indirect: companies that solve the same problem but with different solutions. Ex: Rynair y Renfe.  3. Assess (evaluar) their resources and capabilities. Capabilities son facilidades (skils). Resources can be: a. Material (tangible, se pueden tocar). b. Inmaterial (intangible, no se pueden tocar). c. People. 4. Implement their strategy effectively. Deben ser capaces de implementar su estrategia de manera efectiva, es decir, llevándola a cabo al 100%. Failure The failure can be caused by: a) A mistaken strategy. b) A mistake in the implementation of the formulated strategy. Vocabulario a) Mission Statement: A mission statement is a concise declaration that outlines the fundamental purpose of the organization, what it does, and for whom. It defines the company’s core objectives and reasons for existing. b) Vision: The vision describes the desired future state of the organization. It outlines long-term goals and serves as a guide for decision-making. A vision statement communicates where the company aspires to be in the future. c) Corporate Values: Corporate values are the principles and beliefs that guide a company’s behavior and decision-making. They define the ethical standards and the culture the organization seeks to foster. d) Goals: Goals are specific, measurable objectives that the organization aims to achieve over a defined period. These can be short-term (tactical) or long-term (strategic) and are aligned with the mission and vision. They also can be quantitative or qualitative. e) Resources: Resources refer to the tangible and intangible assets a company has at its disposal to achieve its goals. These include financial capital, human resources, technology, intellectual property, and more. f) Capabilities: Capabilities refer to the skills, knowledge, and processes that an organization uses to deploy (desplegar) its resources  effectively. They are what allow the company to perform activities that create value. g) Organization: This refers to the structure and design of the company, including its hierarchy, roles, responsibilities, and coordination mechanisms. It determines how people work together to achieve the firm’s goals. There are two ways of organization: a. Jerarquical: en forma de pirámide. b. Flot: En forma de circulo, más democrática. h) Management Systems: Management systems are the processes, policies, and tools used to guide and control the operations of the organization. These include performance management, quality control, and reporting mechanisms. They are used to control that the strategy is being implemented. i) Environment – General and Industry: The environment encompasses the external factors that affect the organization, including both: a. General environment (political, economic, social, and technological factors). PESTEL b. Industry-specific factors (market trends, competition, regulation). PORTER j) Short and Long Term: This refers to the time horizons for planning and decision-making. Short-term goals typically focus on immediate performance, while long-term goals focus on sustainability and future growth. k) Stakeholders: Stakeholders are individuals or groups that have an interest in the organization's activities and outcomes, including employees, customers, shareholders, suppliers, and the community. l) Industry’s Key Success Factors (KSF): Key success factors are the essential elements or conditions that a company must meet or excel in to succeed in its industry. These can include innovation, cost efficiency, quality, customer satisfaction, and speed to market. m) Sustainable Competitive Advantage: A sustainable competitive advantage is an advantage over competitors that is enduring (duradero) and difficult to replicate. It allows a company to maintain superior performance over the long term.  n) Industry: This refers to the particular sector in which the company operates. The analysis of industry factors helps in understanding competition, customer needs, and growth opportunities. o) Resource Acquisition: This is the process of securing (asegurarte que los tienes) the necessary resources (human, financial, technological, etc.) required to operate and grow the business. p) Resource Allocation: Resource allocation is how the organization distributes its resources to various functions, departments, or initiatives to achieve its goals efficiently. q) Anticipate Changes in Environment and Rivals' Moves: This involves forecasting and preparing for shifts in the market, regulations, technology, and competitive landscape to remain agile and responsive. r) Analyze, Plan, Execute, Control: This is the cycle of strategic management. Analyzing the environment and internal capabilities, planning strategy, executing the plan, and monitoring performance to adjust as necessary. s) Formulate and Implement: This refers to the process of developing strategies (formulation) and then putting them into action (implementation) within the organization to achieve the intended goals. t) Strategy a. Corporate: we choose the industry or industries where we will compete. b. Competitive: differentiate of the others or choose a low-cost company. c. Internationalization: exporting goods or investing in other countries. Choice of industry - Choose the most profitable industry (attractiveness in terms of profitability).  - Choose the industry with the best fit in terms of resources and capabilities, and use our resources and capabilities to establish a unique positioning (resource-based view of the firm). SWOT analysis Strengths: Internal, resources and capabilities. Weaknesses: Internal, resources and capabilities. Opportunities: Changes in industry and general environment. Threats: Changes in industry and general environment. Environment General environment and industry environment. a) Can we influence the environment? b) Internal and external stakeholders c) SWOT analysis: current and potential Changes in general and industry environments - General = PESTEL; industry = PORTER, Changes in (PESTEL): a) Politics (P) b) Economics (E) c) Society (S) d) Technology (T) e) Environment (E) f) Laws (L) Positive (opportunity) or negative (threat) influence on the firm and the industry. Industry Criterion to assess attractiveness: profitability, not sales. - Financial information (is the industry attractive?). Attractive in terms of profits, if the company has good numbers.  - Porter (why?). How the market is organized and structured. - Entry or exit decisions. Depending on the financial and porter. - Unit of analysis: product or division, not legal entity. Analizar unidades de negocio o productos, nunca la empresa entera. Attractive industry: - You are one of the competitors in the central bubble. - There is not rivalry competitors, because there is price agreement (blue ocean) - There is not bargaining power of suppliers and buyers , as there are millions. - Not substitute products. - Not indirect competitors. - Barriers to enter are so high that caused a low threat to enter. Muchas barreras de entrada que benefician a los que están dentro, pero perjudica a los de fuera. Non attractive industry: - There is a lot of rivalry (sharks in a red ocean=price wars) - Lot of bargaining power of suppliers and buyers, as there is only one. - Lots of substitute products. - Barriers to enter are so low. There are red oceans and blue oceans: - Situación ideal: pocos competidores (blue ocean). Its is called blue ocean because of a Switzerland metafora a profesor did. Cyrcle du soleil create a new market space, and it was the only player in this market space (so there is no competition = high prices and make a lot of money). En un mercado sin competidores, los 4 factores no afectan, ya que la industria es atractiva al concentrar todo el mercado en una empresa (monopolio). Ex: Nintendo target non-gamers, people who had never played. They create a new market of non-gamers where Nintendo is the only player.  - Situación a evitar (red ocean): muchos competidores (price wars, uncut margins paper thin (margenes muy pequeños y no ganan dinero). It is called red ocean because they attack each other as sharks and a lot of bloods and the ocean comes red. Ex: Sony and Microsoft target demanding gamers and compete on price and technology (features and functions), so they are in red ocean. Otherwise, Nintendo is blue ocean. 1) Microsoft and Sony focused on technology, while Nintendo focused on fun. 2) Sony and Microsoft studied gamers while Nintendo studied non-gamers. 3) Nintendo failed when they focus was on competing with Sony and Microsoft and, they succeded when they focus on creating a new market. 4) Focus on non-customers to understand why they do not buy (eliminate features that overwhealm them and create the features that are appealing to them). 5) Is there a market gap for Nintendo, with Apple and Samsung dominating mobiles and Sony (PlayStation) and Microsoft (XBox) dominating consoles? Solution: Subsidize consoles to sell games with the NintendoSwitch. An example is the Nespresso strategy. They subsidize the machine or sell it cheaper in order to sell more capsulas (arrasaras comprandolas). Porter PORTER sirve para saber, una vez analizados cada uno de los cuadraditos, si la industria es atractiva o no.  § Rivalry among competitors Rivalry among competitors representa cuántos competidores son en el mercado y si dicho mercado es rentable o no. Rivalry among competitors and, hence, industry’s profitability depends on: a) Number and size of competitors (oligopoly vs. perfect competition). For a company is better to have few competitors (oligopoly), because if there is perfect competition, margins are so low and it is not profitable. a. Monopoly: 1 competitor. High prices, not interaction with other players. Not interested. b. Oligopoly: 2 to 15 competitors. Interested. c. Perfect competition: millions of players in an industry doing the same product at the same price. Not interested. b) Industry growth and product life cycle. c) Type of product (differentiated vs. commodity). Según el tipo de producto que ofrezca cada competidor, habrá más o menos competencia entre ellos. a. Differentiated means that a product is different, it has some of the following elements that make it different (brand, design, tech, performance). Ex: Smartphones- Iphone, Samsung, Huawei... Menos competencia. b. Commodity means a product that is completely undifferentiated, it means that everybody follow the same patron. Más competencia. d) Fixed costs and use of capacity. When there are high fixed cost, it may lead to a war prices as having lot of sales is good, as you can use your 100% of capacity and take profit of scale economies. Cuando los costes fijos son muy altos, aumenta la competividad ya que las empresas se meten en una price war para amortizar dicho coste fijo. § Bargaining power of customers or buyers Bargaining power of customers depends on: a) Number and size of customers. When more customers better, as it gives the company more power. When there are few customers, they have lot of bargaining power. Also they have to be small, if there is one big it is bad.  b) Are they grouped? Consumers grouped can have more power than if they are not grouped. c) Type of product (differentiated vs. commodity). The same as before. Depending on this the customers will have more or less loyalty. With differenciated products , customers are more loyal than with commodity. When clients buy differentiated products, there is loyalty, there are high switching costs and they have no bargaining power. d) Ability of customers to upstream vertically integrate. e) Customers’ loyalty and switching costs. The loyalty is key to maintain customers in one company, also switching costs are important. These are the costs of switching to one product to another (coste de cambiar de marca). Ex. Gasoil is the same in every gas station, but for example a mobile phone not. And if you have Apple change to Android may have a cost. “Powerful” customers will “set” the selling prices from the industry. Ex: La Fageda. They purchase raw materials (milk) to suppliers and then they sell to supermercado as Mercadona). When clients buy differentiated products, there is loyalty, there are high switching costs and they have no bargaining power. In case of bargaining power of buyers or customers interesa differenciated para que los clientes no te dejen de comprar. § Bargaining power of suppliers Bargaining power of suppliers depends on: - Number of and size of suppliers. When more suppliers better, as companies will have more power. If there are few of suppliers, they will have lot of bargaining power and will be able to decide. - Are they grouped? Same as customers. - Type of product (differentiated vs. commodity). If the product of the supplier is a commodity, it is better as it is easier to find a new one. If it is differentiated is more complicated. - Ability of suppliers to downstream vertically integrate.  - Industry’s switching costs. Cost of changing the supplier. High cost of change is bad. “Powerful” suppliers will “set” the selling prices to the industry. En este punto, a ti como empresa te interesa que haya pocos “switching costs” y una baja lealtad, ya que te ayudará a tener más poder, ya que tendrás más posibilidades de elección. When we buy differentiated products, there is loyalty, there are high switching costs and they have no bargaining power. In case of bargaining power of suppliers no interesa, porque interesa producto commodity, con less loyalty y low switching cost, ya que tu eres el que compras y asi puedes cambiarte de proveedor cuando quieras. § Threat of potential entrants Barriers deter or delay the entry: - Huge investment. When it is required a lot of investment to entry the market this is a high barrier to enter. - Scale economies (minimum size of plant). When the companies inside the market have scale economies (take benefit of selling a lot) this is difficult to equalize for outsiders that want to entry. - Cost advantages. When a company is stablished and has cost advantages it will be difficult to the outsiders to entry. Ex. Ryanair has cost advantage and to entry a new low cost airline will be difficult. - Product differentiation. If there is differentiation it will be harder to entry. - Consumers’ loyalty and switching costs. For the outsiders is better that there is not consumer loyalty or switching costs, for the insider he want it as it is an advantage to him. - Governmental regulations. If there are rules or barriers of the government that difficult the entrance is better (licenses…). - Access to raw materials and access to distribution channels. If the access to these things is difficult, there is a barrier to entry, if not is easy to entry.  - Resources or capabilities required. o Resources are the tangible and intangible assets that a company owns and can use to produce goods or services. They are the basic building blocks that organizations use to implement strategies and achieve competitive advantage. o Capabilities refer to the company’s ability to effectively utilize its resources to achieve specific objectives. They are the skills and competencies that enable an organization to coordinate resources and put them into productive use. - History of aggressive responses by incumbent companies. If when an outsider wants to entry and the insiders agree to stablish strategies to make difficult to the outsider to entry. Ex. Companies agree to reduce prices to make to the outsider a non-profitable entry. - First mover advantages (experience, costs, consumer loyalty…). § Threat of substitute products If there is a lot of substitute products (direct or indirect) it is bad for the companies inside the market. If there is not or only a few, it is perfect. Vertical integration Vertical integration is the way companies reduce the risk of depending on clients (si son minoristas) and suppliers as they integrate these stages inside their company. Ex: Inditex. a) Upstream and downstream vertical integration (Inditex): Fabricas tanto las materias primas como el producto y gestionas la venta directa al consumidor. b) Downstream: además de fabricar el producto, vendes directamente al consumidor. c) Upstream: además de fabricar el produtco, haces tú mismo los materiales que necesitas (proveerte de raw materials). An example of NO vertical integration is Levis. Other companies produced the raw materials, they manufacture the jeans and then they sell the jeans to another companies (Ex: Corte Inglés), for sell it to the final customers. Business models The way a company creates value for its customers and captures a portion of this value through the price mechanism. Cuanto más valor crees, el consumidor estará dispuesto a pagar más, y por lo tanto podrás poner un precio más alto. The way a company operates. Value creation Willingness to pay: subjective, it is perceived by the satisfaction and owning or using a product. - Willingness to pay: 1,000 € - Price (PVP): 900 € - Cost (cost of manufacturing): 100 € - Value created (willingness to pay – cost): 1,000 € - 100 € = 900 € - Consumer surplus (willingness – price): 1,000 € - 900 € = 100 € - Firm surplus (price – cost): 900 € - 100 € = 800 € Business model: a value proposition (product or service) + a targeted customer (you cannot targeted the entire market, you have to target a part of the market) + a value chain to deliver the product or provide the service to the targeted customer. Value proposition: What do you offer to your customer in exchange of the money. Choices Set of choices: strategic decisions that companies have to make. Set of consequences derived from the choices: consequences derived from the strategic decision. Consecuencias de esas decisiones tomadas. Virtuous cycles: all of this is a virtuous cycle, as consequences lead to (llevan a) choices and vice versa. Successful firms possess business models with clear and explicit choices in different business dimensions that reinforce one another and create virtuous cycles. They have made choices about their customers, their products, or their value chain, and trade-offs about customers not targeted, products not offered, or activities not performed. 3 ingredients: 1. Product or service (value proposition): offer exchanges money. 2. Targeted costumer. 3. Value chain to deliver the product. Dell and AUSA Resumen de AUSA AUSA es una empresa familiar fundada en 1956 que se dedica al diseño, fabricación y distribución de equipos para la construcción, incluyendo dumpers, carretillas elevadoras y vehículos multiusos. Opera en mercados de nicho, donde las grandes empresas no suelen competir. Aunque exporta el 40% de sus ventas a 70 países, sus volúmenes de producción son bajos, lo que le permite especializarse en productos con altos márgenes. AUSA diseña y ensambla sus productos internamente, utilizando componentes estándar para mantener flexibilidad y costos bajos. La empresa adopta filosofías de producción "just in time" y "lean production" para satisfacer las demandas específicas de sus clientes. AUSA se destaca por una cultura organizacional enfocada en la innovación, la relación cercana con sus clientes y el bienestar de sus empleados, con programas de desarrollo profesional y planes de compensación. La empresa invierte el 5% de sus ventas en investigación y desarrollo, y lanza nuevos productos regularmente para mantenerse competitiva. Resumen de Dell Computer Corporation Dell Computer Corporation, fundada en 1984 por Michael Dell, ha experimentado un rápido crecimiento en los años 90, destacándose por su modelo de venta directa al cliente. Dell ofrece computadoras personalizadas que se fabrican bajo pedido, lo que le permite minimizar inventarios y adaptarse rápidamente a los cambios tecnológicos. El enfoque de Dell en la producción bajo demanda reduce el costo de almacenamiento y le otorga una ventaja competitiva frente a empresas como Compaq e IBM, que producen en base a previsiones de ventas. Dell también es pionera en ofrecer soporte técnico gratuito y en reducir la cantidad de proveedores para garantizar la calidad y mejorar los tiempos de entrega. Gracias a su modelo eficiente, Dell puede introducir nuevos productos en el mercado mucho más rápido que sus competidores, aprovechando la reducción en el costo de los componentes debido a los avances tecnológicos. AUSA strategy DELL strategy Clusters: a set of companies competing in the same industry with headquarters near to all. They compete, but also cooperate. Movistar and Pepephone Movistar Pepephone Vision [Ejemplos de vision del ppt] Over exaggerated. 1 sentence. Statement. Positive message. Not precise. A vision statement should serve as your company’s guiding light. A vision is aspiration. The vision must be written by the visionary of the company (the CEO, owner…). What that existence will eventually look like. Mission The mission is the why it exists. Es para los empleados, y deberían ser ellos los que la escribieran. The mission is actionable, what would you do to reach the aspiration. Core values Son los principales valores que tiene una empresa, las principales creencias. Organization long-term believes and principles that guide the employee behavior. Disruptive Innovation Disruptive innovation is any break through, a radical innovation that destroys an industry. Ex: digital photography destroys the traditional photography. Ex 2: Before there was music in IPod or DVDs, now through Spotify. Digitalization was a breakthrough as far as music. Disruptive innovation is selling not so good products, targeting people that are not quite demanding. It has a connexion with blue ocean. - Offer more performance on a lower price. Al innovar, ofreces más posibilidades en el mercado, y que acaba siendo más barato de precio. - There are 2 types of disruptive innovation: o Incremental sustaining innovation. When you make improvements in existing products. Ex: Apple. o Disruptive sustaining innovation. Value proposition that creates new markets that didn’t exist before we created. - Disruptive innovation could be:  o Low-end. Existing products are too good and overpriced (customers are over-served). So, you target the less demanding customers in the low end of the market (the over-served customers). Este tipo surge cuando el producto o servicio existente es demasiado caro o "bueno en exceso" para lo que algunas personas realmente necesitan. Entonces, creas una versión más barata y simple dirigida a estos clientes menos exigentes. Ejemplo: Las primeras versiones de teléfonos Android baratos. No eran tan avanzados como un iPhone, pero eran suficientes para quienes no querían gastar tanto. o New Market. The characteristics of existing products limit the number of potential consumers (compete against non- consumption). So, you target non-consumers. Esto ocurre cuando el producto actual no satisface a todos porque tiene características que limitan su uso para algunas personas. Aquí, te diriges a aquellos que no consumen el producto en absoluto y les ofreces algo que sí puedan usar. Ejemplo: Cuando las primeras cámaras digitales aparecieron, se dirigieron a personas que no usaban cámaras tradicionales porque eran complicadas o caras. Disruptive innovation initially under-perform the existing products (deliver less than the standard, but are cheaper, simpler, smaller, and more convenient to use). Patagonia destina un 1% de sus ingresos a causas a favor del medioambiente. Esto, les frenaba el crecimiento por el coste que tienen en comparación con otras emrpesas. High prices.