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Three Disciplines for the Age of 'Great Disruption'

Don't think of this dour economic period as a temporary slowdown; rather it's a continuation and confirmation of market changes that have been underway for awhile now. Innovation expert Scott Anthony calls this the time of Great Disruption.

"In 2009, managers will realize that they are no longer dealing with a crisis; they are dealing with a condition," Anthony writes in a perceptive blog entry on Harvard Business Publishing. "In the Great Disruption, companies simply can't anticipate that today's competitive advantage will last for more than a few years."

Companies need to master three disciplines of innovation to be leaders in this environment, he continues. They need the ability to:

  1. Develop winning ideas in creative, cheap ways.
  2. Use "precise" data to grow the core business while also developing intuition and judgment to pursue new-growth enterprises.
  3. Develop value products for low-end segments.
I'm a big Anthony fan, but I'm not so sure about the wisdom of #3. I'm inclined to believe companies should not muck about in segments for which they don't have a passion.

Instead, I prefer the approach offered by Harvard Business School's John Quelch: Tailor what you already produce to the new realities of the market. Writing in Marketing Your Way Through a Recession, Quelch writes:

"Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough times favor multi-purpose goods over specialized products, and weaker items in product lines should be pruned. In grocery-products categories, good-quality own-brands gain at the expense of national brands. Industrial customers prefer to see products and services unbundled and priced separately. Gimmicks are out; reliability, durability, safety, and performance are in. New products, especially those that address the new consumer reality and thereby put pressure on competitors, should still be introduced, but advertising should stress superior price performance, not corporate image."
How will the 'Great Disruption' change what you produce and consume?
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