How does your company respond when a new product or service offered by a competitor becomes available that has the potential of destroying your business model? You can accept your fate and wind down or merge your business with another business. We recommend you study the marketplace and the impact these products or services will have on your business. How long do you have before the new product or service will substantially affect your business? If the time is long, (1 to 3 yrs), then we recommend you develop products or services that compete directly with the new product or service; (D) If the time is short, (less than 1 yr), then we recommend you quickly develop hybrid products or services (i.e. products or services that are similar to your existing products and services but have new features that offer some benefits of the new product or service offered by the competitor and may address some drawbacks not addressed by the competitor. An example of using hybrids to respond to disruptive technology is General Motors’ development of the Volt in response to the Toyota Prius. The Volt is a new product that competes directly with the Prius that includes a large battery that allows it to be driven sole with electricity for short trips and includes a gas motor that allows it to be driven for longer trips or when charging stations are not available.
Another response is to develop your own disruptive technology to the new product or service. An example of a disruptive technology to Toyota’s Prius would be Honda’s fuel cell technology. Unfortunately, this is very expensive
We recommend you constantly look for disruptive technology products and services offered by competitors. If a disruptive technology product or service appears in the market, then determine how long you have before the new product or service commercially impacts your business. Then develop a hybrid response.