My friend George just purchased a Tesla from the money he made on buying Tesla shares at $30. He talks about how Tesla is disruptive innovator, which lead me to consider, is it really?
Tom Bartman, is an associate with Clay Christensen’s research group at Harvard Business School (Clay is the Kim B. Clark Professor of Business Administration at the Harvard Business School) . In a recent report posted in the Harvard Business Review, they apply a framework to understand whether a new company, like Tesla, will disrupt an old one, like GM, Ford, Chrysler or Toyota.
The framework asks 5 questions:
- Does the product target over-served customers (i.e., with better value for money) or create a new market?
- Does the disruptor have incentives to enter higher performance segments while incumbents retreat?
- Does it have a trajectory for fast, across the board, performance improvements?
- Does it create a new value network (e.g., sales channel)?
- Does it disrupt ALL incumbents?
The answers to these questions are: no, no, yes, yes and no. That leads Bartman to conclude that Tesla’s products are likely sustaining rather than disruptive. I would have thought otherwise, but I'm not a professor at Harvard. I believe the debate will continue if companies like Tesla are disruptive in nature or not.
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