Disruptive Product Innovation Strategy: The Case of Portable Digital Music Player

Disruptive Product Innovation Strategy: The Case of Portable Digital Music Player

Nazrul Islam (Aberystwyth University, UK & Middlesex University, UK) and Sercan Ozcan (Aberystwyth University, UK)
DOI: 10.4018/978-1-4666-0134-5.ch003

Abstract

In today’s business world, many companies are in search of an innovative strategy to move on to a market where there is as yet no competition. In view of that, many academics and managers are trying to find a systematic framework for a strategic innovative business model. One of the examples of a systematic framework is Blue Ocean Strategy (BOS), which provides various tools for managers to find a gap in an existing market or to create a new market where there is no competition. This chapter uses Apple’s iPod product chain to illustrate how BOS tools can be used to create an innovative strategy for two reasons. Firstly, there are few practical examples that illustrate the BOS, as it is a recent business model and so this chapter can be a useful illustration for those audiences who are interested in strategic innovations focusing on disruption. Secondly, the iPod is a great example of an innovative product where the manufacturer benefits from low competition, high market share, and high profit return.
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In 1979, Sony released the first portable music player called the Walkman, which was a cassette player that replaced the bulky music players known as the boom box (Sony 2011). When the first Walkman was introduced, many people claimed it would not sell as it did not have a recording function. However, consumers took to playing their music through a portable device in the 80′s. The term Walkman even entered English usage as a portable cassette player. It was not long after that, five years later in 1984, the first portable CD player was introduced by Sony and the portable music player market was dominated by Sony for a long time (Sony 2011). However, the portable music player market started losing its influence over consumers after the mp3 music format became popular (Lasser et al 2006). Consumers started using various online sites and P2P programs illegally to download their favourite songs in mp3 format. Many manufacturers introduced mp3 players but people were still downloading mp3 songs in an illegal way (through P2P programs such as Napster) and the mp3 devices could not store a great number of songs.

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