This Chart Plots Which Businesses are Most Likely to Be Disrupted

There are many pillars of good business that rarely change — think customer service, cash flow and capital, etc. However many other aspects of business that are constantly evolving, leaving those who struggle to adapt left behind. In recent years these waves of innovation, either driven by a single company or by other factors, have been referred to as “disruption.” While this phenomenon can happen to just about any company, there are some sectors that are more susceptible than others.

Created by Accenture and published by Harvard Business Review, the chart above sought to measure both the level of disruption certain businesses have already been experiencing and how likely they were to be disrupted in the future. As the researchers explain, “For the former, we examined the presence and market penetration of disruptor companies; we also considered incumbents’ financial performance. For the latter, we measured incumbents’ operational efficiency, commitment to innovation, and defenses against attack.” The chart also looks at what they call “states of disruption” — these being viability, volatility, vulnerability, and durability.

Starting in the top, left corner with “viability,” this is where researchers chose to place industries that have already experienced significant and in some cases ongoing disruption. Because of this, businesses in this quadrants have been forced to constantly adapt and rethink their business models overall. Meanwhile, under the “volatility” banner, you’ll find businesses that have not only seen disruption already but are immediately expected to see more due to lowered barriers of entry.

As for those in the “vulnerability” category, these are industries where the barriers to entry are still high… for now. Despite that advantage, these businesses still need to stay up on the latest technologies in order to stay competitive in their own fields. Finally those under “durability” tend to be well-established brands selling items that don’t seem to be fading. That said that doesn’t mean they’re completely free from changes in demand. For example some brands in the alcoholic beverage sector featured in this quadrant have had to make adjustments to their business in order to take on the rise of craft beer.

Although this chart includes a limited number of industries, the methodology behind it is quite interesting. The four categories of disruption that they’ve proposed — viability, volatility, vulnerability, and durability — are something business owners should definitely consider before starting a new venture or when plotting their business’s future. Furthermore this serves as another reminder that entrepreneurs should always be thinking of new ideas and be ready to adapt to a changing world.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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