So, when we think about this process, we eventually
want to think about the renewal of this process through a new disruption.
So once we reach that dominant design and
the market matures, this actually creates the seeds for future disruption to occur.
That disruption might be exogenous, it might be driven by a technology change,
what we sometimes refer to as technology push.
It could also be driven by the market itself,
as consumer preferences shift, what we often call demand pull.
The same S-curve that we talk about in terms of cumulative revenue,
we can also think about in terms of technology performance.
And it's often the case that there are some potentially,
even physical limit to how well the technology can improve.
So let's turn our attention now to again to the automobile example.
We are in the midst of another disruption in the industry driven by electric
vehicles and autonomous vehicles.
This after nearly 100 years of stability within the industry.
Why is this occurring now?
Well we can speculate.
One is underlying advances in the technology,
the technology push concept here.
Some of it driven by digital transformation itself,
making these technologies more viable.
Some of it also is being driven by consumer demand.
For example, consumers demanding low emissions vehicles,
leading to the prevalence of electric vehicles in the market.
We see, obviously, a lot of incumbent firms competing and
offering vehicles along these lines.
But we also see new entrants, like Tesla, making significant inroads.
In fact, by 2017,
Tesla actually had a higher market capitalization than General Motors.
Meaning basically, that the market thinks that Tesla will be a larger,
more significant player in the future.
We see companies like Volvo,
an established player in the market, pledging to go all electric by 2020.
So once again, we don't know how this will exactly play off, but
we have a pretty good idea.
We'll probably see entry into the industry.
We'll probably see competing designs here in terms of what the dominant design
technology might look like.
And we'll probably eventually see a shakeout and a coalescing around a common
form factor for the industry in the somewhat near future.
So again, diving into the details of the competitive lifecycle,
gives us a greater understanding of how competition unfolds
when we have these disruptions taking place.
