NAME: Nikitha m

SRN no: R17mb156

Assignment questions:

Q1. What is disruptive innovation? How do digital technologies disrupt the scholarly journal
publishing industry?

GENESIS OF DISRUPTIVE INNOVATION:

In a December 2015 article for the Harvard Business Review, Christensen and co-authors
Michael Raynor and Rory McDonald set out to clear up confusion over what disruptive innovation is
– and what it isn’t. The theory goes that a smaller company with fewer resources can unseat an
established, successful business by targeting segments of the market that have been neglected by
the incumbent, typically because it is focusing on more profitable areas.

As the larger business concentrates on improving products and services for its most
demanding customers, the small company is gaining a foothold at the bottom end of the market, or
tapping a new market the incumbent had failed to notice. This type of start-up usually enters the
market with new or innovative technologies that it uses to deliver products or services better suited
to the incumbent’s overlooked customers – at a lower price. Then it moves steadily upmarket until it
is delivering the performance that the established business’s mainstream customers expect, while
keeping intact the advantages that drove its early success.

Disruption happens when the incumbent’s mainstream customers start taking up the start-
up’s products or services in volume.

With new digital publishing options, the door is now open for authors to publish a book
without the help and expense of a traditional publishing house. The disrup¬tive technology of digital
publishing has changed many aspects of book publishing: (1) how a book is published and by whom;
(2) how many books are printed and ware¬housed; (3) how books are marketed; (4) how books are
distributed; and (5) the costs of book publishing.

The book publishing industry is experiencing a shift in the current way of doing business. The
traditional printed book is no longer the only product or delivery choice for today’s mobile, tech
savvy audience. As a result, publish¬ers are responding by investing in digital technologies to provide
more options to deliver a wide variety of choice in e-book pricing and delivery options, such as
digital subscriptions, e-lending plans, e-book rentals and Print-on-Demand (POD) opportunities
(Association of American Publishers, 2015).
 The latest evolution of the industry’s business and distribution model is in direct response to
disruptive technology – the industry has adopted digital technol¬ogy to stay relevant. This digital
conversion has been interpreted as being a disruption to the industry yet it equally has been
considered a benefit by creating new revenue streams that are more universally applicable,
replacing obsolete business models. Rather than publish¬ers monetizing only content, they are also
focusing on monetizing their audience, behaviours, data and brand revenue driver. The onset
of digital technology has disrupted the chain strategy and processes universally used in the book
industry. Internal processes and managerial focus have had to shift in response to the new industry
structure and consumer behaviour. In the evolving digital publish¬ing process, the publisher and the
wholesaler/bookstore have less of a centralized role than has been the case in the past. Both the
publisher and the author can deliver the e-book directly to the e-bookseller, bypassing the agent and
traditional bookstore. The power has shifted to the author, who can now do more independent of
the publisher.

Q2. Based on the classification of disruptive innovations provided by Markides, analyze the type of
disruptive innovations happening in the publishing industry.

The concept of disruptive innovation has gained considerable currency among practitioners
despite widespread misunderstanding of its core principles. Similarly, foundational research on
disruption has elicited frequent citation and vibrant debate in academic circles, but subsequent
empirical research has rarely engaged with its key theoretical arguments. This inconsistent reception
warrants a thoughtful evaluation of research on disruptive innovation within management and
strategy. We trace the theory’s intellectual history, noting how its core principles have been clarified
by anomaly‐seeking research.

Disruptive innovations happening in the publishing industry based on the classification of disruptive
innovations provided by Markides are as under:

1. A PAPERBACK REVOLUTION

The American Paperback Revolution began in 1939 when Robert F. DeGraff founded Pocket Books.
DeGraff's books were small (4-1/4 by 6-1/2 inches), printed on cheap paper, and bound in semi-stiff
covers. They sold for twenty-five cents. In order to expand their market, Pocket sold the books not
only through bookstores but also in drugstores, newsstands, and railroad stations. Two other
companies quickly followed Pocket's lead. Penguin Books, which had been operating in England
since 1935, opened a U.S. branch in 1939. Two years later, magazine publisher Joseph Meyers began
Avon Pocket-sized Books. The industry stalled during the Second World War, when paper supplies
were strictly rationed, but after the war at least two dozen more firms raced into the market,
including New American Library, Bantam, Fawcett, Popular Library, and Dell

2. LOWER COSTS

Paperbacks: The low cover price of the new paperback format--twenty-five cents for a paperback
compared to between two dollars and three dollars for a typical hardback--made books more
affordable for the average reader, but they slashed the per-unit revenue for publishers by almost
90%
ePublishing: While traditional publishers are fighting to keep their prices from being slashed a full
90% (which would be pricing an eBook around $2.50 vs. a $25 hardback), they've been knocked
down quite a lot—and, there are plenty of $2.99 and even $.99 options out there competing against
them. It's even worse for journalism, where ad revenues online are a mere fraction of those of print.

3. WIDER DISTRIBUTION

Paperbacks: The distribution of paperbacks, which were sold not only in books stores but also in
convenient locations such as drugstores and train stations, caused books to be more widely available
than ever before.

ePublishing: Now, you don't even have to find a retail establishment. You can download a book from
your bed, on a train, or while driving down the road in your car, and you can catch up on the latest
news and read your favorite long-form journalism anytime, anywhere, too.

4. WAILING, LAMENTATION, GNASHING OF TEETH

Paperbacks: Publishers declared it was the end of an era and they were all going broke. Authors
echoed the sentiment and, except for a early adopters who embraced the new genre, most "serious
authors" rejected paperbacks as both cheapening and an assault on their income.

5. AND THE SKY DID NOT FALL

Paperbacks: The book publishing industry got along just fine once they factored the economics and
distribution requirements of paperback publishing into their business models. Authors learned to
how to value and sell their paperback rights, and they became a major chip in their contract
negotiations with publishers.

ePublishing: We will see. But it seems likely that the sky will not fall, either.

6. A BOON TO AUTHORS

In the end, what appeared at first to be a major threat to authors' livelihood turned out to
be an economic boon? We'll use Raymond Chandler, the acclaimed Los Angeles detective novelist
and creator of private eye Philip Marlowe, as an example.

At the start of the Paperback Revolution, authors had few options for making money from
their books beyond traditional hardback royalties, for the sale of subsidiary rights was not a major
factor.

Before paperbacks, the reprint market was limited to a few firms like Grosset & Dunlap, who
produced cheap hardback reprints in small print runs--and paid even smaller royalties. In 1940,
Raymond Chandler made a whopping $200 from Grosset & Dunlap's $1 reprint edition of The Big
Sleep, his first novel, which they produced from the same printing plates used by Knopf, the original
publishers.

Q3. Drawing from the analysis of assignment Q2, which category of disruptive innovation does
Medknow belong to? Do you think the model is sustainable?
 A disruptive technology is something that replaces an existing technology – below are a few
examples of disruptive technologies that are set to become more prevalent in society.

Medknow Publications created a profitable e-commerce model out of a struggling

conventional business, namely, the learned society journal publishing. It also provides a useful
ground to discuss the challenges faced by the conventional scholarly journal publishing models, the
current crisis in scholarly journal publishing and how Medknow, a disruptive business model
innovation, would address these issues. Besides, the case illustrates how Medknow created a
sustainable “for-profit” alternative to the prevailing not-for-profit models of open access publishing.
The disruptive innovation that Medknow belongs to is:

3D Printing Technology

This technology is slowly but surely edging out traditional printing and manufacturing
techniques. It’s now much easier for an individual to manufacture their own products and devices.
However, there are some people who think that this practice might be a fad. It’ll be interesting to
see if it takes off.

Definitely I think this model is sustainable in this case because, businesses are now
developing technologies that will prioritise data based on its value to the firm. This means that while
some applications will get pushed back, the end result is a faster and more efficient end-user
experience.