BIG BANG DISRUPTION Strategy in the Age of

BIG BANG DISRUPTION Strategy in the Age of Devastating Innovation Pieter Paul van Oerle

PINBALL NOT ONLY SURVIVED THE EARLY PERIOD OF ARCADE VIDEO GAMES, IT THRIVED… Pinball Units Sold (Hundreds of Thousands Per Year) 1. 5 1. 0 0. 5 0 1989 1992 Copyright © 2014 Accenture All rights reserved.

…BUT THEN ALONG CAME A BIG BANG DISRUPTOR… Playstation™ Units Sold Pinball Units Sold (Millions Per Year) (Hundreds of Thousands Per Year) 1. 5 30 1. 0 20 0. 5 10 0 1989 Copyright © 2014 Accenture All rights reserved. 1992 1995 1998 2001 2004 0

…AND ANOTHER WIPED OUT NEWSPAPERS 70 Print Newspapers Online Ad Revenue, $US, billions 60

BIG BANG DISRUPTORS ARE EVERYWHERE… Industry Maps & dedicated GPS devices Taxi services Hospitality – Hotels PCs and Laptops Financial Services – Payments Retail Education Travel agencies Yellow pages Film rentals Low-end digital cameras Copyright © 2014 Accenture All rights reserved. Big Bang Disruptor

Market Penetration THE SHAPE OF BIG BANG DISRUPTION TRADITIONAL TECHNOLOGY ADOPTION CURVE Time Copyright

THE SHAPE OF BIG BANG DISRUPTION Market Penetration BIG BANG DISRUPTION TRADITIONAL TECHNOLOGY ADOPTION

Market Penetration THREE KEY CHARACTERISTICS OF BIG BANG DISRUPTION Unconstrained Growth the declining cost of information BIG BANG DISRUPTION Undisciplined Strategy the declining cost of creation TRADITIONAL TECHNOLOGY ADOPTION CURVE Unencumbered Development the declining cost of experimentation Time Copyright © 2014 Accenture All rights reserved.

UNDISCIPLINED STRATEGY YOU CAN’T BEAT IT Standalone GPS Smartphone Navigation App Price $100 - $300 Free Differentiation Intermittent update Real time updates of data and software Customer Intimacy Little to no real time context Integrated with phone contacts and search Copyright © 2014 Accenture All rights reserved.

UNCONSTRAINED GROWTH YOU CAN’T STOP IT Google maps mobile installs Tom cumulative unit sales Garmin cumulative unit sales 200 Estimated users (millions) 180 160 140 120 100 80 60 40 20 0 2 4 6 8 10 12 Years since debut of first auto-GPS offering 14

OLD CURVE OF MARKET ADOPTION OF INNOVATION EVERETT ROGERS’S MARKET SEGMENTS Innovators (2. 5%) Early Majority Adopters (13. 5%) (34%) Copyright © 2014 Accenture All rights reserved. Late Majority Laggards (34%) (16%)

NEW CURVE OF MARKET ADOPTION OF INNOVATION BIG-BANG MARKET SEGMENTS Trial Users Everybody Else THE SHARK FIN Innovators Early (2. 5%) Adopters (13. 5%) Early Majority (34%) Copyright © 2014 Accenture All rights reserved. Late Majority (34%) Laggards (14%)

FOUR STAGES OF BIG BANG DISRUPTION… FOUR STRATEGIC IMPERATIVES Asset Freedom Scaling Management End Game Mastery Foresight The Singularity Copyright © 2014 Accenture All rights reserved. The Big Bang The Big Crunch Entropy

BIG BANG DISRUPTION ACCELERATES DIGITAL ECOSYSTEMS Core Competencies in The Digital Ecosystem Makers Integrators INVENTORS DESIGNERS Thinkers PRODUCERS Doers Copyright © 2014 Accenture All rights reserved. Internet of Everything ASSEMBLERS

UPCOMING BIG BANGS SOME EXAMPLES BY INDUSTRY HEALTH CARE Biometric sensors demystify the shamanistic myth of medicine PROFESSIONAL SERVICES DIY services, Cloud and SAAS Solutions RETAIL The disruptive force of the sharing economy MANUFACTURING The “Internet of Things” drives the supply chain from the bottom Copyright © 2014 Accenture All rights reserved. GOVERNMENT UTILITIES CONSUMER PRODUCTS PHARMACEUTICALS ENERGY RETAIL BANKING Market pricing for public services Market-led marketing takes over Practical fuel cells…launched on Kickstarter EDUCATION The virtual ivory tower revolutionizes learning Portable electricity networks mirror wireless communications Bespoke drugs based on your DNA The end of cash FINANCE Money becomes just another form of information

Social Security General Treasury: Contracting a Housekeeper Copyright © 2015 Accenture All rights reserved.

Fjord “Transforming ugly data into a beautiful service”

Fjord Garanti: same bank, two mindsets TRADITIONAL CUSTOMERS Used to banking services as usual. Explicit banking. DIGITIZE RELATIONSHIPS Be more efficient, Mortgage, Accounts, Investments, PFMs NEW GENERATION Mobile, on the spot “Implicit banking” LIFESTYLE PARTNER New relationships, Financial micro-services, Payments, Shopping, Advice, Open to 3 rd parties

Accenture Innovation Awards & Challenges in 11 Themes Health & Wellbeing How can we increase the quality of our increasingly longer lives? Fair Food How can we sustainably feed the growing and more prosperous global population? Smart Manufacturing Easy Travel & Transportation How can we optimize mobility of people and products? Circular Economy How can we create a truly Circular Economy Seamless Shopping How can we maximize value from revolutionized manufacturing? How can we customize and simplify shopping & paying experiences? Safe & Secure Society Perfect Cities How can we ensure the physical & digital safety of our society? How can we advance fast growing cities to be livable and competitive? Clean & Affordable Energy Internet of Me How can we accelerate the energy transition to make our energy Clean & Affordable? How can we create deeply personal and self determined experiences in a rapidly digitizing world? Skills to Succeed Copyright © 2016 Accenture All rights reserved. How can we establish easy access to knowledge, the right skills for the jobs of today and of the future? 20