Amazon just announced that people are reading more and more books on the Kindle days after Appple announced that people are downloading more and more applications on the iPhone. And profits rose 47%. It’s no secret that these two companies are among the handful that have kept up revenues and profits throughout the worst recession since the Depression and are poised to do even better as the economy begins to growth again.
The reason is simple—but not simple enough apparently for most managers in most global companies to comprehend. Apple and Amazon have created disruptive platform innovations that change the game for consumers. And they have done it within a price range ($300 to $400) that reduces the cost and risks to people even in a recession.
Let’s take this strategy apart. First, a game-changing BIG innovation—a platform innovation. Second, a price for consumers that is low enough to entice them to take the leap into the new, disruptive innovation. Third, a multitude of applications and “stuff” (products, services, experiences) on the platform that provide value (information, insight,entertainment) to people.
That’s it folks. It is that simple. Or that complex. It takes a special type of culture, organization and leadership to make it happen.