Destruction – the word sends negative feelings and it also sends a signal of bad times. However when the word Creative is attached to it , the meaning changes drastically. Creative Destruction is a process that can change the Paradigm and brings about Positive Changes; though the change might not be pleasant to everyone.
As per Investopedia – Creative destruction can be described as the dismantling of long-standing practices in order to make way for innovation. Creative destruction was first coined by Austrian economist Joseph Schumpeter in 1942. Schumpeter describes creative destruction as innovations in the manufacturing process that increase productivity, but the term has been adopted for use in many other contexts.
Creative Destruction – the idea is not to change the old but to invent a new. The essence is to raise the bar and build something new that can completely take the competition by surprise and catch them off guard. Some brands have done that and no doubt they rule the market. They rule the market not only because they catch their competitors off guard but also because they challenge their old beliefs and continuously improve.
Some companies that have used Creative Destruction to disrupt the market:
- Nike – In 2012 Olympics Nike was not an official sponsor but still they managed to get the maximum lime light and media attention. Traditionally Nike has always had a high Olympic profile despite not having sponsor’s status, they smartly outwitted big-money Olympic sponsors such as Visa, McDonald’s and Adidas – which reportedly paid $155 million for its official London 2012 sponsorship. Question is what did Nike do to offset this spending of Adidas & other major sponsors? The Game changer was “Nike Volt Shoes’ ‘, in fact they won Gold for Nike in ambush marketing. Approximately 400 athletes wore these shoes and they took the show away from other brands, even official sponsors of the Olympics.
- Netflix – It has been so disruptive to existing industries, that its impact is now being referred to by some as the “Netflix effect.” Here are a few examples of the “Netflix effect” and the industries that have been “Netflixed”.
- Video Tape and Disc Rental Industry – totally disrupted by Netflix. The old architect of industry has gone through “Creative Destruction” and a new industry structure has been formed.
- Traditional Media Companies – Netflix has been challenging the conventional structure of cable networks, traditional network TV channels, and pay-TV service. It has altered the way this industry operates and the way consumers watch content.
There are many such examples of brands that lead because of Creative Destruction and push the boundaries.
