Incumbent companies, those that currently play a leadership or top-tier role in their sector, are challenged by disruptive firms and capabilities. Disruptive business models tend to use technologies, knowledge and strategies from more than one sector and then combine them to create new offers, dis-intermediate, and pull in new customers. By doing so, disruptive firms can shift, create or destroy a market altogether, leaving the incumbent with a burning platform.
Partnering with disruptive firms is often the preferred choice for incumbents, as it can import new technology, talent and expertise, enhancing an incumbent’s business model by creating a compelling and more competitive new offering, while being cheaper and posing lower risk. This article discusses four principle ways of partnering, providing practical examples for each and recommending a number of clear actions for CEOs.