Disruption Strategies Antonymous To Traditional Assumptions

Posted in Operations & IT Articles, Total Reads: 1192 , Published on 26 May 2014

The Virgin Atlantic Way

Innovation, Highest quality customer service, Out of the box thinking and “Mr. Branson” factor(Never averse to risk) have all been the pillars of Virgin Atlantic’s model of International passenger flight operations since its first flight in 1984.

The following are some of the strong traditional assumptions they challenged with their model.

Assumption: The more the customer needs the more premium is the price he has to pay.

Image Courtesy: freedigitalphotos.net, Stuart Miles

Virgin Atlantic’s take:

VA’s ideals and way of working which was reflection of Mr. Branson’s Character challenged the usual. They wanted to provide maximum benefit to the customer at the cheapest price. This they achieved through continuous innovation and charged low cost for the state of the art facilities that the customers experienced. one auch example is the Nintendo set up for kids. They had gone a level further in this attempt by being the benchmark in-flight entertainment and ambience.

Assumption: Operate from Big airports to be a known brand.

Virgin Atlantic’s take:

An important factor that proved to be an advantage for them was the restrictions which did not allow them to operate from Heathrow. They operated from a lesser known Gatwick Airport which allowed them to operate at lesser costs and concentrate on customer service improvement.

Some of the other assumption they broke away from include

1. Connecting flights- they operated point to point high passenger load flights.

2. Carry both Air cargo and passenger in the same aircraft- They cut costs further by combining both.

3. Agent ticket sales- Direct ticket sales and through e commerce(included online flight check in services)

4. operate traditionally bought aircrafts without investing much on R and D- on the contrary virgin worked along with Boeing in developing wide body environmental friendly aircrafts consuming less fuel enabling them to operate at low costs.

5. Culture of working and service in traditional aircrafts was mechanical- Virgin’s service and culture had fun elements which was synonymous to Sir Branson’s name.

A take away from this is that they disruptively innovated in order to create a model on their own. These innovations include operational excellence, innovative pricing, innovation in safety and innovation in ticket sales.

Other interesting cases of disrupting traditional operating methods

1. Toyota’s model of operations has completely changed the way automobile manufacturing is being carried out. They achieved operation and manufacturing excellence through innovative systems such as JIT(just in time) and Lean. They challenged the traditional assumption of in house manufacturing of parts. Through these innovations they were able to provide low cost, fuel efficient luxury cars. They haven’t stopped there and have always been on the innovation front, be it the system of manufacturing or innovation on the product they manufacture.(Prius is an example of one such innovation).

2. Grameen Bank’s operation in Bangladesh is another example that has a similar feature of challenging the traditional assumptions. This bank provided micro finance to the poor who didn’t have any collateral for taking loans as against the usual bank practices of giving loans only upon providing collateral for it. It also targeted women in a society that was traditionally conservative in providing them with such loans. Mr.Younus then extended this model to various other businesses and has made the entire organization a sustainable setup.

In the above examples we see that disruptive innovations that challenged traditional assumptions have brought about a change in the entire industry they have disrupted. It also shows us that in order to sustain in the business the organizations have never ceased to innovate.

This model of functioning against the traditional assumptions can be achieved in any industry provided the factor of disruption leads to positive results and competitive advantage to the organization involved.

This article has been authored by Ankit Tibra and Madhusudan TV from IMT Ghaziabad


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