Digital Disruption and Transformation – Is Digital Business impacting the competition based on Porter’s Five Forces Model and how can business profit from it?
In this dissertation, two main points are going to be analyzed. First, the changes that Digital Disruption has added to the competition and second, how is business reacting to such changes. Many different approaches to digital disruption were found, especially the theory of Christensen seemed quite influential. Literature research showed that for analyzing the real world business this model would not be sufficient or maybe even proved wrong – and maybe only valid in theory.
In this dissertation, Porter’s Five Forces Model was chosen because through the literature review it was found out that Digital Disruption is not only about innovation, but also more about competition. Porter’s model was the ideal foundation to build on because it has been valid for so many years and been used in many different industries.
Through analyzing disruptors as amazon go, this dissertation tried to figure out characteristics of disruptors in the home improvement sector of the do-it-yourself (DIY) industry. After making short case studies on the way disruptors are changing competition in the DIY, this dissertation tested five new forces in a survey and derived three forces that could be added to Porter’s Five Forces model. The aim of this new model is to facilitate competition analysis also on digital competitors that do not come from the same industry or are not visible at first glance. The information was gathered in the DIY industry through a survey, that was designed to understand the challenges that digital competition poses to this industry. This industry has been chosen because it seemed not to get disrupted easily. Through this dissertation, some companies of the DIY could derive new insights on what is happening in their industry and what would be needed to “fill the gap” in their digital environment.
Combining both methods (literature review and survey data analysis), in the end, the result is a suggestion of an enhanced model of Porter’s Five Forces for digital disruption. All five new forces were tested in the survey, three of them succeeded in the survey, two of them failed in the survey and were therefore removed from the suggested model – finally, there are now five forces from Porter and three new forces from the digital world. It may help further researchers on this topic to enhance the insights on Digital Disruption and Transformation for competition in any given industry.