The Digital Transformation Playbook: Rethink Your Business for the Digital Age

part by WhatsApp. A long article by Courtney Rubin in the New York Times 
detailed the rise of mobile social networking (via text messaging, Insta-
gram, Facebook, and Grindr) in the social life of multiple American college 
towns. Rubin’s ethnographic reporting uncovered a broad shift, described 
by both students and owners of college bars. Each described how students 
are spending less time and less money in the bars and coordinating more 
of their socializing through mobile networking, with alcohol purchased in 
stores and consumed in residences. College bars have always made their 
money charging for drinks. But the value they provided to customers was 
mostly the opportunity for serendipitous encounters and socializing. Now 
students find they can get that through their phones and are showing up to 
the bars sometimes only for a last drink before closing time (hardly enough 
to keep a bar in business). Many college bars are struggling, and some that 
have operated for decades are closing down. Yet another incumbent indus-
try has been disrupted by the rise of mobile messaging.
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Now that we’ve examined the theory of business model disruption, 
how it expands on previous theories, and some of the key variables in its 
application, let’s put it to work with two strategic planning tools. These 
tools will allow businesses to gauge whether a threat they’re facing is dis-
ruptive to their business and, if so, to assess its likely course and then select 
among six possible incumbent responses.
Tool: The Disruptive Business Model Map
The first tool is the Disruptive Business Model Map. This strategy mapping 
tool is designed to help you assess whether or not a new challenger poses a 
disruptive threat to an incumbent industry or business.
If your business is the incumbent, you can use the map as a threat 
assessor—to judge whether a challenger poses a traditional competi-
tive threat that you can respond to with traditional countermeasures or 
whether it is a genuine disrupter. You can also use the map if your business 
is a start-up or an innovator within an enterprise. As you develop new 
ventures, the map will help you to identify the industries where you may 
pose a disruptive threat and those that may be less affected or more able 
to respond to your challenge.

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M A S T E R I N G D I S R U P T I V E B U S I N E S S M O D E L S

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Figure 7.1 shows the Disruptive Business Model Map. It includes eight 
blocks, each of which you will fill out in making an assessment of a poten-
tially disruptive threat. Let’s look at each block and the question you must 
answer to fill it in.
Step 1: Challenger
The first step of the Business Model Disruption Map is to answer this ques-
tion: What is the potentially disruptive business?
The challenger you identify here may be a new competitor to your own 
established business. It may be your own start-up, attempting to disrupt an 
existing industry. Or it may be a potential new venture or initiative within 
your organization whose disruptive potential you are seeking to judge.
Note that we are not yet labeling this challenger as “the disrupter.” The 
point of the map is to apply business model disruption theory to analyze 
the challenger, incumbent, and customer to determine if there really is a 
threat of disruption. In my experience running this scenario with numer-
ous executives—both to analyze existing threats and to test the market for 
a proposed new venture—many challengers who have been dubbed disrup-
tive do not in the end pass the test.
In describing the challenger, you need to include its key offering: What 
are its unique products and services? What is it bringing to the market that 
does not exist yet? If your challenger were Netflix, you would include not 
just the name of the company but also a description of the monthly sub-
scription service model that it is offering for movie rentals.