Birkinshaw’s Disruption Response Strategies Matrix Template

Description
In January 2022, Prof. Julian Birkinshaw (London Business School) published on HBR an article called "How Incumbents Survive and Thrive".

He describes that over the last 25 years, a surprisingly large of companies who, in theory, would have been kicked out by an actor disrupting the market, are actually still up and running today. It seems that the strategic responses put into action by historic actors have been slightly over-looked in the business literature. According to his research (based on the analysis of Fortune 500 and Global 500), there are 4 families of potential successful strategic responses to digital or technological disruptors arriving on markets. In fact, according to Birkinshaw, on the contrary to what most leaders think, playing the game of the disruptor (i.e."fight-back" below), is not the only viable strategy. His article, based on data analysis and key business cases, proves that the "real story" is actually quite different.

I strongly encourage reading the article here to grasp Prof. Birkinshaw's demonstration: https://hbr.org/2022/01/how-incumbents-survive-and-thrive

The categorization of the 4 families of response strategies to disruption depends on:
- the nature of the response (offensive vs defensive)
- the segments & markets addressed (existing vs new)

If you map this on a 2x2 or 4 quadrant matrix, it leads to 4 types of strategic responses to disruption, with benefits and risks associated with each strategy:

1️⃣ DOUBLE DOWN (Offensive + Existing Markets): going full-steam on existing strengths.
- Benefits: You can use your historic assets as a competitive advantage
- Risks: These assets may become obsolete / of low value in the future
Example: Disney in the 2000s when streaming services emerged. They decided to make key acquisitions in the movie sphere (Pixar, Marvel, Lucasfilm...) and double down to produce blockbusters. The creation of a vast library of movies, characters, universes now (in 2022), makes it a serious competitor to Netflix with Disney+ - they are actually now moving towards are "Fight Back" strategy.

2️⃣ FIGHT BACK (Offensive + New Markets): playing the same game as "the insurgent" and hoping to gain market share or outcompete them.
- Benefits: By using financial power, you can quickly re-build a growing and solid business in a new market, putting up a new hurdle
- Risks: Poor execution and timing is frequent - and most innovative initiatives fail
Example: Major carmakers launching electric vehicles to face TESLA

3️⃣ RETRENCH (Defensive + Existing Markets): a move to play on the weakness that sprang to life with the arrival of the disruptor, aiming to survive as long as possible in a declining segment.
- Benefits: Lobbying and pure advantage from size/scale serve as hurdles for new entrants
- Risks: The end of the story is usually a long fall with little hope to survive through the siege - investors may not adhere
Example: Nokia Siemens bought Alcatel-Lucent in 2016 to counter Huawei's growth in 4G.

4️⃣ MOVE AWAY (Defensive + New Markets): Migration to opportunities by quitting historic market.
- Benefits: You are opportunistic about potential business growth in new markets
- Risks: Diversifying contains many risks and upsides may be limited
Example: Fujifilm (Kodac's main competitor at the time) moved away from the photo services business into health care imaging and materials.

Given the high pertinence of Birkinshaw's research paper and model Disruption Response Strategies matrix, I decided to create a template that any leadership team can use to study the various strategies that can be put in place to counter disruption arriving on a given market.

The Best Practice is:
- an editable Microsoft PowerPoint Template Slide + Excel File
- with an online & offline 12 step-by-step methodology, with pedagogical illustrations for each step.

Should you have any questions about this top tier strategy framework template (Strategic Response to Disruption), you're welcome to reach out to me via Private Message.

Good Luck!
- Tim

Other pertinent readings on disruption
- Müller & Müller - How to avoid getting disrupted: https://www.muellersconsulting.com/post/how-to-avoid-getting-disrupted
- Michael Wade - 7 Generic Strategies to respond to Disruption: https://www.thedigitaltransformationpeople.com/channels/strategy-and-innovation/7-generic-strategies-to-respond-to-digital-disruption/
- McKinsey & Company, Jacques Bughin and Nicolas van Zeebroeck - The best response to digital disruption: https://www.mckinsey.com/mgi/overview/in-the-news/the-right-response-to-digital-disruption

⭐️ Bundle of 17 Four-Quadrant (2x2) Matrix Framework Templates (including this one): https://www.eloquens.com/tool/wJa7FKkP/strategy/management-consulting-templates-and-frameworks/four-quadrant-matrix-frameworks-template-bundle