How Is Business Disruption Creating New Markets?

How Your Small Business Can Adapt to Disruption


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Business disruption occurs when (typically through innovation) a company introduces a product or service that either significantly affects an existing market or creates an entirely new market. While business disruption has been ongoing since the Industrial Revolution, for many industries the pace has accelerated in recent years, mainly due to the development of the internet.

Here are some examples of traditional industries that have been greatly affected by business disruption and how small businesses have been able to adapt to the changes.

Business Disruption in Agriculture

Agriculture was the bedrock of employment in many countries for thousands of years. As recently as 1860 one-fifth of the U.S. population worked on farms—5.88 million out of 31.45 million. That number has dwindled to less than 2 million in 2015. The development of fertilizers, selective plant breeding and mechanical devices like the combine harvester have greatly improved farming productivity and led to the elimination of most manual farming jobs.

The economies of scale in agriculture have led to a huge rise in factory farming, making it very difficult for small family farming businesses to make a living from producing traditional bulk agricultural commodities such as wheat, corn, cattle, etc. According to a U.S. Department of Agriculture report, the number of farms peaked at 6.8 million in 1935, and fell to 2.1 million in 2002.

To be successful, small farms have been forced to take various measures to improve profitability, such as:

  • Pooling equipment and resources with other small farms
  • Converting to higher value specialty crops such as ginseng, saffron, lavender, bamboo, etc.
  • Practicing sustainable agriculture and/or becoming certified organic
  • Direct marketing products to consumers via on-site sales, farmers' markets, etc.
  • Raising hormone-free, grass fed cattle or animals such as water buffalo that can provide milk for exotic yogurts, cheeses, etc.

Business Disruption in Book Publishing

The online sales of e-books and e-readers has revolutionized the book publishing industry and led to a massive decline in the number of brick and mortar retail print book vendors. The second-largest book retailer in the U.S., Borders filed for bankruptcy in 2011. The largest, Barnes & Noble, has seen its stock price decline substantially since 2006.

Surviving independent booksellers have been able to adapt to the changes by avoiding direct competition with online vendors such as Amazon using methods such as:

  • Selling/trading used books
  • Specializing in rare or out of print books or large volumes that have not been or cannot easily be rendered digitally
  • Selling ancillary items such as mugs, t-shirts, cards, etc.
  • Sharing space with coffee vendors or internet cafes so customers can enjoy a printed book and a beverage in a relaxing atmosphere

Business Disruption in Transportation

The transportation industry has gone through numerous upheavals in history, from sailing ships to the invention of trains, automobiles, and jumbo jets. More recently, the traditional taxi and rental car services are in free fall due to the rise in demand for ride hailing services from companies such as Uber and Lyft. According to a report from Certify, which analyzed over 10 million business travel receipts and expenses in 2017, Uber dominated 74% of the business traveler ride-hailing market, while taxis only accounted for 7%.

Even more disruptive for employment in the transportation field is the continuing development of autonomous vehicles. According to statista, the sales of autonomous vehicles in the U.S. are projected to reach 4.5 million units by the year 2035.

In spite of the changes, Monster says that 417,000 net jobs are expected to be added to the transportation industry from 2012 to 2022 due to increased demand. This means there will be plenty of opportunities for small businesses and independent contractors, including:

  • Contract truck drivers
  • Automotive and heavy-duty mechanics, diesel engine specialists
  • Construction laborers
  • Crane operators
  • Heavy equipment operators
  • Drillers, blasters

Business Disruption in Hospitality

The hospitality industry has seen many changes in recent years. The steady increase in bookings through online travel agencies is cutting into hotel/motel profit margins, and the emergence of online property rental marketplaces such as Airbnb and HomeAway has led to intense competition for travelers.

However, for those wishing to start a small business in the hospitality industry, Airbnb and HomeAway represent ideal opportunities. Statistics show that guests prefer to stay at Airbnb/HomeAway for the following reasons:

  • Airbnb/HomeAway rentals are typically much cheaper than comparable hotel rooms.
  • Guests can stay in local neighborhoods, experience the comforts of home, and experience the destination the way locals do. Kitchens allow guests to save money by preparing their own food.
  • Airbnb/HomeAway rentals offer more privacy and peace and quiet than busy hotels/motels.

If you have suitable rental accommodations in an attractive/popular location, an Airbnb/HomeAway rental can be a great business opportunity.

Existing hotels/motels can compete with property rental companies by:

  • Providing excellent service: While a stay at an Airbnb property is fine for people who wish to be on their own, a full service hotel/motel typically has staff available to provide assistance to guests when needed at any time of the day or night.
  • Offering amenities such as restaurants, pool/fitness facilities, etc.: Many guests would rather not cook for themselves and appreciate convenient access to a restaurant (particularly for breakfast). Others prefer to keep fit while traveling and make use of fitness rooms and/or pools.
  • Housekeeping services: Leaving housework behind is one of the great things about traveling. And for many people, the housekeeping services that come with staying in hotels/motels make the choice worthwhile.