ITPEC IP April 2025 Question 100
Which of the following is the most appropriate term to express the change where by using digital technology, a company creates a user experience (UX) and a business model that attract customers, expels conventional services in the industry, and as a result destroys the existing structure of an industry?
Explanation
Digital disruption — a newcomer's digital UX and business model drive out the industry's conventional services and destroy its existing structure.
Disruption is the kind of innovation that overturns a market rather than improving it. Ride-hailing apps against taxi companies, streaming against video rental shops and online travel agencies against travel counters are examples: the new player offers a more attractive experience at lower cost, customers move over, and the incumbents lose their place.
Answer (b)
Why not others:
- •(a) Digital signage — electronic displays showing advertisements or information in stores, stations and streets
- •(c) Digital divide — the gap in information and opportunities between people who can use IT and the Internet and those who cannot
- •(d) Digital transformation — a company using digital technology to transform its own business, products and organization; it can lead to disruption but does not by itself mean destroying the industry's existing structure
Key rule: Digital transformation is change within a company; digital disruption is the upheaval of a whole industry when a digital model displaces the incumbents.
Technological Strategy Management · AI-written, may contain errors
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