3D printing, strategies for established industries to cope with the disruptive technology

Abstract

Abstract Radical innovations are known as mechanisms, which cause unexpected sudden death of established business models and enable start-ups to create enormous growth. Literature provides with many insights, why incumbents, ironically especially the best managed ones, are predictive victims of radical innovations. There is a lot of literature discussing the opportunities for start-ups, but less regarding survival strategies for incumbents. Therefore this thesis aims to answer the question: What can incumbent companies do, to response on radical innovations, to find themselves suddenly out of business to find having valueless assets and knowledge, which provided great margins for years? First a board literature review is provided to draw an outline of exiting frameworks and models. Based on this study, the thesis proposes a strategic decision pattern to cope with radical innovation. One major result is, that the character of an innovation is always relative to the innovation, market and business model. Therefore the thesis selected the emerging technology of 3D printing potentially hitting the incumbent maintenance, repair and overhaul (MRO) market player Lufthansa Technik LHT on its home turf. The analysis of the MRO market identifies a long term threat of LHT existing business model. This threat is identified as the emerging the strategy of OEMs to earn from maintenance leveraged by the ability to produce parts via 3D printing. Applying the insights of the literature study and the latest model of a framework for the fuzzy font end of innovations allows to draw a roadmap for LHT. The insights of the case study are finally generalized to answer the generic question. The derived answer is: Incumbents can be the best start-up with radical approaches, due to their resources, if they manage not to stumble on those. To avoid the threats of radical innovations, incumbents should aim a self-renewing intrapreneurial culture and organisation in order to create an agile explorative force with the ability to build and run new exploitation models. This open culture must be accompanied by gentle strategic regulation of the top management and an innovation management regime providing paths for both incremental and radical innovations. The top management must allow some risk, failure and be ready to change strategy if needed.