The Disruption Risk Assessment helps identify how healthy or at risk a business model in your portfolio actually is and how much attention it needs to be improved and de-risked. This assessment includes two dimensions.
Frontstage
Our products and services perform worse than those of our competitors
Our products and services are highly differentiated and loved by our customers
We lost over 20% of our customer base in the last six months
We increased our customer base by at least 20% over the last six months
We are 100% dependent on intermediaries to get products and services to customers and they are taking control of the customer relationship
We have direct market access and fully own the relationship with the customers we serve and interact with
All our customers could theoretically leave us immediately, without incurring direct or indirect switching costs if they left
All our customers are locked in for several years and face significant direct and indirect switching costs if they left
Backstage
Our key resources are significantly inferior to those of our competitors and have been deteriorating over the last six months. New entrants compete with far superior resources
Our key resources can't easily be copied or emulated for the next couple of years and our competitors can't easily catch up (e.g., intellectual property, brand, etc.)
The performance of our key activities is significantly inferior to that of our closest competitors and has been deteriorating over the last six months. New entrants compete with new, superior activities
Our key activities can't easily be copied or emulated for the next couple of years and our competitors can't easily catch up (e.g., cost effectiveness, scale, etc.)
Over the last six months we lost access to key partners
Our key partners are locked in for several years
Profit Formula
We lost over 20% of our revenues in the last six months
We doubled our revenues over the last six months and are growing significantly better than our competitors
Our cost structure grew faster than revenues and is significantly less effective than that of our competitors
Our cost structure shrank compared to revenue growth and is significantly more effective than that of our competitors
Our margins shrank by over 50% in the last six months and are significantly lower than that of our competitors (e.g., over 50% lower)
Our margins increased by at least 50% in the last six months and are significantly higher than that of our competitors (e.g., over 50% higher)