Disruptive Innovation in Animation!!

According to Prof.Clayton Christensen, Disruption works best when the incumbent company ignores you as a competitor and doesnt feel threatened by your presence. Also, Disruption works out well for the "Not good enough" market and once the market becomes "good enough", it becomes a sustaining innovation.

Lets take the case of Animation & special effects in India and Lets take the example of Crest Animation Studios, who pioneered the animation industry in India.Initially, it started off by doing local commercials,with a small team of around 10people.Then it slowly expanded its wings and started getting work from abroad.They used this as a platform to test their capabilities as they moved upstream to get work 3D animated TV series which will be a high volume work.

For the US companies, Crest was not a competition and it was disrupting the low-end of the industry.The high cost structure and the longer production times are the two "not good enough" factors that was disturbing the TV producers.Crest disrupted that market and outsourced its services to provide high quality, low cost work.As a result of getting outsourced work, crest is all set to expand.The growing company invites new values through its new partnerships, new workforce,new clients and new technology.Also, their cost structure increases because of their need to attract the best talent in the industry.This means nothing to PIXAR but means a lot to Indian companies.

What does it mean to a small special FX Company like Oyster in Chennai? They do the low end disruption to Crest by reducing the prices and giving package offers which works well for producers who cannot fford Crest and who doesnt need Hollywood quality.Slowly, these companies produce quality equal to crest and at a much lower cost.This forces Crest to naturally exit this business(they shut down their India Business) because it doesnt support its cost structure and move upstream.

So Crest pushes a company like Mainframe Entertainment to move upstream whereas a company like Oyster pushes Crest to move upstream.

What does it mean to move upstream?

Mainframe Entertainment - Co-production for TV series, DVD/ Film Production

Crest - Animated Feature Film, High Quality/High Cost work, Co-Production

Oyster - Animated TV series, Game sub contracting

A freelancer - Hire more people, Create a company, pitch in for ads,films etc

These are immediate thoughts.I am writing a detailed article and would like that to be published in a popular business magazine soon.

Coca Cola!

I am currently reading Prof.Vijay Govindarajan's "The quest for global dominance".He has written a beautiful chapter on cultivating a global mindset.I loved this mindset of coke from its 1995 annual report.

What is our most underdeveloped market?

Human Body.People can do without most things for an entire day.But everyday, 5.7 million people consume roughly 64 ounces of fluid to survive and we currently account for less than 2 ounces.

Now I know where that power to succeed comes for Coke.