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In this article, the architect of disruption theory, Clayton M. Christensen, and his coauthors correct some of the misinformation, describe how the thinking on the subject has evolved, and...
- What Is Disruptive Innovation?
- 4 Tips For Understanding The Theory of Disruptive Innovation
- Understanding The Impact of Disruptive Innovation
According to Christensen, disruptive innovationis the process in which a smaller company, usually with fewer resources, is able to challenge an established business (often called an “incumbent”) by entering at the bottom of the market and continuing to move up-market. This process usually happens over a number of steps: 1. Incumbent businesses inno...
1. Not All Innovation Is Disruption
According to Merriam Webster, disruption is "to cause (something) to be unable to continue in the normal way: to interrupt the normal progress or activity of (something)." If this definition is applied to business, then really anything that enters a market and is successful can be seen as "disruptive." At least that’s how the term is often used today. But this isn’t how Christensen defined it when writing in the 1990s. An article by Ilan Mocharidiscusses the misuse of the word disruption when...
2. Disruption Can Be Low-End or New-Market
Disruption can come in different varieties: Low-end disruption and new-market disruption. 1. Low-end disruptionrefers to businesses that come in at the bottom of the market and serve customers in a way that is "good enough." These are generally the lower profit markets for the incumbent and thus, when these new businesses enter, the incumbents move further "upstream." In other words, they put their focus on where the greater profit margins are. 2. New-market disruptionrefers to businesses tha...
3. Disruptive Innovation Is a Process, Rather Than a Product or Service
When innovative new products or services, such as Apple’s iPhone or Tesla’s electric car, launch and grab the attention of the press and consumers, do they qualify as disruptors in their industries? In theHarvard Business Review, Christensen cautions that it takes time to determine whether an innovator’s business model will succeed. He cites Netflix as an example that didn’t threaten Blockbuster at first; its DVDs-by-mail service didn’t satisfy customers who wanted to get their hands on the l...
Whether you're an incumbent intent on defending your market share and profits or you are a new entrant seeking to grab a piece of the pie, understanding disruptive innovation as a process can offer valuable insights you can incorporate into your business plan. Do you want to learn more about disruption and explore other theories from Professor Chri...
In the case of new-market footholds, disrupt-ers create a market where none existed. Put simply, they find a way to turn nonconsumers into consum-ers. For example, in the early days of photocopying technology, Xerox targeted large corporations and charged high prices in order to provide the perfor-mance that those customers required. School librar-
Diversifying into new kinds of business will protect your company. Though technology- and information-intensive firms are most vulnerable to big bangs, mature industries face this threat, too.
perspective, we can see new dimensions on the game board that let us ask new questions and craft new approaches: • How can you identify the shifts that will disrupt your ecosystem, turn partners into rivals, and undermine your ability to win? • How can you drive ecosystem disruption to collapse boundaries and upend established competitors?
Disrupt : think the unthinkable to spark transformation in your business / Luke Williams. p. cm. Includes bibliographical references and index. ISBN 978-0-13-702514-5 (hardback : alk. paper) 1. Organizational change. 2. Creative ability in business. 3. Disruptive innovation. 4. Success in business. I. Title. HD58.8.W544 2011 658.4’063--dc22 ...
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In line with its rising economic role, the developing world is now driving global connectedness. For the first time in history, emerging economies are counterparts on more than half of global trade flows, and South-South trade is the fastest-growing type of connection.
