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Summary. For the past 20 years, the theory of disruptive innovation has been enormously influential in business circles and a powerful tool for predicting which industry entrants will succeed ...
- Michael E. Raynor
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- Disruptive Innovation for Social Change
Summary. Reprint: R0612E. Countries, organizations, and...
- Rory McDonald
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- The Magazine
They start by clarifying what classic disruption entails—a...
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In this article, the architect of disruption theory, Clayton...
- Michael E. Raynor
- 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...
Disruption is a process, not a product or service, that occurs from the nascent to the mainstream; ... Cameras for classic photography are stand-alone devices.
CategoryDisruptive InnovationMarket Disrupted By InnovationTraditional encyclopediasComputer hardwareJun 20, 2024 · A classic example of the disruptive innovation of the internet being unleashed was the restructuring of the bookselling industry. ... but there is no doubt about the disruption it brought about.
- The common understanding of disruption IS NOT disruption according to Christensen. Let’s start with the basic understanding of 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).”
- Disruption can be low-end or new-market. These differences are laid out in Disruptive Strategy with Clayton Christensen. Low-end disruption refers to businesses that come in at the bottom of the market and serve customers in a way that is “good enough.”
- Christensen’s disruption is a process, rather than a product or service. When innovative new products or services – iPhone, Tesla’s electric cars, Uber, and the like – launch and grab the attention of the press and consumers, do they qualify as disruptors in their industries?
- Choose your battles wisely. If you are a current incumbent and want to be on the lookout for a possibly disruptive emerging business, the clarification of what disruption is certainly helps.
Netflix’s disruption of Blockbuster is a classic illustration of how an under-resourced new entrant can take on and beat an industry leader. While Netflix lacked the ability for customers to immediately drive to a store to rent a movie on the same day, it allowed customers outside of core geographic regions to cheaply access a wide library of DVDs by mail.
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Disruption theory differ-entiates disruptive innovations from what are called “sustaining innovations.” The latter make good prod-ucts better in the eyes of an incumbent’s existing customers: the fifth blade in a razor, the clearer TV picture, better mobile phone reception. These im-provements can be incremental advances or major
