Disruptive Innovation

Alongside the entrepreneur spirit, Innovation is the process of taking new ideas and implementing them into the market. Key word being “new”, an innovation can be sometimes viewed as the application to better solutions that meet new demand-requirements, inarticulated needs or existing market needs. Innovative ideas range from: goods, services, products, processes, services, technologies or ideas that create value for which customers will pay for. For an idea to be an innovation, it must be replicable at an economical cost and must satisfy a specific need. This means is that one must be ready and willing put their new idea to the test. On the other hand, there is recognition that “innovation is also critical to cultural, environmental, social, and artistic progress as well” (Bullinger, 2006). With this stated, high-tech innovation is ultimately the reason why we can be thankful for the many new conveniences of the 21st century. Although we might see the forefront of innovation being very prominent in today’s world, innovation is truly nothing new. From the start of modern man times, innovative ideas have paved the way for civilization to advance and develop into what we are today and at the same time, we have barely begin to chip away at the tip of the iceberg of our true human potential. Some scholars believe that innovation is a

Disruptive technology is a new way of doing something that initially does not meet the needs of existing customers. This type of technology tends to open new markets and destroy old ones. While, a sustaining technology produces an improved product that customers are eager to buy. This technology provides better, faster and cheaper products on established markets.

Innovation theory define when new or existing, large or small companies, individuals or groups identify, create and market new or existing products or services to consumers ultimately disrupting an existing business or create value. Some ideas are born out of a need that ultimately satisfies consumers and some are the next steps that dominate the market. Pfizer’ innovative strategies provide new products such as Lipitor, Viagra, and Celebrex.

Being innovative does not only mean inventing. Innovation can mean changing the business model and adapting to changes in the environment to deliver better products or services. Successful innovation should be an in-built part of a business’s strategy to create a culture of innovation and lead the

If you are searching for a definition for innovation you can find a number of different ones. Basically they all include the idea of creating something new. Referring this idea to business, the definition of Westland seems to be appropriate. It says an ‘innovation is a product or service with a bundle of features that is – as a whole – new in the market, or that is commercialised in some new way it opens up new users and consumer groups for it’ (Westland 2008, p. 6). According to that, innovations can occur for products, services, processes and business models (Stamm 2008). Beside these categories, there are three different levels of innovations, depending on the degree of novelty involved: incremental innovations are minor changes. When implementing these changes, something is done in a better way than it has been already done before, so there’s nothing significantly new. Substantial innovations are mid-level in significance both to customers and to the company (Tucker 2008). Radical innovations, also known as breakthrough innovations, transform the way you think and have a big impact on the company and the customers in a whole (Tucker 2008; Bessant & Tidd 2008).

Clayton Christensen is responsible for the term, disruptive innovation in which the smaller, unassuming store comes out of no where and takes the lead, which in this case the disruptor is the off-price retailer, T.J. Maxx and the disruptee is the full-service department store in this case is Macy’s (Christensen, 2017).

“The Innovator’s Dilemma” describes Christensen’s theory of disruptive innovation. But, his theory isn’t essentially briefed as one would assume. Her opinion is that case studies (like disk-drive industry) were chosen by the author to demonstrate his perception, as well as subjectively distinct success metrics.

In Clayton Christensen’s Disruptive Innovation for Social Change he changes the term “social change disruption” into a catalytic innovation. Disruptive innovations challenge most industries by offering them simpler alternatives to their low-end customers. Catalytic innovation, however, can outdo the status quo by offering an acceptable solution to inadequately addressed social problems. Catalytic innovations are differentiated by its primary focus on social change on a national scale. For example, in the article mentions how Minneapolis health clinic, MinuteClinic is a catalytic innovation.

Another company who use disruptive business model is Walmart. In large retailer industry, Walmart has unique business model then any of their competitors. They offered everyday low price which is too much for his competitors. They also

The course reading introduces many things to consider when creating innovation. Clayton Christensen specifically identifies three lesson that are essential of disruptive change. The first lesson that Christensen explores is that of technological enablers. This disruption creates routine problems solutions. In the IT world, this is much like the definition of automation. It is a step by step process that says, “If this occurs then proceed here.” Eventually, you are able to narrow down the original cause rather than trying to treat just the symptom of the problem. As Christensen states, this can save an industry much needed time and effort. This, in turn, leads to monetary savings. I do agree with Christensen with the fact that technology can

What Christensen means is that using the words “disruptive innovation” in a non-jargon way is very difficult, as even Uber, the company most pointed to by many as the epitome of a disruptive company cannot even be defined as disruptive. Perhaps he is implying that the misuse of certain words can be equated to jargon, such as when people in everyday conversation refer to Uber as a “disruptive” company. Because of this, Christensen believes that the mantra that commands: “Disrupt or be disrupted” can be very misleading. He advises corporate leaders of incumbent companies to not overreact to this mantra by trying to solve the problem before it is one. Christensen implies that overuse of this phrase requires incumbent businesses to be extra vigilant

Disruptive business either creates new markets or takes the low end of an established market

Roughly one company in every ten is able to sustain the kind of growth that translates into an above-average increase in shareholder returns over more than a few years. Once a company’s core business has matured, the pursuit of new platforms for growth entails daunting risk — to put it simply, most companies just don’t know how to grow, and pursuing growth the wrong way can be worse than no growth at all. In The Innovator’s Dilemma, Clayton Christensen showed how companies that

Tidd et al (2000) states, “the innovation is a business process of revolving opportunity into new ideas and of putting these into widely used practice. In term of the nature, there are five major types of innovations: novelty, competence shifting, complexity, robust design and continuous improvement. While in term of the extent of change, innovations can be divided into incremental, radical and

Tidd and Bessant (2009) argued that “Unless an organization is able to move into further innovation, it risks being left behind as others take the lead in changing their offerings, their operational processes or the underlying models that drive their business”.