Disruptive Innovation

1105 Words5 Pages
ENTRY 2, DISRUPTIVE INNOVATIONS In this essay I will describe and explain the causes and consequences of disruptive innovation. Firstly I will write about what dualism is, why it is important and how to achieve it. I will continue with describing difficulties, which may occur on a company’s path towards it, namely overshooting and inability to recognize the start of a new industry cycle. Further on, I will go deeper in the reasons, why incumbents fail to recognize the new entrants on the market, specifically “attack from below” and other discontinuous patterns of change. In the end I will describe some of the responses taken by established companies to disruptive technologies. In today’s world when competition is such a big factor,…show more content…
This phenomenon was first identified by Gilfillan in 1935, and he named it “sailing ship effect”. It describes the way, how even though existing players on the market are often aware of approaching discontinuities, they still pursue with their current trajectories with success in the short term. Furthermore, the true significance of disruptive technology even in Christensen's conception of it is not its displacing of established products. Rather, it is a great means for enlarging and broadening markets and providing new functionality. And according to Utterbacks’ explanation: “The degree to which the market was expanded by the innovation seemed to be the strongest factor favouring new entrants”, a possible conclusion might be that this leads to a never-ending circle. Nonetheless, some companies have developed different strategies to keep themselves on top. Firstly, there are companies, which pursue the strategy of entering the market created by outsiders, in a role of a follower. They allow small pioneers to lead the way into new market territory. For example: IBM let Apple, Commodore and Tandy define a personal computer (Christensen, Bower, 1995). The second possible response taken by the incumbents is creating a new market by corporate venturing. It means using a start-up to create their own disruptive technology from a separate organization. The start-up would obtain a lower profit margin than the

More about Disruptive Innovation

Open Document