Example Of Disruptive Innovation

“Classic disruptive innovation says that a cheaper, but lower-quality, innovator can eventually overtake an incumbent by gradually siphoning off customers the incumbent doesn’t find it profitable to defend. As the disruptor improves its offering, though, the incumbent’s position becomes increasingly fragile. Big bang disruption differs in that the start-up offers an innovation that’s not only cheaper, but better — higher quality, more convenient, or both — almost right off the bat. The Blockbuster-Netflix skirmish is a case in point.” (Downes & Nunes

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).

Describe a firm you think has been highly innovative. Which of the four types of innovation—radical, incremental, disruptive, or architectural—did it use? Did the firm use different types over time?

Other companies have used Disruptive Innovation to come in at the bottom of a market and focus on a lower cost and change the way consumers purchase goods and services, changing the market forever. One of the best examples of this type of Disruptive Innovation was Toyota. Toyota came into the American market and offered inexpensive cars that offered very view features and small 4 cylinder engines. At first many consumers turned their nose up to the Toyota products. But some consumers bought the Toyota because they were a cheaper option for automobile transportation. When more customers started to purchase Toyotas and the company was able to establish a solid footing in the American Business market and they started to change the model of their business. Toyota started to offer higher end cars and eventually moved into the luxury automobile industry with the Lexus line of cars. Disruptive innovation is a continual process and happens in business all the time. You can also see it in the car market right now with Hyundai and Kia.

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).

Jill Lepore, a Harvard University professor and writer, wrote an essay titled “The Disruption Machine” in response to an idea in Clayton Christensen’s book The Innovators Dilemma. Lepore analyzes Christensen’s idea called disruptive innovation, which defines that “a cheaper, poorer quality product” (2) will take over an industry and the products that are contained within it. Despite Christensen’s credibility as a Harvard Business professor and author, his idea was not invincible to Lepore’s critique. Although Christensen offers a number of examples to support his idea, Lepore finds his points to be arbitrary and ignorant to “factors that do not support his theory”(8). Furthermore, Lepore focused heavily on her belief that his idea is indeed

Netflix’s completed changed the movie renting industry. Netflix’s completely changed the movie renting industry. Netflix targeted Blockbuster customers who were inconvenienced by making two trips to blockbuster in a 24 hour period and also spent time to scan the stacks to find their movies of interest. Netflix online and mail distribution system was a way to scale Blockbuster’s barriers to entry, which is their network of stores. This is a great example of disruptive innovation as they targeted a market niche, one which has been neglected by the incumbent. Blockbuster was caught off guard by the innovation by Netflix

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

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.

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

“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.

The case study of “Disruptive Innovation” is a studying that concentrated and described an innovation as the affordable price products for people in the entire world to use. This research indicated about certain disruptive innovations such as the laptops, the routers, smartphones or desktop photocopier that are the substitutions for other companies’ commodities. Furthermore, Porter five forces strategy is a structure to examine the level of competition in today’s market and to make an improvement for the business strategy. Likewise, these forces are including: the threat of new entrants, when suppliers have power, when customers have power, the threats of substitutes and intensity of competitive rivalry. Therefore, this report was assigned to analyze Porter’s five forces strategy for applying toward the case of disruptive innovations and demonstrating on how it affects or relates to most of the companies worldwide.

According to the Innovation Policy Platform, a radical or disruptive innovation is an “innovation that has a significant impact on a market and on the economic activity of firms in that market.” (Radical and incremental innovation, 2013, p. 1). From this definition, IBM is a prime example of a radical innovation. The Watson super computer has performed activities no other invention has before. IBM has gone through at least five radical changes in its environment such as

Innovation is what gives an organization the competitive advantage the business will need to be successful in the market. Innovations are ideas that can impact the strategy, process, products and services that an organization has to offer to its customers. Three organizations that have an enormous impact on innovation are United Parcel Service (UPS), Hewlett-Packard and The Coca-Cola Company.

Strange innovation methodologies, wanders into new markets or contrarian ways to deal with existing markets.