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What is Disruptive Innovation? - Coggle Diagram
What is Disruptive Innovation?
Many researchers use “disruptive innovation” to describe any situation in which an industry is shaken up and pre- viously successful incumbents stumble.
The problem with conflating a disruptive innovation with any breakthrough that changes an industry’s competitive patterns
Is that different types of innovation require different strategic approaches
Disruption describes a process where by a smaller company with fewer resources is able to successfully challenge established incumbent businesses.
Disruptive innovations originate in low-end or new-market footholds.
Low- end footholds exist because incumbents typically try to provide their most profitable and demanding customers with ever-improving products and ser- vices
New-market footholds, disrupt- ers create a market where none existed
Disruptive innovations don’t catch on with mainstream customers until quality catches up to their standards.
Disruptive innovations, on the other hand, are initially considered inferior by most of an incumbent’s customers.
Why Getting It Right Matters
Disruption is a process.
It is used to refer to a product or service at one fixed point, rather than to the evolution of that product or service over time.
Disrupters often build business models that are very different from those of incumbents.
Solution shop” business model.
They follow standardized protocols to diagnose and treat a small but increasing number of disorders.
Some disruptive innovations succeed; some don’t.
The failures are not evidence of the deficiencies of disruption theory; they are simply boundary markers for the theory’s application
The mantra “Disrupt or be disrupted” can misguide us
Incumbent companies do need to respond to disruption if it’s occurring, but they should not overreact by dismantling a still- profitable business
They should continue to strengthen relationships with core customers by investing in sustaining innovations
The disruptive innovation model
As incumbent companies introduce higher-quality products or services ,to satisfy the
high end of the market
They overshoot the needs of low-end customers and many mainstream customers.
What a Disruptive Innovation Lens Can Reveal
The theory of disruption predicts that when an entrant tackles incumbent competitors head-on, of- fering better products or services
The incumbents will accelerate their innovations to defend their business. Either they will beat back the entrant by offering even better services or products
Making sense of anomalies
Companies should create a separate division that operates under the protection of senior leadership to explore and exploit a new disruptive model.
Redefine an existing industry problem and solve the redefined problem.
Innovation strategies that redefine an existing industry problem and solve the redefined problem lead to both disruptive and nondisruptive creation
How to Spot Potential for
Nondisruptive Creation
First, they tend to think deeply about burning but overlooked issues in the world, in their industry, or in their vocation that they truly care about and that people or organizations are struggling with.
Step two is to understand which organizations or industries would typically address the problem or opportunity and to figure out why they have overlooked it
The third step is to look for new technologies, platforms, and/or methods that allow you to solve the problem or seize the opportunity in a high-value, low-cost way.