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Innovation

Disruptive innovation, a concept introduced by Clayton Christensen, describes how smaller companies with fewer resources can challenge established businesses by serving niche markets with affordable alternatives. Over time, these innovations improve and can displace traditional leaders, forcing established companies to adapt or risk becoming irrelevant. Industries such as telecommunications, transportation, and media have experienced significant disruption due to this phenomenon.

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70 views2 pages

Innovation

Disruptive innovation, a concept introduced by Clayton Christensen, describes how smaller companies with fewer resources can challenge established businesses by serving niche markets with affordable alternatives. Over time, these innovations improve and can displace traditional leaders, forcing established companies to adapt or risk becoming irrelevant. Industries such as telecommunications, transportation, and media have experienced significant disruption due to this phenomenon.

Uploaded by

finishedwalk
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Disruptive innovation is a term coined by Clayton Christensen in his 1997

book The Innovator's Dilemma to describe a process where a smaller


company with fewer resources successfully challenges established
businesses. This type of innovation is often overlooked by dominant market
players at first, as it typically starts by serving a niche market or offering a
more affordable, accessible alternative. However, over time, disruptive
innovations improve and eventually displace traditional leaders in the
industry.

At its core, disruptive innovation involves the creation of new markets or the
transformation of existing ones by introducing simpler, more affordable
solutions that appeal to a broader, often underserved population. For
example, the rise of personal computers in the 1980s disrupted the
computing industry, which was once dominated by large, expensive
mainframes and minicomputers. Personal computers were initially less
powerful and targeted toward individuals and small businesses, but as
technology advanced, they became more powerful and ultimately overtook
traditional computing systems in terms of popularity and capability.

One of the key characteristics of disruptive innovation is that it often begins


by addressing the needs of less demanding customers who are overlooked
by incumbents. This allows disruptive technologies to enter markets at a
lower cost, offering more affordable alternatives to existing products. These
innovations gradually gain traction and improve in quality, eventually
reaching a point where they meet the needs of mainstream consumers.

Another important aspect of disruptive innovation is that it often forces


established companies to rethink their business models or face the risk of
becoming irrelevant. Incumbents, who are typically focused on sustaining
innovations that improve their existing products for high-end customers, may
not notice the disruptive innovation until it has already gained significant
momentum. This gap between initial underestimation and eventual market
disruption can result in significant shifts in industry dynamics.

While disruptive innovation offers immense opportunities for smaller


companies, it also poses challenges for traditional businesses, forcing them
to adapt, innovate, or risk being overtaken. Industries that have seen
disruption include telecommunications, transportation (e.g., Uber and Lyft),
and media (e.g., streaming platforms disrupting traditional television
networks).
In conclusion, disruptive innovation is a powerful force that reshapes
industries by introducing affordable, accessible alternatives that evolve to
meet the needs of mainstream consumers. It challenges established
companies, encouraging them to innovate or risk obsolescence. As
technology and consumer expectations continue to evolve, disruptive
innovation will undoubtedly remain a key factor in shaping the future of
business.

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