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5 Examples ofDisruptive Innovation

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Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaksabout disruptive innovation and technological change.www.disruptiveinnovation.se

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Harvard professorClayton Christensencoined the termdisruptive innovation inhis book ’Theinnovator’s dilemma’,published in 1997.

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Harvard professorClayton Christensencoined the termdisruptive innovation inhis book ’Theinnovator’s dilemma’,published in 1997.This presentation givesfive illustrativeexamples of disruptiveinnovation.

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A disruptive innovation initially offers a lowerperformance according to what themainstream market has historically demanded.

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A disruptive innovation initially offers a lowerperformance according to what themainstream market has historically demanded.At the same time it provides some newperformance attributes, which in turn makes itprosper in a different market.

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A disruptive innovation initially offers a lowerperformance according to what themainstream market has historically demanded.At the same time it provides some newperformance attributes, which in turn makes itprosper in a different market.As it improves along the traditionalperformance parameters it eventually displacesthe former technology.

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For further detail on this concept, click here:http://www.slideshare.net/Christiansandstrom/disruptive-technologies-an-introduction

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Number 1:

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The Transistor Radio

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Transistor Radio Analogue RadioTraditionalperformanceNewperformance

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Transistor Radio Analogue RadioTraditional Worse soundperformanceNewperformance

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Transistor Radio Analogue RadioTraditional Worse soundperformanceNew Portableperformance Low Battery consumption

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Being portable and offering worse sound quality, thetransistor radio was adopted by teenagers who couldbring music to the beach.

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As the soundquality improved,it eventuallydisplaced theanalogue, bigfurniture radios.

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Number 2:

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Pocket calculators

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Pocket calculator Desktop calculatorTraditionalperformanceNewperformance

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Pocket calculator Desktop calculatorTraditional Worse computing performanceperformanceNewperformance

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Pocket calculator Desktop calculatorTraditional Worse computing performanceperformanceNew Portableperformance

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Over time, the computingperformance of these smaller,simpler calculators wasimproved.

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As they became cheaper and were sold in larger and largervolumes, sales offices lost their value. Calculators started tobe sold in bookstores and large retail stores.

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Number 3:

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LCD TV versus Cathod Ray Tube (CRT) TV

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LCD TV CRT TVTraditionalperformanceNewperformance

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LCD TV CRT TVTraditional Worse image qualityperformanceNewperformance

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LCD TV CRT TVTraditional Worse image qualityperformanceNew Low battery consumptionperformance Low weight

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LCD screens initially prospered in variousapplications where image quality wasn’t important.

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In mobile phones, portable video games and cameras,battery consumption and weight were more important.

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When the image quality had become good enough,they displaced CRT TVs in the 2000s.

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Number 4:

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Integrated steel mills VS minimills.Photo: www.jornmark.se

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Minimills Integrated millsTraditionalperformanceNewperformance

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Minimills Integrated millsTraditional Worse steel qualityperformanceNewperformance

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Minimills Integrated millsTraditional Worse steel qualityperformanceNew Cheaper, easier to produceperformance

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The minimill technology used scrap, put it in afurnace and made new steel of it.

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The minimill technology used scrap, put it in afurnace and made new steel of it.Cheap, low quality steel.

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The minimill technology used scrap, put it in afurnace and made new steel of it.Cheap, low quality steel.The integrated steel companies were morethan happy to get rid of this low-marginbusiness and instead focus on the high-end.

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The minimill technology used scrap, put it in afurnace and made new steel of it.Cheap, low quality steel.The integrated steel companies were morethan happy to get rid of this low-marginbusiness and instead focus on the high-end.So they did, but slowly and steadily, theminimill technology offered better steel qualityand captured segment after segment.

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Eventually, the integrated steel millsstarted to suffer, badly.

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Number 5:

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Mobile phones versus regular phones

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Cell phone Old phonesTraditionalperformanceNewperformance

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Cell phone Old phonesTraditional Worse sound qualityperformance ExpensiveNewperformance

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Cell phone Old phonesTraditional Worse sound qualityperformance ExpensiveNew Portableperformance

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As mobile phones became cheaper, the soundquality improved and new functions wereadded, it eventually displacedthe analogue phones.

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SourcesChristensen, C.M. (1997) The Innovator’sDilemma, Harvard Business School Press,Cambridge, Massachusetts.

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Find out more:www.disruptiveinnovation.se