Disruptive innovation describes innovations that create new markets by appealing to customers not served by existing products and eventually disrupting existing markets. It begins by targeting customers not valued by incumbent firms and later lowers prices in the existing market. In contrast, sustaining innovations improve existing products and allow firms to compete against each other. Clayton Christensen's research showed that disruptive innovations are often simpler combinations of existing technologies rather than new technologies. Disruptive innovations are enabled by new business models rather than technologies alone. Christensen distinguished between low-end and new-market disruption based on the customers targeted.
Presentation based on Harvard Business Review article: "What is Disruptive Innovation?", by Clayton M. Cristensen, Michael E. Raynor, and Rory McDonald – December, 2015 issue.
The theory of disruptive Innovation was introduced in the article: "Disruptive Technologies: Catching the Wave", by Joseph L. Bower and Clayton M. Christensen from the HBR january–february 1995 issue.
This presentation is on the theory of disruption by Clayton Christensen. While it is easy to explain why bad companies fail it is hard to understand how good companies, who are supposedly do everything right, fail in the end. The theory of disruption offers different ways of thinking to capture this phenomenon.
I explain the theoretical foundations and present a popular example of a new market disruption (the iphone). In the end the different key points of disruption are summarized.
HBR's 10 must reads on Innovation. The author is Peter Drucker, the founder of modern management. The most innovative business ideas come from methodically analyzing seven areas of opportunity. You have to identify the opportunity and need a leap of imagination to arrive at the right response.
The presentation analyses the strategy used by Nintendo which is one of the worlds leading brand in the video game industry. The case also discusses in detail strategy used by its competitor ATARI and it also analyses the different strategy used by Nintendo in both Japan and US.
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
Probable Solution to HBR Case on Aqualisa Quartz. The Presentation consists of info about Channel Distribution, Development of Quartz Shower Valve, UK Shower Market, Initial Sales Results, 4Ps of Marketing for Aqualisa, A shift in Marketing Strategy.
Presentation based on Harvard Business Review article: "What is Disruptive Innovation?", by Clayton M. Cristensen, Michael E. Raynor, and Rory McDonald – December, 2015 issue.
The theory of disruptive Innovation was introduced in the article: "Disruptive Technologies: Catching the Wave", by Joseph L. Bower and Clayton M. Christensen from the HBR january–february 1995 issue.
This presentation is on the theory of disruption by Clayton Christensen. While it is easy to explain why bad companies fail it is hard to understand how good companies, who are supposedly do everything right, fail in the end. The theory of disruption offers different ways of thinking to capture this phenomenon.
I explain the theoretical foundations and present a popular example of a new market disruption (the iphone). In the end the different key points of disruption are summarized.
HBR's 10 must reads on Innovation. The author is Peter Drucker, the founder of modern management. The most innovative business ideas come from methodically analyzing seven areas of opportunity. You have to identify the opportunity and need a leap of imagination to arrive at the right response.
The presentation analyses the strategy used by Nintendo which is one of the worlds leading brand in the video game industry. The case also discusses in detail strategy used by its competitor ATARI and it also analyses the different strategy used by Nintendo in both Japan and US.
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
Probable Solution to HBR Case on Aqualisa Quartz. The Presentation consists of info about Channel Distribution, Development of Quartz Shower Valve, UK Shower Market, Initial Sales Results, 4Ps of Marketing for Aqualisa, A shift in Marketing Strategy.
It is related to apple Inc. Vision & Mission Statement:
There are no official or written statements of vision or mission on apple website but different statements of CEO or press release may be the vision or mission of Apple. There is no specific area for vision and mission as there are no clarifications about the vision and mission.
VISION STATEMENT : (Future positon ideas)
We strive to provide users of Apple products the best experiences possible though innovative product designs and software
MISSION STATEMENT:
Not all market shares are equal, and Apple has never been about the most; we are about being the best.
We believe that we are on the face of the earth to make great products and that’s not changing.
We are constantly focusing on innovating.
We believe in the simple not the complex. (only selected initial 3 statement by Tim)SWOT ANALYSIS:
STRENGTHS:
Safety of personal data.
Pioneer in the personal desktop computer.
Max market capitalization.
High performance production line with products like iphone, ipad, ipd, mac computer.
WEAKNESS:
15% global market show.
Significantly expensive.
Not compatible with many software and windows machine
Late production of Larger screen in smart phone.
OPPERTUNITIES:
Apple pays finger prints
In-house credit system
Product diversification
Formation of strategic partnerships
THREATS
Patent infringement
Reverse packaging
Quality problems with negative effects on sales and Apple brand image
Intense competition like Samsung, Lenovo, Chinese companies in smart phone. Dell, Sony and Toshiba in PCs.
Rising popularity of Google Android may affect its market share.
Disruptive Innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors.
The “science of human action” and “market-based management” (MBM) form the core
ideas of the libertarian business philosophy and the successful commercial operating
principles of Charles G. Koch, chairman and CEO of Koch Industries Inc. (KII).
Following these principles, Koch has enjoyed astounding success: A $1,000 investment
in KII in 1960 would now be worth $2 million (with a reinvestment of dividends). During
most of this period, Koch himself planned KII’s strategy and ran the company. Here, with
a few jargon pitfalls, he details his business methods and operating practices. Koch is
known for his heavy financial support of conservative political causes and candidates,
but this is not a political book. It is, in fact, more a work of business philosophy than a
hands-on manual for Koch’s MBM system, which he describes as an approach and attitude based on a selection of “mental models” and not as a linear path.
I recommend Koch’s thoughtful exposition to all 80,000 KII employees and to business executives who want some clues about emulating KII’s success.
In The Innovation Secrets of Steve Jobs, business journalist Carmine Gallo describes the seven principles that form the philosophical core of master innovator, Steve Jobs. Although there is only one Steve Jobs, studying and following these principles can inspire creativity and the ability to ‘think different’
in any profession or workplace. Among these principles are the importance of following one’s heart and pursuing one’s passion, as well as the importance of seeking out new experiences. Innovations occur by making connections between unexpected things, and this ability is rooted in a life filled with a wide range
of experiences. Simplicity is also crucial, because anything
which is more complicated than it needs to be will attract a narrower audience. Also important is the ability to communicate the importance and utility of one’s innovation, or tell its story, effectively.
The theory of disruptive innovation has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star; so do many executives at large, well-established organizations, including Intel, Southern New Hampshire University, and Salesforce.
But just what is Disruptive Innovation? Which companies are considered to be causing "disruption"?
In this meetup, we will explore the basic tenets of disruptive innovation. Then we will look at some of today's companies and their services and discuss if they are disruptive or not.
Lastly, we will look a bit deeper into the theory and see if what we have learned so far allows us to more accurately predict which businesses will grow.
An interesting summary of the key takeaways from the famous innovation management book "The innovator's dilemma". The book won Global Business Book Award and was the best business book of the year in 1997.
Crafting Brand Positioning.Philips case study.
This presentation was made during an internship under the guidance of prof.Sameer Mathur from IIM Lucknow.
Design Thinking and Innovation at Apple IncSHREYANSH VATS
The following presentation is based on a case on Apple Inc about how Apple goes about implementing innovation and design thinking at their firm, and how there's a shift with the arrival of Tim Cook. The case was a part of our course called BusinessInnovation in New Environment (BINE)
It is related to apple Inc. Vision & Mission Statement:
There are no official or written statements of vision or mission on apple website but different statements of CEO or press release may be the vision or mission of Apple. There is no specific area for vision and mission as there are no clarifications about the vision and mission.
VISION STATEMENT : (Future positon ideas)
We strive to provide users of Apple products the best experiences possible though innovative product designs and software
MISSION STATEMENT:
Not all market shares are equal, and Apple has never been about the most; we are about being the best.
We believe that we are on the face of the earth to make great products and that’s not changing.
We are constantly focusing on innovating.
We believe in the simple not the complex. (only selected initial 3 statement by Tim)SWOT ANALYSIS:
STRENGTHS:
Safety of personal data.
Pioneer in the personal desktop computer.
Max market capitalization.
High performance production line with products like iphone, ipad, ipd, mac computer.
WEAKNESS:
15% global market show.
Significantly expensive.
Not compatible with many software and windows machine
Late production of Larger screen in smart phone.
OPPERTUNITIES:
Apple pays finger prints
In-house credit system
Product diversification
Formation of strategic partnerships
THREATS
Patent infringement
Reverse packaging
Quality problems with negative effects on sales and Apple brand image
Intense competition like Samsung, Lenovo, Chinese companies in smart phone. Dell, Sony and Toshiba in PCs.
Rising popularity of Google Android may affect its market share.
Disruptive Innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves upmarket, eventually displacing established competitors.
The “science of human action” and “market-based management” (MBM) form the core
ideas of the libertarian business philosophy and the successful commercial operating
principles of Charles G. Koch, chairman and CEO of Koch Industries Inc. (KII).
Following these principles, Koch has enjoyed astounding success: A $1,000 investment
in KII in 1960 would now be worth $2 million (with a reinvestment of dividends). During
most of this period, Koch himself planned KII’s strategy and ran the company. Here, with
a few jargon pitfalls, he details his business methods and operating practices. Koch is
known for his heavy financial support of conservative political causes and candidates,
but this is not a political book. It is, in fact, more a work of business philosophy than a
hands-on manual for Koch’s MBM system, which he describes as an approach and attitude based on a selection of “mental models” and not as a linear path.
I recommend Koch’s thoughtful exposition to all 80,000 KII employees and to business executives who want some clues about emulating KII’s success.
In The Innovation Secrets of Steve Jobs, business journalist Carmine Gallo describes the seven principles that form the philosophical core of master innovator, Steve Jobs. Although there is only one Steve Jobs, studying and following these principles can inspire creativity and the ability to ‘think different’
in any profession or workplace. Among these principles are the importance of following one’s heart and pursuing one’s passion, as well as the importance of seeking out new experiences. Innovations occur by making connections between unexpected things, and this ability is rooted in a life filled with a wide range
of experiences. Simplicity is also crucial, because anything
which is more complicated than it needs to be will attract a narrower audience. Also important is the ability to communicate the importance and utility of one’s innovation, or tell its story, effectively.
The theory of disruptive innovation has proved to be a powerful way of thinking about innovation-driven growth. Many leaders of small, entrepreneurial companies praise it as their guiding star; so do many executives at large, well-established organizations, including Intel, Southern New Hampshire University, and Salesforce.
But just what is Disruptive Innovation? Which companies are considered to be causing "disruption"?
In this meetup, we will explore the basic tenets of disruptive innovation. Then we will look at some of today's companies and their services and discuss if they are disruptive or not.
Lastly, we will look a bit deeper into the theory and see if what we have learned so far allows us to more accurately predict which businesses will grow.
An interesting summary of the key takeaways from the famous innovation management book "The innovator's dilemma". The book won Global Business Book Award and was the best business book of the year in 1997.
Crafting Brand Positioning.Philips case study.
This presentation was made during an internship under the guidance of prof.Sameer Mathur from IIM Lucknow.
Design Thinking and Innovation at Apple IncSHREYANSH VATS
The following presentation is based on a case on Apple Inc about how Apple goes about implementing innovation and design thinking at their firm, and how there's a shift with the arrival of Tim Cook. The case was a part of our course called BusinessInnovation in New Environment (BINE)
Slides from my keynote w/ Capgemini in Copenhagen - looking at how Microsoft, GE, KLM and Uber use Salesforce Marketing Cloud to innovate, disrupt and build customer relationships faster.
A brief description of the Clayton Christensen's concept of disruptive technology and how it helps us to understand why companies go bankrupt under conditions of technological change.
25 Disruptive Technology Trends 2015 - 2016Brian Solis
Brian Solis explores some of the biggest technology trends and possible twists on the horizon for 2015 and 2016.
Topics include cyber security, mobile payments, drones, bitcoin, social media, digital, omnichannel, attribution, cx, music, movies, Hollywood
26 Disruptive & Technology Trends 2016 - 2018Brian Solis
Introducing the “26 Disruptive Technology Trends for 2016 – 2018.” In this report, we’ll explore some of the disruptive trends that are affecting pretty much everything over the next few years at least those that I’m following. It’s not just tech, though. The report is organized by socioeconomic and technological impact.
Obviously, this is not an exhaustive list of every technology and societal trend bringing about disruption on planet Earth. What follows thought definitely affects the evolution of digital Darwinism, the evolution of society and technology and its impact on behavior, expectations and customs.
How To Plan And Build A Successful Content Marketing StrategyMichael Brenner
http://www.b2bmarketinginsider.com/content-marketing/plan-build-successful-content-marketing-strategy -- Did you know that every day on the internet:
There are 4.75 Billion pieces of content shared
There are 1.8 Billion photos uploaded
There are 700 Million Snapchats
There are 500 Million tweets
Marketing, as we know it, is being transformed right in front of our eyes. More and more messages are being promoted every day, on more channels, and as a result, consumers are learning to simply tune out the noise.
Because of this, brands must leverage content marketing to deliver the useful information necessary to educate and build trust with their audiences. But they often fail to document what they are trying to achieve, how they will get it done, and what measures will prove success.
Yesterday I presented to more than 600 attendees of the NewsCred #ThinkContent Webinar: "How To Plan And Build A Successful Content Marketing Strategy." I presented:
The key factors for content marketing success
The core components of a content marketing strategy
I answered the main questions of how to build a solid content marketing strategy
I shared my secret that effective content marketing was relatively simple:
"The buyer journey is nothing more than a series of questions that must be answered." ~ IDC
I shared the Content Marketing Institute's more formal definition of content marketing:
“Content marketing is the marketing and business process for creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience – with the objective of driving profitable customer action.” ~ Content Marketing Institute
And I shared the rallying cry for why we need to change:
"We have to stop interrupting what people are interested in, and be what people are interested in." ~ Craig Davis (former Chief Creative Office - J. Walter Thompson)
Backed by research and our own customer engagements, I covered
The 6 factors to content marketing success:
Document content strategy
Have someone in charge of content
Consistently publish quality content
Map content to buyer journey
Balance Paid, Owned, Earned Media
Track Content Marketing ROI
I provided an example and a template for anyone to develop:
Your Content Marketing Mission Statement
Become a destination for [target audience] interested in [topics]. To help them [customer value].
This will help us [your content marketing goals]
Earn your audience’s attention vs. just buying it
Reach, engage and convert NEW buyers
AmEx Open Forum Example: Help Small Businesses Do More Business. To become the largest source of inbound leads.
I provided spreadsheets to help anyone conduct a content audit and measure their content marketing results:
170C h a p t e r12 innovation with it1It is well k.docxherminaprocter
170
C h a p t e r
12 innovation with it1
It is well known that innovation with IT enables new business models (e.g., Amazon, iTunes), new products and services (e.g., tablets, mobile banking), new or improved processes (e.g., ERP, supply chain), and cost savings (e.g., self-service, offshore
sourcing). Yet, such innovation is still very much a hit-or-miss proposition. For as
many successful innovations as there are with technology, there are an equal or greater
number of failures. Furthermore, although it is possible to do many innovative things
with technology, it is much more difficult to find the ones that will deliver real and sus-
tainable value to an organization.
IT organizations have always been expected to improve what is currently being
done but it is much more difficult to undertake something that is different from what has
traditionally been done. When innovating with technology, not only must the market
be ready for the innovation (i.e., timing), but also network effects and complementary
products and services must be available for it to succeed (e.g., one telephone is not
very useful; mobile banking failed before the introduction of smart phones). Finally,
many innovations fail because an organization’s culture cannot sustain or exploit
them (e.g., Kodak with digital imaging). In short, successful innovation is still a bit of
a mystery and many IT leaders are trying to explore how best to operationalize it to
deliver real business value.
This chapter explores innovation—an organization’s need to reinvent its products
and services and occasionally itself—with a focus on IT-enabled innovation. We begin
by examining why innovation is critical, and how/why IT is driving most innova-
tion today. Following this, we examine various types of innovation. Then we present a
typical innovation life cycle and examine some of the challenges encountered by orga-
nizations when attempting to achieve innovation. In the final section of this chapter, we
offer advice for managing IT-enabled innovation.
1 This chapter is based on the authors’ previously published article, McKeen, J. D., and H. A. Smith. “Strategic
Experimentation with IT.” Communications of the Association for Information Systems 19, article 8 (January 2007):
132–41. Reproduced by permission of the Association for Information Systems.
Chapter 12 • Innovation with IT 171
The Need for INNovaTIoN: aN hIsTorIcal PersPecTIve
It is well-established that the need to innovate is necessary for long-term organiza-
tional survival (Christensen and Raynor 2003; Hamel and Välikangas 2003). According
to Christensen (1997), there are two types of innovation: sustaining and disruptive.
Sustaining innovation improves an existing product or enhances an existing service for
an existing customer. In contrast, disruptive innovation targets noncustomers and deliv-
ers a product or service that fundamentally differs from the current product portfolio.
Sustaining.
Globalization intensified competition in most industries. This came at a time when firms competing in mature markets were experiencing increased difficulty to grow revenues in their home markets. As a result, firms were forced to focus on cost reduction as a means to increase shareholder value. Firms also felt an increased dependence on suppliers for value creation.
In business theory, a disruptive innovation is an innovation that creates a new market and value network and eventually displaces established market-leading firms, products, and alliances
There is a key type of innovation for a web startup?Fabio Miceli
There is a key type of innovation for a web startup? An analysis through the most successful internet companies.
We always talk about innovation that can disrupt the market. But do we really need it? Are the most
important companies in the internet industry based on a disruptive innovation? Or should we rather
concentrate on just improve existing products on existing markets pursuing sustaining innovation?
After a brief introduction with a classification of different types of innovations, in order to answer
these questions this paper will analyze three of the most important companies in different areas of
internet. Such as Google for search, Facebook for social networking and Amazon for e-commerce,
hence we will try to understand whether there is a predominant type of innovation source of such a
huge success.
As a result we will discover that a start up must provide disruptive innovation to succeed. Moreover
there is an interlinked relevance among disruptive innovation and the innovation object, led by a
new product, a new process or a new business model.
When deciding how to respond to a threatening new entrant, companies often assume that they are facing a disruption, that is, an innovation that allows upstarts to build a new market from the bottom up. But new products and services can enter your market from other directions, each distinct in terms of how, where, and when it affects your business. They are all market dislocations -- radical breakaways that create new markets and make old markets obsolete. Instead of acting rashly, incumbents should take a step back, diagnose the type of dislocation they are facing, and respond with the appropriate tools and strategies.
Chapter 3 types and patterns of innovationMuhammad Anang
The path a technology follows through time is termed its technology trajectory. Technology trajectories are most often used to represent the technology’s rate of performance improvement or its rate of adoption in the marketplace.
1. Disruptive innovation
A disruptive innovation is an innovation that helps cre-
ate a new market and value network, and eventually dis-
rupts an existing market and value network (over a few
years or decades), displacing an earlier technology. The
term is used in business and technology literature to de-
scribe innovations that improve a product or service in
ways that the market does not expect, typically first by
designing for a different set of consumers in a new mar-
ket and later by lowering prices in the existing market.
In contrast to disruptive innovation, a sustaining inno-
vation does not create new markets or value networks
but rather only evolves existing ones with better value,
allowing the firms within to compete against each other’s
sustaining improvements. Sustaining innovations may be
either “discontinuous”[1]
(i.e. “transformational” or “rev-
olutionary”) or “continuous” (i.e. “evolutionary”).
Sustaining innovations are typically innovations in tech-
nology, whereas disruptive innovations cause changes to
markets. For example, the automobile was a revolution-
ary technological innovation, but it was not a disrup-
tive innovation, because early automobiles were expen-
sive luxury items that did not disrupt the market for horse-
drawn vehicles. The market for transportation essentially
remained intact until the debut of the lower priced Ford
Model T in 1908.[2]
The mass-produced automobile was a
disruptive innovation, because it changed the transporta-
tion market. The automobile, by itself, was not.
The current theoretical understanding of disruptive in-
novation is different from what might be expected by
default, an idea that Clayton M. Christensen called the
“technology mudslide hypothesis”. This is the simplis-
tic idea that an established firm fails because it does
not “keep up technologically” with other firms. In this
hypothesis, firms are like climbers scrambling upward
on crumbling footing, where it takes constant upward-
climbing effort just to stay still, and any break from the
effort (such as complacency born of profitability) causes
a rapid downhill slide. Christensen and colleagues have
shown that this simplistic hypothesis is wrong; it does not
model reality. What they have shown is that good firms
are usually aware of the innovations, but their business
environment does not allow them to pursue them when
they first arise, because they are not profitable enough at
first and because their development can take scarce re-
sources away from that of sustaining innovations (which
are needed to compete against current competition). In
Christensen’s terms, a firm’s existing value networks place
insufficient value on the disruptive innovation to allow its
pursuit by that firm. Meanwhile, start-up firms inhabit
different value networks, at least until the day that their
disruptive innovation is able to invade the older value net-
work. At that time, the established firm in that network
can at best only fend off the market share attack with a
me-too entry, for which survival (not thriving) is the only
reward.[3]
The work of Christensen and others during the 2000s has
addressed the question of what firms can do to avoid dis-
placement brought on by technological disruption.
1 History and usage of the term
The term disruptive technologies was coined by Clayton
M. Christensen and introduced in his 1995 article Dis-
ruptive Technologies: Catching the Wave,[4]
which he co-
wrote with Joseph Bower. The article is aimed at man-
aging executives who make the funding/purchasing de-
cisions in companies rather than the research commu-
nity. He describes the term further in his book The In-
novator’s Dilemma.[5]
Innovator’s Dilemma explored the
cases of the disk drive industry (which, with its rapid gen-
erational change, is to the study of business what fruit
flies are to the study of genetics, as Christensen was ad-
vised in the 1990s[6]
) and the excavating equipment in-
dustry (where hydraulic actuation slowly displaced cable-
actuated movement). In his sequel with Michael E
Raynor, The Innovator’s Solution,[7]
Christensen replaced
the term disruptive technology with disruptive innovation
because he recognized that few technologies are intrinsi-
cally disruptive or sustaining in character; rather, it is the
business model that the technology enables that creates
the disruptive impact. However, Christensen’s evolution
from a technological focus to a business modelling fo-
cus is central to understanding the evolution of business
at the market or industry level. Christensen and Mark
W. Johnson, who co-founded the management consult-
ing firm Innosight, described the dynamics of “business
model innovation” in the 2008 Harvard Business Review
article “Reinventing Your Business Model”.[8]
The con-
cept of disruptive technology continues a long tradition
of the identification of radical technical change in the
study of innovation by economists, and the development
of tools for its management at a firm or policy level.
In the late 1990s, the automotive sector began to embrace
a perspective of “constructive disruptive technology” by
working with a consultant David E. O’Ryan, whereby
the use of current off-the-shelf technology was integrated
with newer innovation to create what he called “an unfair
1
2. 2 2 THE THEORY
advantage”. The process or technology change as a whole
had to be “constructive” in improving the current method
of manufacturing, yet disruptively impact the whole of
the business case model, resulting in a significant reduc-
tion of waste, energy, materials, labor or legacy costs to
the user.
In keeping with the insight that what matters economi-
cally is the business model, not the technological sophis-
tication itself, Christensen’s theory explains why many
disruptive innovations are not “advanced technologies”,
which the technology mudslide hypothesis would lead one
to expect. Rather, they are often novel combinations of
existing off-the-shelf components, applied cleverly to a
small, fledgling value network.
2 The theory
Christensen defines a disruptive innovation as a product
or service designed for a new set of customers.
“Generally, disruptive innovations were
technologically straightforward, consisting of
off-the-shelf components put together in a
product architecture that was often simpler
than prior approaches. They offered less of
what customers in established markets wanted
and so could rarely be initially employed there.
They offered a different package of attributes
valued only in emerging markets remote from,
and unimportant to, the mainstream.”[9]
Christensen argues that disruptive innovations can hurt
successful, well managed companies that are responsive
to their customers and have excellent research and de-
velopment. These companies tend to ignore the markets
most susceptible to disruptive innovations, because the
markets have very tight profit margins and are too small
to provide a good growth rate to an established (sizable)
firm.[10]
Thus, disruptive technology provides an exam-
ple of when the common business-world advice to "focus
on the customer" (“stay close to the customer,” “listen to
the customer”) can sometimes be strategically counter-
productive.
While Christensen argued that disruptive innovations can
hurt successful, well managed companies, O’Ryan coun-
tered that “constructive” integration of existing, new, and
forward thinking innovation could improve the economic
benefits of these same well managed companies, once de-
cision making management understood the systemic ben-
efits as a whole.
Christensen distinguishes between “low-end disruption"
which targets customers who do not need the full perfor-
mance valued by customers at the high end of the mar-
ket and “new-market disruption” which targets customers
who have needs that were previously unserved by existing
incumbents.[11]
How low-end disruption occurs over time.
“Low-end disruption” occurs when the rate at which
products improve exceeds the rate at which customers can
adopt the new performance. Therefore, at some point the
performance of the product overshoots the needs of cer-
tain customer segments. At this point, a disruptive tech-
nology may enter the market and provide a product which
has lower performance than the incumbent but which ex-
ceeds the requirements of certain segments, thereby gain-
ing a foothold in the market.
In low-end disruption, the disruptor is focused initially on
serving the least profitable customer, who is happy with a
good enough product. This type of customer is not willing
to pay premium for enhancements in product functional-
ity. Once the disruptor has gained a foothold in this cus-
tomer segment, it seeks to improve its profit margin. To
get higher profit margins, the disruptor needs to enter the
segment where the customer is willing to pay a little more
for higher quality. To ensure this quality in its product,
the disruptor needs to innovate. The incumbent will not
do much to retain its share in a not so profitable segment,
and will move up-market and focus on its more attrac-
tive customers. After a number of such encounters, the
incumbent is squeezed into smaller markets than it was
previously serving. And then finally the disruptive tech-
nology meets the demands of the most profitable segment
and drives the established company out of the market.
“New market disruption” occurs when a product fits a new
or emerging market segment that is not being served by
existing incumbents in the industry.
The extrapolation of the theory to all aspects of life has
been challenged,[12]
as has the methodology of relying on
selected case studies as the principal form of evidence.[12]
Jill Lepore points out that some companies identified by
the theory as victims of disruption a decade or more ago,
rather than being defunct, remain dominant in their in-
dustries today (including Seagate Technology, U.S. Steel,
and Bucyrus).[12]
Lepore questions whether the theory
has been oversold and misapplied, as if it were able to
explain everything in every sphere of life, including not
just business but education and public institutions.[12]
3. 3
3 Disruptive technology
In 2009, Milan Zeleny described the high technology as
disruptive technology and raised the question what is be-
ing disrupted during this process. The answer, according
to Zeleny, is the support network of high technology.[13]
For example, introducing electric cars disrupts the sup-
port network for gasoline cars (network of gas and service
stations). Such disruption is fully expected and therefore
effectively resisted by support net owners. In the long run,
high (disruptive) technology either bypasses, upgrades or
replaces the outdated support network.
Technology, being a form of social relationship, always
evolves. No technology remains fixed. Technology starts,
develops, persists, mutates, stagnates and declines – just
like living organisms.[14]
The evolutionary life-cycle oc-
curs in the use and development of any technology. A
new high technology core emerges and challenges ex-
isting Technology Support Nets which are thus forced
to co-evolve with it. New versions of the core are be-
ing designed and fitted into an increasingly appropriate
TSN, with smaller and smaller high-technology effects.
High technology becomes just regular technology, with
more efficient versions fitting the same support net. Fi-
nally, even the efficiency gains diminish, emphasis shifts
to product tertiary attributes (appearance, style) and tech-
nology becomes TSN-preserving appropriate technology.
This technological equilibrium state becomes established
and fixated, resisting being interrupted by a technological
mutation – new high technology appears and the cycle is
repeated.
Regarding this evolving process of technology,
Christensen said:
“The technological changes that damage
established companies are usually not radically
new or difficult from a technological point of
view. They do, however, have two important
characteristics: First, they typically present a
different package of performance attributes—
ones that, at least at the outset, are not val-
ued by existing customers. Second, the per-
formance attributes that existing customers do
value improve at such a rapid rate that the new
technology can later invade those established
markets.”[15]
Joseph Bower[16]
explained the process of how disruptive
technology, through its requisite support net, dramatically
transforms a certain industry.
“When the technology that has the poten-
tial for revolutionizing an industry emerges,
established companies typically see it as
unattractive: it’s not something their main-
stream customers want, and its projected profit
margins aren’t sufficient to cover big-company
cost structure. As a result, the new technol-
ogy tends to get ignored in favor of what’s cur-
rently popular with the best customers. But
then another company steps in to bring the in-
novation to a new market. Once the disruptive
technology becomes established there, smaller-
scale innovation rapidly raise the technology’s
performance on attributes that mainstream cus-
tomers’ value.”[17]
The automobile was high technology with respect to the
horse carriage; however, it evolved into technology and fi-
nally into appropriate technology with a stable, unchang-
ing TSN. Main high-technology advance in the offing is
some form of electric car – whether the energy source is
the sun, hydrogen, water, air pressure or traditional charg-
ing outlet. Electric cars preceded the gasoline automobile
by many decades and now it returns to people’s life to re-
place the traditional gasoline automobile.
Milan Zeleny described the above phenomenon.[18]
He
also wrote that:
“Implementing high technology is often re-
sisted. This resistance is well understood on
the part of active participants in the requisite
TSN. The electric car will be resisted by gas-
station operators in the same way automated
teller machines (ATMs) were resisted by bank
tellers and automobiles by horsewhip makers.
Technology does not qualitatively restructure
the TSN and therefore will not be resisted and
never has been resisted. Middle management
resists business process reengineering because
BPR represents a direct assault on the sup-
port net (coordinative hierarchy) they thrive
on. Teamwork and multi-functionality is re-
sisted by those whose TSN provides the com-
fort of narrow specialization and command-
driven work.”[19]
4 High-technology effects
High technology is a technology core that changes the
very architecture (structure and organization) of the com-
ponents of the technology support net. High technol-
ogy therefore transforms the qualitative nature of tasks of
TSN and their relations, as well as their requisite physi-
cal, energy and information flows. It also affects the skills
required, the roles played, the styles of management and
coordination – the organizational culture itself.
This kind of technology core is different from regular
technology core, which preserves the qualitative nature
of flows and the structure of the support and only al-
lows users to perform the same tasks in the same way,
but faster, more reliably, in larger quantities, or more ef-
ficiently. It is also different from appropriate technol-
4. 4 8 NOTES
ogy core, which preserves the TSN itself with the pur-
pose of technology implementation and allows users to
do the same thing in the same way at comparable lev-
els of efficiency, instead of improving the efficiency of
performance.[20]
Based on the framework, modern information and
knowledge-based technologies currently tend to be high
technologies with high-technology effects. They inte-
grate task, labor and knowledge, transcend classical sep-
aration of mental and manual work, enhance systems
aspects, and promote self-reliance, self-service, innova-
tion and creativity.[21]
In comparison, the “low” technolo-
gies, no matter how new, complex or advanced, are those
which still require the dividing and splintering of task, la-
bor and knowledge, increase specialization, promote di-
vision and dependency, sustain intermediaries and dimin-
ish initiative.
As for the difference between high technology and low
technology, Milan Zeleny once said:
" The effects of high technology always
breaks the direct comparability by changing
the system itself, therefore requiring new mea-
sures and new assessments of its productivity.
High technology cannot be compared and eval-
uated with the existing technology purely on
the basis of cost, net present value or return
on investment. Only within an unchanging and
relatively stable TSN would such direct finan-
cial comparability be meaningful. For exam-
ple, you can directly compare a manual type-
writer with an electric typewriter, but not a
typewriter with a word processor. Therein lays
the management challenge of high technology.
"[22]
However, not all modern technologies are high technolo-
gies. They have to be used as high technologies, function
as such, and be embedded in their requisite TSNs. They
have to empower the individual because only through the
individual can they empower knowledge. Not all infor-
mation technologies have integrative effects. Some in-
formation systems are still designed to improve the tra-
ditional hierarchy of command and thus preserve and
entrench the existing TSN. The administrative model of
management, for instance, further aggravates division of
task and labor, further specializes knowledge, and sepa-
rates management from workers and concentrates infor-
mation and knowledge in centers.
As knowledge surpasses capital, labor and raw materi-
als as the dominant economic resource, technologies are
also starting to reflect this shift. Technologies are rapidly
shifting from centralized hierarchies to distributed net-
works. Nowadays knowledge is not residing in a super-
mind, super-book or super-database, but a complex re-
lational pattern of networks brought forth to coordinate
human action.
5 Practical example of disruption
In the practical world, the popularization of personal
computers illustrates how the knowledge contributes to
the ongoing technology innovation. The original cen-
tralized concept (one computer, many persons) is a
knowledge-defying idea of the computing prehistory and
its inadequacies and failures have become clearly ap-
parent. The era of personal computing brought power-
ful computers “on every desk” (one person, one com-
puter). This short and transitional period was necessary
for getting used to the new computing environment, but
was inadequate from the knowledge-producing vantage
point. Adequate knowledge creation and management
come mainly from networking and distributed comput-
ing: one person, many computers. Each person’s com-
puter must form an access to the entire computing land-
scape or ecology through the Internet of other comput-
ers, databases, mainframes, as well as production, dis-
tribution and retailing facilities, etc. For the first time
our technology empowers individuals rather than exter-
nal hierarchies. It transfers influence and power where it
optimally belongs: at the loci of the useful knowledge.
Even though hierarchies and bureaucracies do not inno-
vate, free and empowered individuals do; knowledge, in-
novation, spontaneity and self-reliance are becoming in-
creasingly valued and promoted.[23]
6 Examples of disruptive innova-
tions
7 See also
• Blue Ocean Strategy
• Creative destruction
• Killer application
• Leapfrogging
• List of emerging technologies
• Obsolescence
• Paradigm shift
• Technology strategy
8 Notes
[1] Christensen 1997, p. xviii. Christensen describes as “rev-
olutionary” innovations as “discontinuous” “sustaining in-
novations”.
[2] Christensen 2003, p. 49.
[3] Christensen 1997, p. 47.
5. 5
[4] Bower, Joseph L. & Christensen, Clayton M. (1995).
However the concept of new technologies leading to
wholesale economic change is not a new idea since Joseph
Schumpeter adapted the idea of creative destruction from
Karl Marx. Schumpeter (1949) in one of his examples
used “the railroadization of the Middle West as it was ini-
tiated by the Illinois Central”. He wrote, “The Illinois
Central not only meant very good business whilst it was
built and whilst new cities were built around it and land
was cultivated, but it spelled the death sentence for the
[old] agriculture of the West."["Disruptive Technologies:
Catching the Wave” Harvard Business Review, January–
February 1995
[5] Christensen 1997.
[6] Christensen 1997, p. 3.
[7] Christensen 2003.
[8] Johnson, Mark, Christensen, Clayton, et al., 2008, “Rein-
venting Your Business Model, Harvard Business Review,
December 2008.
[9] Christensen 1997, p. 15.
[10] Christensen 1997, p. i-iii.
[11] Christensen 2003, p. 23-45.
[12] Lepore, Jill (2014-06-23), “Annals of enterprise: The
disruption machine: What the gospel of innovation gets
wrong.”, The New Yorker. Published online 2014-06-17
under the headline 'What the Theory of “Disruptive Inno-
vation” Gets Wrong'.
[13] Zeleny, Milan. “High Technology and Barriers to Innova-
tion: From Globalization to Localization”. International
Journal of Information Technology & Decision Making
(World Scientific) 11: P 441.
[14] Oliver, Gassmann (May 2006). “Opening up the innova-
tion process: towards an agenda”. R&D Management 36
(03): P 223–366. doi:10.1111/j.1467-9310.2006.00437.
[15] Christensen, Clayton (January 1995). “Disruptive Tech-
nologies Catching the Wave”. Harvard Business Review:
P 3.
[16] “HBS Faculty & Research”.
[17] Bower, Joseph (May 2002). “Disruptive Change”. Har-
vard Business Review 80 (05): P 95–101.
[18] Zeleny, Milan (January 2009). “Technology and High
Technology: Support Net and Barriers to Innovation”.
Advanced Management Systems 01 (01): P 8–21.
[19] Zeleny, Milan (September 2009). “Technology and High
Technology: Support Net and Barriers to Innovation”.
Acta Mechanica Slovaca 36 (01): P 6–19.
[20] Masaaki, Kotabe; Scott Swan (January 2007). “The
role of strategic alliances in high-technology new prod-
uct development”. Strategic Management Journal 16 (08).
doi:10.1002/smj.4250160804.
[21] Manyika, James (May 2013). “Disruptive technologies:
Advances that will transform life, business, and the global
economy”. McKinsey Global Institute.
[22] Zeleny, Milan (2006). “Knowledge-information autopoi-
etic cycle: towards the wisdom systems”. International
Journal of Management and Decision Making 7 (1): P 3–
18. doi:10.1504/IJMDM.2006.008168.
[23] Brown, Brad (March 2014). “Views from the front lines
of the data-analytics revolution”. McKinsey Quarterly.
[24] Bosman, Julie (13 March 2012). “After 244 Years, En-
cyclopaedia Britannica Stops the Presses”. The New York
Times. Retrieved 1 April 2012.
[25] Tartakoff, Joseph. “Victim Of Wikipedia: Microsoft To
Shut Down Encarta”. paidContent. Retrieved 1 April
2012.
[26] Sandström, Christian G. (2010). “A revised perspective
on Disruptive Innovation – Exploring Value, Networks
and Business models (Theisis submitted to Chalmers Uni-
versity of Technology, Göteborg, Sweden)" (PDF). Re-
trieved 2010-11-22.
[27] Christensen 1997, p. 3-28.
[28] Christensen 1997, pp. 61–76.
[29] Christensen 2003, pp. 37–39.
[30] Christensen 2003, p. 64.
[31] Knopper, Steve (2009). Appetite for self-destruction : the
spectacular crash of the record industry in the digital age.
New York: Free Press. ISBN 1-4165-5215-4.
[32] “Concorde grounded for good”. BBC News, 10 April
2003. 10 April 2003. Retrieved 4 May 2012.
9 References
• Anthony, Scott D.; Johnson, Mark W.; Sinfield,
Joseph V.; Altman, Elizabeth J. (2008). Innovator’s
Guide to Growth - Putting Disruptive Innovation to
Work. Harvard Business School Press. ISBN 978-
1-59139-846-2.
• How to Identify and Build Disruptive New Busi-
nesses, MIT Sloan Management Review Spring 2002
• Christensen, Clayton M. (1997), The innovator’s
dilemma: when new technologies cause great firms
to fail, Boston, Massachusetts, USA: Harvard Busi-
ness School Press, ISBN 978-0-87584-585-2. (edit)
• Christensen, Clayton M. & Overdorf, Michael.
(2000). “Meeting the Challenge of Disruptive
Change” Harvard Business Review, March–April
2000.
6. 6 11 EXTERNAL LINKS
• Christensen, Clayton M., Bohmer, Richard, &
Kenagy, John. (2000). “Will Disruptive Innova-
tions Cure Health Care?" Harvard Business Review,
September 2000.
• Christensen, Clayton M. (2003). The innovator’s
solution : creating and sustaining successful growth.
Harvard Business Press. ISBN 978-1-57851-852-4.
• Christensen, Clayton M.; Anthony, Scott D.; Roth,
Erik A. (2004). Seeing What’s Next. Harvard Busi-
ness School Press. ISBN 978-1-59139-185-2.
• Christensen, Clayton M., Baumann, Heiner, Rug-
gles, Rudy, & Sadtler, Thomas M. (2006). “Disrup-
tive Innovation for Social Change” Harvard Business
Review, December 2006.
• Mountain, Darryl R., Could New Technologies
Cause Great Law Firms to Fail?
• Mountain, Darryl R. (2006). Disrupting conven-
tional law firm business models using document as-
sembly, International Journal of Law and Informa-
tion Technology 2006; doi:10.1093/ijlit/eal019
• Tushman, M.L.; Anderson, P. (1986). “Techno-
logical Discontinuities and Organizational Environ-
ments”. Administrative Science Quarterly 31: 439–
465. doi:10.2307/2392832.
• Eric Chaniot (2007). “The Red Pill of Technology
Innovation” Red Pill, October 2007.
10 Further reading
• Danneels, Erwin (2004). “Disruptive Technology
Reconsidered: A Critique and Research Agenda”
(PDF). Journal of Product Innovation Manage-
ment 21 (4): 246–258. doi:10.1111/j.0737-
6782.2004.00076.x.
• Danneels, Erwin (2006). “From the Guest Edi-
tor: Dialogue on The Effects of Disruptive Tech-
nology on Firms and Industries”. Journal of
Product Innovation Management 23 (1): 2–4.
doi:10.1111/j.1540-5885.2005.00174.x.
• Roy, Raja (2014). “Exploring the Boundary Condi-
tions of Disruption: Large Firms and New Product
Introduction With a Potentially Disruptive Technol-
ogy in the Industrial Robotics Industry,” Engineer-
ing Management, IEEE Transactions on, vol.61,
no.1, pp. 90,100. http://ieeexplore.ieee.org/xpls/
abs_all.jsp?arnumber=6578147
11 External links
• Peer-reviewed chapter on Disruptive Innovation by
Clayton Christensen with public commentaries by
notable designers like Donald Norman
• The Myth of Disruptive Technologies. Note that
Dvorák’s definition of disruptive technology de-
scribes the low cost disruption model, above. He
reveals the overuse of the term and shows how many
disruptive technologies are not truly disruptive.
• “The Disruptive Potential of Game Technolo-
gies: Lessons Learned from its Impact on the
Military Simulation Industry”, by Roger Smith
in Research Technology Management (Septem-
ber/October 2006)
• Disruptive Innovation Theory
• Bibliography of Christensen’s “Theory of Disruptive
Innovation” as it relates to higher education
• Disruptive Technology Portfolio by Information-
Week and Credit Suisse
• Diffusion of Innovations, Strategy and Innova-
tions The D.S.I Framework by Francisco Rodrigues
Gomes, Academia.edu share research
• CREATING THE FUTURE: Building Tomorrow’s
World
• Lecture (video), VoIP as an example of disruptive
technology
7. 7
12 Text and image sources, contributors, and licenses
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