Disruptive innovation refers to transforming expensive or sophisticated products into simpler, more affordable options accessible to more people. It explains how innovation can change markets by presenting affordable, simple solutions and disrupting existing markets. Disruptive innovation occurs when smaller companies move upmarket and challenge larger incumbents by first targeting less profitable market segments with lower-cost products. Understanding disruptive innovation empowers entrepreneurs to disrupt industries and professionals to strategically avoid disruption.

1. Disruptive Innovation
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2. What Is Disruptive Innovation
 Disruptive innovation refers to the process of transforming an expensive or
highly sophisticated product, offering, or service into one that is simpler,
more affordable, and accessible to a broader population.
 It explains the process of how innovation and technology can change
markets by presenting affordable, simple, and accessible solutions and after
doing so, disrupts the market from which its predecessors were born.

3. • Disruptive innovation is the process by which a smaller company usually with fewer resources
moves upmarket and challenges larger, established businesses.
• The process begins with a small company entering the low end of a market, or creating a new
market segment, claiming the least profitable portion of the market as its own. Because the
established, incumbent companies own the most profitable market segments, they most likely
won’t fight the entrant for that market share.
• The entrant then improves its offerings and moves upmarket with increasing profitability. Once
the incumbents’ customers have widely adopted the entrant’s offerings in the mainstream
market, disruption has occurred.
• Understanding this process can empower aspiring entrepreneurs to seek opportunities to disrupt
industries, and seasoned professionals to strategically avoid disruption.
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4. Understanding Disruptive Innovation
• Disruptive innovation is not the process of improving or enhancing products for the
same target group; rather, it involves the technologies used to make them easy to
use and available to the larger, non-targeted market.
• An example of disruptive innovation is the introduction of digital music downloads,
which have, by far, replaced compact discs (CDs).
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5. When does disruptive innovation occur?
• According to Christensen's theory of disruptive innovation, incumbent businesses
themselves help create the circumstances that allow disruption to occur.
• The established businesses focus on improving their products to meet the needs of their
biggest (and most profitable) customers and, as a result, deliver products that do not match
the needs of its other, smaller customers.
• This provides an opportunity for newer companies to come into the space and gain market
share that they can then build upon.
• Christensen noted that disruptive innovation is a process. Disruption happens when the
smaller company's product or service becomes the main choice, displacing the incumbent's
product or service.
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6. Why disruptive innovation is important
• Business leaders see disruptive improvement as important for bringing benefits to customers
and society, as the disruptive innovator produces a better offering (often at a lower price)
while at the same time creating new value and spurring additional improvements beyond the
early iterations of its product or service.
• According to business thought leaders, the reasons executives must be aware of disruptive
innovation and how it occurs are two-fold.
• Knowledge of how disruptive innovation works will help executives prepare their companies
to anticipate innovations that could become competitors. It will also give executives a better
sense of whether, when and where they should support investments into their own strategic
development of potential disruptive innovations.
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7. TYPES OF DISRUPTIVE INNOVATION
Christensen explains that there are two types of disruptive innovation
• low-end
• New-market
1. Low-end disruption: When a company uses a low-cost business model to enter at the
bottom of an existing market and claim a segment.
 Because there’s no profitability incentive to fight for the bottom of the market, a low-end
disruption causes incumbent companies to focus their efforts on more profitable areas.
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8. • An example of a low-end disruption is the rise of retail medical clinics in the healthcare
space. Large medical centers handle everything from a sinus infection to open-heart
surgery and employ specialists to care for various injuries and ailments.
• Typically, the more serious the injury or illness, the more expensive the cost to the
patient.
• As a result, along with the convenience of location and waiting times, many people
with low-grade injuries and illnesses opt to visit a retail medical clinic instead of going
to their doctor’s office or a medical center.
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9. 2. New-Market Disruption
The other type of disruptive innovation is new-market disruption, which is when a company
creates a new segment in an existing market with a low-cost version of a product.
The factor that sets new-market disruption apart from low-end disruption is its focus on an
audience that doesn’t yet exist in the market. Offering a more cost-effective, simple, or
accessible product effectively creates a new segment.
• An example of a new-market disruption is the transistor radio.
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11. Netflix (NFLX) is another disruptive innovator. During a time when VHS tapes
and DVDs were rented in abundance from thousands of video stores, new-
entrant Netflix saw an opening to cater to an overlooked market of online
shoppers.
Not long after offering mail-delivered DVD rentals, they revised their business
model, finding an avenue to disrupt themselves in the market by offering
online-streamed entertainment.
Meaning

12.  Disruptive innovation involves the innovative processes used to transform
products and services into simple and affordable options for bottom-tier or
traditionally unmarketable consumers.
The Bottom Line
 Disruptive innovation requires technology that can transform the product or
service into something more affordable and easy-to-use.

13. Disruptive Innovation
Disruptive innovation refers to the process of transforming an expensive or
highly sophisticated product, offering, or service into one that is simpler, more
affordable, and accessible to a broader population.

14. Opportunities
 Creation of new markets : Disruptive innovation usually leads to creation of new
markets.
 Cost Reduction : Idea creation and translation of the same into new products and
services, though a lengthy period can also be a costly affair.
 Value addition : Value addition is generally in the form of an extra feature that has been
added to the product or the service before it is offered to the final customer for
consumption of usage.
 Reduced complexities : Researchers are always interested in reducing the complexities
of problems and thus lead to product or services that have multiple features with which the
needs of customers can be satisfied
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15. Challenges
 Adaptability: Disruptive innovations take time to prove in the complex market
conditions and significant time period is also consumed in penetrating the market
 Gestation period :: It takes a significant period for any innovative idea or a product or
a service to get established in the market.
 Increased competition :New ideas or business models have got a tendency to
disrupt the existing and established ideas/products/services/business models and this
creates fierce competition in the market
 Market acceptance : A considerable period has to go before any innovative idea
creates its own significant market share.
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16. Disruptive Innovation Cycle
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17. Examples of Disruptive Innovation
• Amazon provides a clear example of disruptive innovation.
• Jeff Bezos, in 1995, subscribing to the notion that the internet could
significantly boost commerce, launched Amazon to sell books to a growing,
but largely ignored online shopping community.
• In doing so, he forced many bookstores to go out of business.
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18. Examples of Disruptive Innovation
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Ford Motors
• Ford might not have been the automobile company responsible for the
creation/manufacturing of the world’s first car, but it did change the way
automobile companies made automobiles. Therefore, it disrupted the
automobile industry for good.
• In 1913, Ford positively affected the automobile industry forever by designing
the world’s first moving assembly line. This innovation meant that the company
could mass-produce new vehicles that were affordable for all customers.
The disruptive innovation of Ford Motors
• Before Ford’s disruptive innovation, it was practically impossible for anyone
outside the high/royal class to own a car. However, with Ford’s mass
production strategy, it became possible for the average class to own a vehicle.

19. More Examples of Disruptive Innovation
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20. Key Requirements for Disruptive Innovation
 To be a successful disruptor, the network of partners- suppliers, contractors,
and distributors must also benefit from the new business model.
 Certain core requirements include having enabling technology, an innovative
business model, and a coherent value network where upstream and
downstream business partners benefit from a successful disruption
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21. 21
Disruptive Innovation Vs Blue Ocean Strategy
Disruptive Innovation Blue Ocean Strategy
DI theory being more academic BOS is being more practical
DI Often reworking factors, which are
technology driven, results in a more cost-
effective solution with adapted
functional and performance features
better suited to the application of the
product/solution.
Blue Ocean Approach focuses on
product/solution factors which are
important to the customer.
found DI works at its best in company
start-ups
They can be applied in a variety of
scenarios
get a kick out of combining the 2.
Basically 2 very effective differentiation /
strategic positioning tools that can really
be effective
whilst BOS is slightly more effective
analysing existing businesses

22. Conclusion
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• Disruptive innovation is going to continue to occur in every industry.
• It is critical that you explore emerging tactics that adopt processes and attracts
leaders and companies who are open to change, challenge the status quo, and
never stop thinking of ways to innovate and improve.
• By adopting all or some of these principles, you may find that your business
isn’t just thriving within the industry, but completely changing the way things
are done within the industry.

23. 𝐑𝐄𝐅𝐄𝐑𝐄𝐍𝐂𝐄
https://www.investopedia.com/terms/d/disruptive-innovation.asp
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https://www.interaction-design.org/literature/book/the-encyclopedia-
of-human-computer-interaction-2nd-ed/disruptive-innovation
https://hbr.org/2015/12/what-is-disruptive-innovation
https://www.acceptmission.com/blog/examples-of-disruptive-products/