Disruptive Innovation

1. Disruptive
Innovation : Vijay
Godindrajan

2. Vijay Govindrajan : Brief
background
• Served as faculty member: Harvard,
INSEAD, IIM-A
• Professor : Earl C. Daum 1924 Dartmouth
college, Tuck School of Business
• Chief Innovation Consultant :GE
• Conceptualized Disruptive Innovation
• Worked with CEO’s of 25% of Fortune 500
companies
• Keynote speaker : World Economic Forum,
TED, BusinessWeek’s CEO Forum etc.

3. Disruptive Innovation
• Conceptualized by VG
• A particular Dynamic that endangers
incumbent
• Mostly concentrated in Western nations due
to infrastructure, sustainability and income
gap
• Pursuing sustaining innovations
• Charging high prices for innovative products
• A competitive price or labor advantage is
unsustainable

4. Some examples of Disruptive
Innovation
Disruptor Disruptee
Personal computers Mainframe and mini computers
Mini mills Integrated steel mills
Cellular phones Fixed line telephony
Community colleges Four-year colleges
Discount retailers Full-service department stores
Retail medical clinics Traditional doctor’s offices

5. Changing Dimensions of
Innovation
•• Innovate in poor countries
Innovate in poor countries
•• Bring it to rich countries
Bring it to rich countries
•• Earlier it was just the reverse
Earlier it was just the reverse
that was being done
that was being done
•• Ex. Nestle- Innovation of
Ex. Nestle- Innovation of
Maggi, it was done in India
Maggi, it was done in India
•• Huge market in emerging
Huge market in emerging
countries and in the western
countries and in the western
nations
nations
•• Godrej Chotucool :: Disruptive
Godrej Chotucool Disruptive
Innovation
Innovation
•• Recipient of Edition Awards
Recipient of Edition Awards

6. Strategy Adoption
• Organizations Over focus on Box 1 i.e. managing the present
• Creating a Future means focusing on box 2
• Strategy is about the projects the companies need to implement now
• Shaping the evolution for future would entail thinking out the box, i.e.
focusing on reverse innovation

7. Work at GE
• Pioneer of ultra low cost X-ray
machine in China
• Portable Machine
• Need for disruptive innovation
because of 70% of China being in
rural segment
• No hospitals in Rural China
• Portability is the main clause of
concern then
• Pricing at USD15000 compared to
usual pricing of USD350,000
• Ultra Low cost keeping in mind
customer affordability
• US market also being a prime
business location

8. Reverse Innovation: Important
Strategic Priority
• Shift in Growth from developed countries
to Developing countries
• Huge market opportunity in emerging
markets
• Third world countries a grater market
opportunity for these products
• A trend setter for the big companies.

9. Thank You

10. Thank You