Disruptive Innovation

Disruptive innovation 1 Disruptive innovation

Disruptive innovation 1 A disruptive innovation is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology

Disruptive innovation 1 In contrast to disruptive innovation, a sustaining innovation 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" (i.e. "transformational" or "revolutionary") or "continuous" (i.e. "evolutionary").

Disruptive innovation 1 The mass-produced automobile was a disruptive innovation, because it changed the transportation market

Disruptive innovation 1 Meanwhile, start-up firms inhabit different value networks, at least until the day that their disruptive innovation is able to invade the older value network

Disruptive innovation - History and usage of the term 1 Christensen replaced the term disruptive technology with disruptive innovation because he recognized that few technologies are intrinsically disruptive or sustaining in character; rather, it is the business model that the technology enables that creates the disruptive impact

Disruptive innovation - History and usage of the term 1 In keeping with the insight that what matters economically is the business model, not the technological sophistication 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.

Disruptive innovation - The theory 1 Christensen defines a disruptive innovation as a product or service designed for a new set of customers.

Disruptive innovation - The theory 1 "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."

Disruptive innovation - The theory 1 These companies tend to ignore the market's 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

Disruptive innovation - The theory 1 While Christensen argued that disruptive innovations can hurt successful, well managed companies, O’Ryan countered that “constructive” integration of existing, new, and forward thinking innovation could improve the economic benefits of these same well managed companies, once decision making management understood the systemic benefits as a whole.

Disruptive innovation 1 A 'disruptive innovation' is an innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology

Disruptive innovation 1 In contrast to disruptive innovation, a 'sustaining innovation' does not create new markets or value networks but rather only evolves existing ones with better value (economics)|value, allowing the firms within to competition (economics)|compete against each other's sustaining improvements. Sustaining innovations may be either discontinuous (i.e. transformational or revolutionary) or continuous (i.e. evolutionary).

Disruptive innovation 1 The mass-produced automobile was a disruptive innovation, because it changed the transportation market

Disruptive innovation 1 Meanwhile, start-up firms inhabit different value networks, at least until the day that their disruptive innovation is able to invade the older value network

Scientific management - Effects on disruptive innovation 1 There is always a balance to be struck between scientific management's goal of formalizing the details of a process (which increases efficiency within the existing technological context) and the risk of fossilizing one moment's technological state into cultural inertia that stifles Disruptive technology|disruptive innovation (that is, preventing the next technological context from developing)

Soldiering - Effects on disruptive innovation 1 The goal of increasing efficiency within an existing technological context by formalizing the details of a process always carries the risk of fossilizing one moment's technological state, thereby stifling disruptive innovation and preventing further technological progress

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