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Disruptive Innovation & the Sustenance
The term disruptive innovation in essence has been a part of business fundamentals for centuries. Even if the term wasn’t coined, innovations that disrupted businesses have been a part of our society since the thinking man appeared on the face of the planet. Disruptive innovation can be defined as a term that is affixed around the change that governs human innovations. When a new innovation is able to disrupt an established business, disruptive innovation occurs.
Fundamentals in Business Theory
In business theory, disruptive innovation is a form of innovation that creates a new market and consequently a value network. Remember, by the new market forms overtakes the existing market as the value network of the existing market completely gets disrupted. The term was first coined not so long ago in 1995 by Clayton M. Christensen. It is even referred to as the most influential business idea of the early 21st century.
It’s important we look at the different types of innovation in order to truly understand where disruptive innovation lies.
1. Evolutionary Innovation
An evolutionary innovation refers to an innovation that improves on an existing product in an already existing market. Naturally, improvements in an existing product or service reflect the customer’s need for that improvement in the first place. The point to be noticed is that it doesn’t form a new market or a value network. A common example could be how a new model of an iPhone appears every year or so. It doesn’t exactly disrupt a market, it just enhances it.
2. Revolutionary or Radical Innovation
As we can tell from the name of the type, it’s an innovation that is unexpected but its impact is a little different than one could imagine. It doesn’t exactly disrupt a market but it does create a new market value but for only specific people. For example, the first automobiles were introduced in the late 19th century but they were so expensive that they were termed as luxury items. So much so that only a few people could afford it. Automobiles hence did not disrupt an existing business which was of animal laden carts or horse-drawn carriers.
3. Disruptive Innovation
Like stated before, disruptive innovation is an innovation that disrupts an existing market by creating a new market and value network. The new innovation was not only unexpected but it is also able to create a new market which disrupts an existing market. For example, when the Ford Model T was introduced in 1908 by Henry Ford, it completely disrupted the horse carriers as it was an affordable car and was an actual substitute of horse drawn carriers.
Some Important Misconceptions
- Disruption doesn’t just happen in a day or two and it’s not a product or a service to be precise. Disruption is the name of a process that takes place from the fringe to the mainstream over a period of time.
- Disruptive innovation always originated in sections where demand is low as the market doesn’t even exist. However, the need for disruption through the continuous process is present.
- Disruptive Innovation can fail. Just because disruption is being occurred doesn’t necessarily mean that success is guaranteed.
- The new market formed would have the same existing customer which in later stages become the mainstream market and will require evolutionary innovation.
In a Nutshell
Sustainable Disruptive innovation is a process that refers to how disruption must be sustained over a period of time in order to bring change or an innovation that can disrupt the previous markets. Disruptive innovation represents the change and a need for betterment when it comes to the very nature of human beings.
tagged: Disruptive Innovation, sustainable disruptive innovation