What Does Disruptive Innovation Mean?

Disruptive innovation is a term coined by Clayton Christensen, who was a professor at the Harvard Business School. It describes a process by which a new product or service creates a new market and eventually disrupts an existing market, displacing established market-leading firms, proPreview in new tabducts, and alliances.

Big companies have traditionally struggled to innovate in their business models, but they can be disruptive, if they identify and overcome limiting orthodoxies about how to do business.

What are the Characteristics of Disruptive Innovation?

There are several characteristics that are commonly associated with disruptive innovation.

1. Disruptive innovation often begins by targeting a small, niche market. They often start by targeting a small, underserved market that is not being adequately served by existing products or services.
2. Disruptive innovation initially performs poorly compared to existing products or services. They are often inferior to existing products or services in terms of performance or features. However, they may have other characteristics that make them appealing to a subset of the market, such as convenience, price, or accessibility.
3. Disruptive innovation improves over time. As disruptive innovations mature and improve, they begin to compete more directly with the established products and services in the market.
4. Disruptive innovation often creates new markets or significantly changes existing markets. It can disrupt established firms: Disruptive innovations can disrupt established firms and lead to significant changes in the competitive landscape of an industry.
5. Disruptive innovation can lead to significant changes in the way that goods and services are produced and consumed. This can lead to the creation of new economic value and the destruction of existing value in established markets.

Read more about what disruptive innovation means

Why is Disruptive Innovation Important?

Disruptive innovation is important because it has the potential to drive significant changes in industries and markets. It can lead to the creation of new products and services that solve problems in new and innovative ways, and it can also lead to the emergence of new market entrants and the disruption of established firms.

Disruptive innovation is often associated with technological advancements, but it can also occur through business model innovations or changes in regulatory environments. It can lead to the development of new markets and the creation of new economic value, as well as the destruction of existing value in established markets.

Disruptive innovation is important because it can drive progress and lead to significant improvements in the way that goods and services are produced and consumed. It can also bring about significant changes in the competitive landscape of an industry, and can lead to the creation of new opportunities for entrepreneurs and established firms alike.

What are 5 Examples of Disruptive Innovation?

The personal computer: The personal computer was a disruptive innovation that transformed the way that people worked, communicated, and accessed information. It allowed individuals to perform tasks that were previously only possible on mainframe computers, and it created new markets and opportunities for software developers and hardware manufacturers.

The smartphone: The smartphone is a disruptive innovation that has transformed the way that people communicate, access information, and interact with the world around them. It has disrupted the market for traditional mobile phones, as well as the market for personal computers, and it has created new markets and opportunities for app developers and mobile services providers.

Online marketplaces: Online marketplaces such as eBay, Amazon, and Alibaba have disrupted traditional retail markets by allowing consumers to easily compare prices and purchase goods from a wide variety of sellers. They have also created new opportunities for entrepreneurs and small businesses to sell their products directly to consumers.

Ride-hailing services: Ride-hailing services such as Uber and Lyft have disrupted the traditional taxi industry by offering a convenient and cost-effective alternative to traditional taxis. They have also created new opportunities for drivers to earn income by providing transportation services to riders.

Solar energy: Solar energy is a disruptive innovation in the energy industry, as it allows individuals and businesses to generate their own electricity using renewable energy sources. It has the potential to disrupt traditional energy markets and create new opportunities for businesses that manufacture and install solar panels.