Disruptive Innovation

Summary

The term ‘Disruptive Innovation’ was given in the year 1995 by Clayton M. Christensen and is regarded as one of the most influential and important innovations of the 21st century. Disruptive Innovation refers to the innovation which helps in creating new market and value network in place of the existing market and value network which leads to the disruption of the market-leading firms, alliances, and products that had already been established earlier. Each and every innovation cannot be regarded as a disruptive innovation even if they are bringing about change in the existing system.

In accordance with the ‘Theory of Disruptive Innovation’ disruptive innovation has been classified into two types- “low-end disruption” and “new-market disruption.” The low-end disruption is a type of disruption which occurs when the changes within the product take place at a higher rate than the customers are able to adapt to the changes made within the product. The new-market disruption occurs when a new product emerges in the market that has not been served earlier by any of the incumbents of the industry and which fits itself within the new or emerging market segment.

The process of disruptive innovation is considered important for business leaders because of the benefits that it provides to the customers of the market. A disruptive innovator provides the products at a favorable price to its customers as well as years at creating a new and improvised value of his/her product by making additional changes in the product. The process of disruptive innovation has been proven beneficial for executives also.

The first disruptive innovation was encountered by the human beings in around 10,000 BC in the Middle East, and since then it has continued to take place.