Corporate Profile 47Billion Information Technology
The concept of disruptive innovation
1. • What is disruptive innovation?
According to Christensen (2009), disruptive innovation refers to any initiative that
allows new clienteles to have access to a new product or service that historically was only
accessible to consumers with lots of money or specialized skills. It also describes the
process by which this product or service takes root initially in simple applications at the
bottom of the market and then relentlessly moves “up market” and eventually displacing
established competitors.
According to Christensen,disruptive innovation takes the form of: lower gross
margins, smaller target markets, and simpler products and services that may not appear as
attractive as existing solutions when compared against traditional performance metrics.
How does it come about?
Disruptive innovation happens as market leaders recognize the major shifts in the needs
of the new consumers and pays attention to them. Needs such as dissatisfaction with
services; products that are no longer meeting their needs; overpricing, and useful but
complicated products. The new open market and the infusion of technology that has
given the consumer a voice has also propelled the disruption.
• What is sustaining innovation?
Sustaining innovation as the name suggests are those activities that companies continue
to engage in as they sustain the needs of their traditional consumers who continue to seek
after better quality goods at higher and more competitive prices which they are still
2. willing to pay for . According to Christenson (2009) these are the goods and services that
traditionally helped them succeed.
• How can disruptive innovation be a catalyst for change?
Organizations that purposefully engage in disruptive innovation and succeed at it create
competition and disrupt market trends for its competitors. It would be smart if these
competitors, rather than seeing the strategy as a threat see it as a catalyst for them to
change their products, marketing strategy or business model to increase their share of the
market.
• What are some historical as well as recent examples?
Web 3.0
Walmart
Amazon
The theatre industry and Netflix
Britannica vs Wikipedia
Brick and Mortar classrooms vs. e-learning.
The airplane industry JetBlue vs American Airlines
3. Reference
Christensen, C. (2009) Disruptive Innovation. Retrieved July6, 2011 from
http://www.claytonchristensen.com/disruptive_innovation.html
Christensen C. M., C. W Johnson, & M. B. Horn. (2008). Disrupting Class: How
Disruptive Innovation Will Change the Way the World Learns. New York: McGraw-Hill.