Elements Of Disruptive Innovation

The disruptive innovation model

In the Innovator’s Dilemma, Christensen (1997) identified three important elements of disruption:

 The rate of improvement that customers can utilize or absorb

 The pace of technological improvement

 The distinction between sustaining and disruptive innovation

The first element represents the fact that not all customers are actually able to utilize the performance companies make available for them due to certain factors. An example from the automobile industry is that the companies are keep providing new and more powerful engines, but traffic jams, speed limits and safety concerns prevents certain customers to utilize all the performance.

The second issue is the pace of technological improvement. Generally,

It creates an opportunity for the disruptor to produce cheaper goods and services with lower performance for the least profitable segments of a market, and thereby gaining foothold. Even though there’s a distinction between New market and Low-end disruption, they create almost the same dilemma to incumbents. New market disruption induce them to ignore the attackers, and low-end disruptions motivate the incumbents to flee the attack and focus on the most profitable segments of a market.

Inhibitors of disruptive innovation

It was stated before that incumbents usually prefer sustaining innovations those are aiming the high-end of a market. But why is it hard for large firms to develop disruptive innovations? What are the major factors that limit company’s capability for disruptive innovation? By reviewing the relevant literature, Assink (2006) created an extensive list of the barriers and inhibitors of disruptive innovation, but due to the lack of space, now we’re only focusing on some of them.

Dominant design, path dependency and successful

The strategic importance of disruptive innovations are not well known – There’s very little knowledge about the theory of disruptive innovation within most firms, which makes it rather hard to develop and introduce potentially disruptive ideas, products, or services

2. Inability to generate disruptive ideas – Disruptive innovations require thinking about markets and customers in a non-traditional way, to understand where customers are not consuming products and why, and what are the needs of the low-end customers who would prefer a just-enough product

3. Inappropriate funding routines – Established firms prefer to focus on incremental and occasionally mildly radical innovation, as the current knowledge is dictating or at least significantly influencing the future, which causes difficulties to the funding of potentially disruptive projects.

4. Inappropriate New Product Development (NPD) processes – As markets might not yet exists or might be transformed, typically people with a potentially disruptive discovery are frequently not prepared to make the cognitive leap from the idea to envisioned and articulated business