The Theory of Disruptive Innovation- Harvard Business Review Assignment Solution

Business Review Assignment

The Theory of Disruptive Innovation

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What is disruptive Innovation?

Disruptive innovation

A process in which a small company having limited resources successfully overcomes challenge to establish business is disruption. Theoretically disruptive innovation works in two types of markets – new – market footholds and low – end footholds. The existence of low end footholds is due to the fact that existing players do not pay more attention to customers having lesser demands. On the other hand, new – market footholds are those in which a new entrant develops a completely new market. Identifying disruptive innovation is not easy. This is because disruptive innovation is often considered to apply to a product or a service, when in reality its application to a process is often ignored. Its application and implementation can be time consuming and disruptive innovation may be consistently applied by market players to retain their position. Furthermore, disrupters are those who create business frameworks that are totally different from the existing market players. Be it Xerox or Apple’s iPhone. These products have sustained innovation mainly due to their strategy of disruptive innovation. Application of new business frameworks as well as introducing a new product and consistently enhancing the product are also a part of disruptive innovation. Despite this some disruptive models succeed whereas others don’t. This is mainly because companies using disruptive innovation to attain growth are easily imitated by other players. Apple has soared through as it has focused on developing its iPhone to have all functions of a laptop. Especially in developing new technologies and marketing them, the management has to make a choice to follow a disruptive or a sustaining path to accomplish growth. Empirical data has shown that entrants were outperformed in the construct of sustainable innovation, but underperformed in disruptive innovation construct. Scholars determined that organization’s change propensity is influenced by customer aspirations and the emphasis on existing clients make it difficult for companies to shift to disruptive innovation. Hence, every competitor is impacted to enhanced products and services to drive upmarket by using disruptive innovation. The theory has been refined to contain anomalies. The assumption of two kinds of market footholds has helped the theory to be practicable. Another anomaly is with respect to players evading disruption. This is especially true in case of the education industry that has forayed into providing online education in mainstream business, thereby following a disruptive path. Having knowledge on factors driving disruption helps in predicting results but does not change the management of disruption.

Despite this, failure to disruption cannot be credited to inadequate management attention, ambiguity or insufficient financial investment. The barriers arising from a current market player or a new player still needs to be clarified and the manner to mitigate these challenges needs to be determined. Scholars are hopeful as empirical evidence shows that disruptive model helps in significantly and measurably predicting the success rate of business

establishments.