DISRUPTIVE
INNOVATION
PAGE 8
computers which made life very easy for a lot of
people this created a new mass market for those
who could not have afforded the expensive
mainframes and this lead to creation of a niche
market for personal computers
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Kodak is another subtle example where the
company was the market leader and was highly
profitable at a point in time and this made them
stagnant as they were happy with what they were
doing Kodak failed to see the danger from the
digital world it did not take on the challenge of
disruptive innovation The introduction of digital
technology resulted in products that were easier
to use and provided a far better performance thus
kicking Kodak out of the competitive market The
rise of digital was bad news for Kodak
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A key concept in Disruptive Innovation theory is
that of performance oversupply It explains that
the performance demanded by the customers
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iNM VOLUME 9
increases at a slower rate than performance
improvement in technology This happens
because the incumbents tend to focus more on
their highly profitable customers Therefore
sustaining innovation results in products that
the majority of the market can not relate to
When disruption occurs in such a scenario the
mass market starts relating to the product and
they switch over to the new
product technology
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A perfect example of performance supply
is Microsoft Excel The rate at which Microsoft
comes up with innovation far exceeds the
utility of the average user The latest addition to
Microsoft Excel is the Office 365 edition and
before that Microsoft had come up with
Microsoft 2013 however the mass market still
uses either Excel 2007 2010 This would provide
a perfect opportunity for disruption but owing
to the lack of competition Microsoft is still
enjoying superiority in the market
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