DISRUPTIVE
INNOVATION
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WHAT IS DISRUPTIVE INNOVATIONS?
profitable and demanding customers with ever
improving products and services and they pay
less attention to less demanding In fact
incumbent s offerings often overshoot the
performance requirements of the latter
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Disruption describes a process whereby smaller
company with fewer resources is able
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The second reason is disruptive innovations
don t catch on with mainstream customers
until quality catches up to their standards A
fifth blade in razor the clearer TV picture better
mobile phone reception can be improvements
can be incremental advances or major
breakthroughs but they all enable firms to sell
more products to most profitable customers
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To successfully challenge established incumbent
businesses Specifically as incumbents focus on
improving their products and services for their
most demanding customers they exceed the
needs of segments and ignore the needs of
others Entrants that prove disruptive begin by
successfully targeting those overlooked
segments gaining a foothold by delivering more
suitable functionality frequently at a lower price
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iNM VOLUME 9
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iPad carved out a niche in the tablet industry It replaced laptops and desktops while
dominating 68 3 of the Tablet industry
Most of the elements of Uber s strategy seem to
be sustaining innovations Uber s service has
So ipad carved out a niche
rarely been described as inferior to existing
taxis in fact many would say it is BETTER but it
But then is Uber the much feted transportation
did not create a SEPARATE MARKET or target
company a disruptive innovation The answer is
WHOLE SET OF NEW CUSTOMERS
No Uber s financial and strategic achievements
do not qualify the company as disruptive
Disruption is not just a step or a point in the life
although the company is always described that
of a new product it s a process
way and there are two reasons for it
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The first is disruptive innovations originate in
low end or new market footholds Disruptive
innovations are made possible because they get
started in two types of markets that incumbents
overlook Low end footholds exist because
incumbents typically try to provide their most
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The mini computers were disruptive not merely
because they were small end upstarts nor
because they were held superior than the
computers at that time but because they chose
a path that was different from the mainstream
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