DISRUPTIVE
INNOVATIONS
PAGE 2
attributes and economical offerings which then
become a ground for disruptive innovation
For new market footholds the emergent recognise a
need gap and work to provide solutions that satisfy
the need to garner new customers Thus disruption
starts at the lower segments and then pushes its
way up the ladder through quality improvements to
become appealing to the mainstream market
Disruptive innovations make their way from the
fringe to the mainstream where a complete
substitution takes place A very prominent example
is the introduction of Netflix which started as an
exclusive online interface initially appealing to a
small customer segment of movie lovers who would
pay to have access to the movies This led to the
incumbents ignoring and overlooking the
competition and focusing on their own customers
and services This led to Netflix upgrading its
offerings followed by capturing the market share
from the traditional players in the industry
,
.
-
,
-
,
.
,
,
.
,
.
,
,
-
.
.
.
INM VOLUME 9
Understanding New market footholds Growth out
of nothing
Certain companies try to look at customer needs
and market requirements through different business
lenses This arises from new consumers or new
category introductions This leads to offerings that
are new to the world better suited to the customer
requirements and result in substituting the
incumbent technologies This also helps increasing
the customer base and providing solutions and
opportunities for a new and improved future An
example closer to home is Tata Nano which
understood the need of a small basic first car
among the consumer market in India It recognized
the gap and ended up drastically influencing the
Indian automobile market
-
-
?
.
.
,
.
.
,
,
,
-
.
.
Platform disruption v s Product disruption
A platform is a structure on which numerous
products can be built Platform disruptions are
usually on very big scale contesting for the
complete category or customer segments An
example of this kind of a disruptive innovation is
Uber which radically changed the platform for
booking of hired vehicles Another example for this
can be the introduction of online marketplaces like
Amazon which impacted the complete retail
environment These innovations have both inter and
intra industry wide changes due to the large scale
and huge impact of the innovation on consumer
segments Deep societal changes follow the new
technology introduction
/
.
,
Disruption through Business Model Innovation
Emergent companies usually introduce product and
process innovations to shift market trends Another
way companies use disruptive innovation is by
implementing business model innovation
Innovating and improving practices that the
industry utilises has emerged as a great way to
disrupt the incumbent technologies and shift
consumer preferences A great example of this type
of innovation is the Chinese market which
introduces newer and better practices in their
business models leading to their competitors
adopting the practices after losing a lot of market
share to these companies These innovations can be
either in terms of the business process or customer
experience Xiaomi has been disruptive in customer
experience Haier is well known for its innovations
and improvements in time to market strategies
which have in turn changed the industry scenario
.
.
.
.
,
.
,
.
-
,
.
.
,
.
.
,
;
,
-
.
Transformation Fringe to Mainstream
Disruptive innovations initially perform poorly on the
traditional market indices but eventually evolve and
grow to form better product services models or
experience that perform wonderfully on those
points But this requires quite some time and
resources since making a transition to the
:
,
.
,