Understanding Disruptive Innovation
Technology has forever changed both the customer’s experience as well as the basis of competition in business. Christensen (1997) observed the role of technology in aiding businesses to make drastically improved products and services that exceed customer expectations available in the market in a timely manner. In the past, businesses compete on traditional bases such as the functionality and availability of products and services, technology disrupted that trend, compelling businesses to also compete on the basis of reliability, user-friendliness and ultimately price (Chrisntensen, 1997; Leavy & Sterling, 2010). This interruption caused by technology is described as disruptive innovation.
There is no doubt that businesses who possess technologies and business models capable of totally redirecting customers’ taste to better-performing yet cost-effective product and service hold an impressive advantage over businesses who do not possess such capabilities. Research findings offer information that encourages businesses to take the lead in becoming fiercely innovative than competitors but not all approach to leading the DI charge is unanimously agreed upon by scholars. The purpose of this article is to share, from the views of scholars, elements of DI that are agreed upon and those that remain controversial.
Agreed-Upon Elements in Disruptive Innovation
One of the broadly agreed upon elements of DI among scholars is inventiveness. Companies that remain innovative are better positioned to compete and to win the competition over market share (Anthony & Clayton, 2005; Boulding and Christen, 2001; Dyer & Christensen, 2009). In addition to inventiveness, successful DI initiatives require the ability to converge trends in creative and simple ways. Apple’s ability to network with the music, movie, animation and internet service providers industries are good examples. Furthermore, scholars agree that the ability for a business to introduce DI initiatives into the market is as important as its ability to sustain such initiative (Anthony & Christensen, 2005; Leavy & Sterling, 2010).
Elements of Contention in Disruptive Innovation
Although getting to the market first with a DI-powered initiative can buy a business brand reputation, Boulding & Christen (2001) argue that being the first in this sense does not always translate to remaining the leader or enjoying long term benefits of profitability. Boulding & Christen caution against speed. After a new DI idea is introduced into the market, imitators can easily find ways to produce better and cheaper ways to produce and sell at lesser prices than the first-to-the-market business. Such a situation could result in cost disadvantages and eventually loss. Anthony & Christensen (2005) noted that being the first is not as important as being the business capable of sustaining the latest DI idea.
Companies must remain innovative to survive. DI strategies provide businesses with the capabilities to create new products and services that perform better and cost lesser, but the point is not to simply innovate. It is important to plan towards sustaining a DI idea introduced to the market. There are requirements for launching and reaping the benefits from DI, but scholars do not agree that some of those requirements support successful DI strategies. It remains to be known, through further research, whether controversial elements of DI are truly non-impactful (or even truly counterproductive) or whether those controversial elements are of themselves recipes for successful DI strategy applicable in specific situations.
Anthony, S. D., & Christensen, C. M. (2005). Can You Disrupt and Sustain at the Same Time? Harvard Management Update, 10(2), 3–4. Retrieved from http://search.ebscohost.com.library.capella.edu/login.aspx?direct=true&db=bth&AN=15896718&site=ehost-live&scope=site
Boulding, W., & Christen, M. (2001). First-Mover Disadvantage. Harvard Business Review, 79(9), 20–21. Retrieved from http://search.ebscohost.com.library.capella.edu/login.aspx?direct=true&db=bth&AN=5329008&site=ehost-live&scope=site
Christensen, C. (1997). Patterns in the evolution of product competition. European Management Journal, 15(2), 117-127. doi:10.1016/S0263-2373(96)00081-3
Dyer, J. H., Gregersen, H. B., & Christensen, C. M. (2009). The Innovator’s DNA. (cover story). Harvard Business Review, 87(12), 60–67. Retrieved from http://search.ebscohost.com.library.capella.edu/login.aspx?direct=true&db=bth&AN=45361658&site=ehost-live&scope=site
Leavy, B., & Sterling, J. (2010). Think disruptive! how to manage in a new era of innovation. Strategy & Leadership, 38(4), 5-10. doi:http://dx.doi.org.library.capella.edu/10.1108/10878571011059683
Companies that remain innovative are better positioned to compete and to win the competition over market share