Study note on disruptive innovation

Study note on disruptive innovation

References with some extracted contents

Corsi, S. and A.D. Minin. 2014. "Disruptive Innovation .... in Reverse: Adding a Geographical Dimension to Disruptive Innovation Theory" Creativity and Innovation Management 23(1): 76-90.

"Introduced in 1995 by Bower and Christensen, the concept of disruptive innovation was refined by Christensen in 1997 with his ‘Innovator’s Dilemma’, asking why great companies pursuing innovation in mainstream markets suffer from market myopia and are overtaken by entrant firms introducing products based on new, disruptive technologies";

"Christensen distinguishes between sustaining and disruptive technologies. The former are technologies that respond to an improvement, radical or incremental, of ‘established products, along the dimensions of performance that mainstream customers in major markets have historically valued’ (Christensen, 1997, p. xv). Disruptive technologies, on the other hand, are innovations for existing products but on attributes that differ from those that are mainly valued by mainstream customers. These innovations, which initially underperform with respect to the main attributes of sustaining technologies, become disruptive when they reach the same performance as the sustaining innovations on the attributes valued by mainstream customers";

"In earlier works, Christensen (Bower & Christensen, 1995; Christensen, 1997) refers to disruptive technology only as an ‘innovation that results in worse product performance in mainstream markets’. It is also described as a ‘typically cheaper, simpler, smaller and frequently more convenient to use’ version of an

existing product";

"In an updated version of the concept, Christensen and Raynor (2003) distinguish between ‘low-end disruptions’ and ‘(newmarket) high-end disruptions’. The former are those offering lower performance at a cheaper price but no other performance improvements, while the latter are described as products and services that offer better performance on attributes that differ from those valued by mainstream customers";

Birton J. Cowden, Hadi S. Alhorr, (2013) "Disruptive innovation in multinational enterprises", Multinational Business Review, Vol. 21 Issue: 4, pp.358-371.

"....the existing literature on innovation suggests that innovation lies on a spectrum with disruptive innovations on one side of the spectrum and sustaining innovations on the other. Disruptive innovations are simple adaptations to existing technologies that appeal to customers who were not attracted to previous products. From a market standpoint, this is considered a low-end encroachment (Schmidt and Druehl, 2008), where a firm targets a higher volume of customers by providing a cheaper, no-frills version of existing solutions. An example of this disruptive innovation from a MNE is General Electric’s portable ultrasound machine that was developed out of a need to better attract lower income markets";

"Due to the nature of disruptive innovation, many have observed that incumbents tend to not pursue disruptive ideas because of organizational inertia, path dependencies, resource dependencies of their existing progress of moving up the market to higher-end, more profitable customers (Barnes, 1984; Christensen and Raynor, 2003; Godkin and Allcorn, 2004), and their unwillingness to cannibalize themselves";

"...the general management literature on innovation has primarily focused on sustaining innovations. Disruptive innovation has received very little attention in the field of strategy, and more specifically within the realm of international and cross-cultural studies (Cowden and Kalliny, 2013). Past research on disruptive innovation has predominantly focused on industry effects, innovative trends during times of uncertainty, and managerial behaviors towards disruptive innovation";

Jin Chen, Zhaohui Zhu & Yunting Zhang (2017) A study of factors influencing disruptive innovation in Chinese SMEs, Asian Journal of Technology Innovation, 25:1, 140-157.

"Disruptive innovation does not aim to ‘bring better products to established customers in existing markets’ (Christensen and Raynor 2003), termed ‘sustaining innovation’ (Ettlie, Bridges, and O’ Keefe 1984; Dewar and Dutton 1986; Tushman and Anderson 1986; Christensen 1997; Christensen and Raynor 2003). In contrast, attempts to ‘change the game’(Thomond, Herzberg, and Lettice 2003), destroys the value of existing competencies (Abernathy and Clark 1985), significantly transforming the demand and needs of an existing market and consequently disrupting its former key players";

"It is disruptive innovation that has created a number of world famous companies, and it is also disruptive innovation that has led many large companies to failure, even though they have stayed atop of their industries. For example, Japan’s economic flourishing from the 1960s to the 1980s is because of the disruptive innovations of Sony, Toyota, Canon, and so on. However, entering the 1990s, these companies switched from destroyer to the one to be destroyed, leading to a downturn in the Japanese economy. Because of their sophisticated strategy, extensive experience, abundant resources, higher profit margins, and loyal customers, established companies have powerful motivations to fight to keep their position and almost always win such battles";

Stephen Powell, Bill Olivier & Li Yuan (2015) Handling disruptive innovations in HE: lessons from two contrasting case studies, Research in Learning Technology, 23:1, 22494, DOI: 10.3402/rlt.v23.22494.

"Sustaining innovations are those that improve existing, well-tested curriculum delivery models without changing the current ways an institution functions. Disruptive innovations are those that develop new business models to exploit the potential of emerging technologies to serve new types of students, or existing students that current provision does not serve well. Disruptive innovations present a challenge to an institution’s existing processes, systems, working practices, and, perhaps most importantly, to its decision-making around appropriate management responses, specifically the allocation of resources";

Lourdes Pérez, Victor Dos Santos Paulino, Jesus Cambra-Fierro, (2017) "Taking advantage of disruptive innovation through changes in value networks: insights from the space industry", Supply Chain Management: An International Journal, Vol. 22 Issue: 2, pp.97-106, https://doi.org/10.1108/SCM-01-2017-0017.

"Disruptive innovation is a powerful means of developing and broadening new markets, leading to new supply chains, partnerships and modes of collaboration ..... Disruptive innovations are distinct from what Christensen and Raynor (2003) term sustaining innovations, which target existing customers with better products and services than were previously available – either in the form of smaller ongoing year-by-year improvements or occasional major improvements";

"Success in terms of sustaining innovation depends on how well firms perform compared to their competition; it involves “doing more of the same, but better or quicker or cheaper”. There are winners and losers in this race, but the players and game dynamics are relatively predictable. Disruptive innovation, in contrast, changes competition completely by altering the very performance metrics firms use to compete";

"Christensen argues that the term disruptive innovation is misleading when used to refer to a product at one given point in time. Disruption should be seen as a process whereby small companies (entrants) are able to challenge established incumbent firms by offering new technology – often at a lower price – to overlooked customer segments. When initially launched, the new technology is inferior in terms of performance, according to the performance criteria of mainstream customers; it does, however, have unique features that appeal to new market footholds. As the new technology improves, entrants move upmarket, delivering the performance that the mainstream customers of incumbents require while preserving their initial unique advantages";