Disruptive innovation
Disruptive innovation (or disruption) is innovations in market exchangeables or processes that radically change existing markets including an industry's rules of the game.
Definition
According to Management by Robbins and Coulter (14th edition),
- Disruptive innovation. Innovations in products, services, or processes that radically change an industry's rules of the game.
According to the Corporate Strategy by Lynch (4th edition),
- Disruptive innovation. This takes an existing market and identifies existing technologies that will offer simpler, less expensive products or services than have been offered previously. See also Innovation.
An innovation or technology is disruptive when it "disrupts" an existing market by doing things such as: challenging the prices in the market, displacing an old technology, or changing the market audience. “An innovation that helps create a new market and value network, and eventually goes on to disrupt an existing market and value network (over a few years or decades), displacing an earlier technology. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect, typically first by designing for a different set of consumers in the new market and later by lowering prices in the existing market.” (Source: Wikipedia) The term ‘disruptive technologies’ was coined by Clayton M. Christensen and articulated in his book The Innovator’s Dilemma. The term ‘disruption’ is now often used by startups to describe any product or idea that may change existing markets or products (planned or unplanned). However to be used correctly it should link to Christensen's original theory. The confusion is best explained here. An example is the disruption Wikipedia caused to the Encyclopedia market.
