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DISPRUPTIVE INNOVATION
Introduction
Create new market
New value network
Disrupt existing market
Displace earlier technology
DISRUPTIVE INNOVATION
Term introduced by Harvard Professor, Clayton Christensen in his 1997 best seller “The
Innovator’s Dilemma”
Sustaining v/s Disruptive Innovation
Sustaining innovation
Evolves existing market with better
value
Firms compete against each other’s
improvements
Disruptive innovation
Characteristics which customers
may not want initially
Appear cheaper, simpler and may
even be of inferior quality
Clayton Christensen Foremost authority on
disruptive innovation Widely sought after as a
speaker, advisor and board member.
Author of two famous books on Disruptive Innovation
The Innovator’s Dilemma Why firms fail despite being
leaders in their market Sustaining innovations - best
utilized by the firms at the best position in an industry
Disruptive innovations - that are either so much cheaper that they open a new market or create a new value network
Performance of the disruptive technology grows faster than users’ needs and surpasses the leaders with time.
The Innovator’s Dilemma
Example: Mechanical Excavator Industry
Sustained Innovation – Gasoline Powered Engines
Disruptive Innovation – Hydraulic Actuated System
The Innovator's Solution: Creating and Sustaining Successful Growth
How you can beat your most powerful competitors.
• Starts with disruption• Learn the elements
of disruption and practice its theories
The Innovator's Solution: Creating and Sustaining Successful Growth
What products your customers will want to buy.
Accurately segment your markets Help the disruptions grow into healthy businesses Avoid the market forces that can fool you into
making bad decisions.
The Innovator's Solution: Creating and Sustaining Successful Growth
Who the best customers are for your products.
• Extract growth from an audience that doesn’t use your products at the moment
The Innovator's Solution: Creating and Sustaining Successful Growth
Get the scope of your business right Find out which is right for your business key functions - in-house or outsource integrate your product offerings or modularize
The Innovator's Solution: Creating and Sustaining Successful Growth
Develop disruptive growth from the top down.
Powerful executive leadership Get the ball rolling toward successful disruptions Foster sustained business growth
Start before you need to
Put a Senior Manager in
Charge
Create an Expert Team
of Movers and
Shapers
Train the Troops