What is disruptive innovation?
Unlike a sustaining innovation, a disruptive innovation offers a product, service or business model to a niche market that has been overlooked. Although disruptive innovation isn’t always for niche markets, whichever market it’s in, it’s meant to reset industries through solutions that are impactful for customers, resulting in a competitive advantage. Often, companies become disruptors by creating entirely new products, or a more cost-effective approach, by repurposing old technologies.
In many cases, disruptive technology also makes an existing product or service available to a new market. It might reduce the cost of a traditionally expensive item, for instance, allowing more people to enjoy it.
Examples of disruptive innovation
More than anything, disruptive innovations can render previously successful companies obsolete by offering a new product or way of doing things. Here are some examples:
These and other disruptive innovations did more than add on to an existing popular product. They changed the way entire markets operated, allowing customers to experience products or services in a new way.
The role of technology in disruptive innovation
To qualify as disruptive, innovative products or services can be made available to new markets or offered at a lower price. Technology is critical in helping companies achieve both these goals.
Technology is often the main reason companies can reduce the cost of a particular product or service. For example, a new manufacturing process might help reduce costs, improve productivity or reduce the size of a company’s production line. These lowered costs can make certain products — once available only to higher-paying customers — now available to a much wider audience.
Many companies depend on technology for disruption. To meet new demands, technology can help companies create products at a faster rate. The right technology can also assist in marketing and distributing products and services after they have been created.
Time-saving, cost-cutting technologies are in high demand across virtually every industry. Christensen’s original definition of a disruptive innovation — those that satisfy market demand with lower costs — relies on technology from the start.
There are many organizations that no longer aim to create sustaining innovations. Instead, they search for technologies that help them lower costs, improve manufacturing and apply current products to entirely new market segments.