disruptive innovation (disruptive technology)
Disruptive innovation is a term used to describe a product or service that starts out small or simple and moves quickly through the lower tiers of a market segment, often displacing established businesses and technologies in lower margin sectors.
Generally, a disruptive innovation focuses on lower profit markets and customers, allowing a new startup or emerging business to be profitable by targeting customers who are underserved in the existing market. In time, the new product or service moves upwards in the market and can eliminate established companies who are slow to react or respond to the innovations.
Examples and Origins of the Phrase
Netflix is an example of a successful disruptive innovator business. When Netflix started, there was no direct competition in the established market (i.e. Blockbuster) but the innovative on-demand streaming model disrupted Blockbuster by focusing on a segment of underserved customers to gain industry presence.
Another classic example of disruptive innovation is the PC market. Personal computers were an innovation that improved over time and eliminated the mainframe industry. Blockchain is another example of a disruptive technology in financial markets.
The phrase disruptive innovation was coined by Harvard Business School professor, Clayton M. Christensen in his research on the disk-drive industry and later popularized by his book The Innovator’s Dilemma, published in 1997.
Today, the phrase disruptive technology is a preferred synonym of disruptive innovation.
IT Solutions Builder TOP IT RESOURCES TO MOVE YOUR BUSINESS FORWARD
Which topic are you interested in?
What is your company size?
What is your job title?
What is your job function?
Searching our resource database to find your matches...
Stay up to date on the latest developments in Internet terminology with a free newsletter from Webopedia. Join to subscribe now.
From A3 to ZZZ this guide lists 1,500 text message and online chat abbreviations to help you translate and understand today's texting lingo. Read More »Top Cloud Computing Facts
The following facts and statistics capture the changing landscape of cloud computing and how service providers and customers are keeping up with... Read More »
Java is a high-level programming language. This guide describes the basics of Java, providing an overview of syntax, variables, data types and... Read More »Java Basics, Part 2
This second Study Guide describes the basics of Java, providing an overview of operators, modifiers and control Structures. Read More »Network Fundamentals Study Guide
Networking fundamentals teaches the building blocks of modern network design. Learn different types of networks, concepts, architecture and... Read More »