These larger companies tend to make the mistake of initially overlooking the new entrant, perceiving them to be operating in a different realm.Ĭhristensen’s theory soon gained traction, leading to the term ‘disruptive innovation’ being used more and more loosely. Usually equipped with a better product and understanding of customer experience, the company is then able to push established players out of the market. Then, through a process of continuous improvement and innovation, these companies can break into the wider competitive market. They will then offer an alternative product or service that is usually more convenient and affordable, reaching consumers who had previously been ignored.ĭisruptive innovation views lower-performing (or less profitable) spaces as low hanging fruit for companies to gain a foothold in the market. How does disruptive innovation work?ĭisruptive innovation starts with a new company identifying a gap in the market that has been neglected, or a segment of the population that has traditionally been overlooked. ![]() Christensen, the term ‘disruptive innovation’ refers to a new company entering a market, disrupting and outperforming the established players, and eventually transforming either the market itself or the way consumers interact with it. ![]() Coined by the late academic and consultant Clayton M.
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