5 Examples of Disruptive Innovation

Christian Sandstrm holds a PhD from Chalmers University of Technology, Sweden. He writes and speaks about disruptive innovation and technological change. www.disruptiveinnovation.se

Harvard professor Clayton Christensen coined the term disruptive innovation in his book The innovators dilemma, published in 1997.

Harvard professor Clayton Christensen coined the term disruptive innovation in his book The innovators dilemma, published in 1997. This presentation gives five illustrative examples of disruptive innovation.

A disruptive innovation initially offers a lower performance according to what the mainstream market has historically demanded.

A disruptive innovation initially offers a lower performance according to what the mainstream market has historically demanded. At the same time it provides some new performance attributes, which in turn makes it prosper in a different market.

A disruptive innovation initially offers a lower performance according to what the mainstream market has historically demanded. At the same time it provides some new performance attributes, which in turn makes it prosper in a different market. As it improves along the traditional performance parameters it eventually displaces the former technology.

For further detail on this concept, click here: http://www.slideshare.net/Christiansandstrom /disruptive-technologies-an-introduction

Number 1:

The Transistor Radio

Transistor Radio Traditional performance New performance

Analogue Radio

Transistor Radio Traditional performance New performance Worse sound

Analogue Radio

Transistor Radio Traditional performance New performance Worse sound

Analogue Radio

Portable Low Battery consumption

Being portable and offering worse sound quality, the transistor radio was adopted by teenagers who could bring music to the beach.

As the sound quality improved, it eventually displaced the analogue, big furniture radios.

Number 2:

Pocket calculators

Pocket calculator Traditional performance New performance

Desktop calculator

Pocket calculator Traditional performance New performance

Desktop calculator

Worse computing performance

Pocket calculator Traditional performance New performance

Desktop calculator

Worse computing performance Portable

Over time, the computing performance of these smaller, simpler calculators was improved.

As they became cheaper and were sold in larger and larger volumes, sales offices lost their value. Calculators started to be sold in bookstores and large retail stores.

Number 3:

LCD TV versus Cathod Ray Tube (CRT) TV

LCD TV Traditional performance New performance

CRT TV

LCD TV Traditional performance New performance

CRT TV

Worse image quality

LCD TV Traditional performance New performance

CRT TV

Worse image quality Low battery consumption Low weight

LCD screens initially prospered in various applications where image quality wasnt important.

In mobile phones, portable video games and cameras, battery consumption and weight were more important.

When the image quality had become good enough, they displaced CRT TVs in the 2000s.

Number 4:

Integrated steel mills VS minimills. Photo: www.jornmark.se

Minimills Traditional performance New performance

Integrated mills

Minimills Traditional performance New performance

Integrated mills

Worse steel quality

Minimills Traditional performance New performance

Integrated mills

Worse steel quality Cheaper, easier to produce

The minimill technology used scrap, put it in a furnace and made new steel of it.

The minimill technology used scrap, put it in a furnace and made new steel of it. Cheap, low quality steel.

The minimill technology used scrap, put it in a furnace and made new steel of it. Cheap, low quality steel. The integrated steel companies were more than happy to get rid of this low-margin business and instead focus on the high-end.

The minimill technology used scrap, put it in a furnace and made new steel of it. Cheap, low quality steel. The integrated steel companies were more than happy to get rid of this low-margin business and instead focus on the high-end. So they did, but slowly and steadily, the minimill technology offered better steel quality and captured segment after segment.

Eventually, the integrated steel mills started to suffer, badly.

Number 5:

Mobile phones versus regular phones

Cell phone Traditional performance New performance

Old phones

Cell phone Traditional performance New performance

Old phones

Worse sound quality Expensive

Cell phone Traditional performance New performance

Old phones

Worse sound quality Expensive Portable

As mobile phones became cheaper, the sound quality improved and new functions were added, it eventually displaced the analogue phones.

Sources
Christensen, C.M. (1997) The Innovators Dilemma, Harvard Business School Press, Cambridge, Massachusetts.

Find out more: www.disruptiveinnovation.se