1) What are different types of innovation? Example of each types of innovation.

Impact of
each type of innovation chart.

 There are three types of innovation which are as follows:

a) Sustaining innovation
b) Disruptive innovation
c) Radical innovation

a. Sustaining innovation

 Incremental innovation that enables or sustains an existing product. It does not create new
markets or value networks but only develops existing ones with better value and it allow
the companies to compete against each other’s sustaining improvements. Examples are;
there is the evolution of standard nail polish to quick-dry nail polish and development of
lipstick into transfer-resistant lipstick.

b. Disruptive innovation

 Disruptive innovation is the process of developing new products or services to replace

existing technologies and gain a competitive advantage. In other words, it is a term in the
field of business administration which refers to an innovation that creates a new market
and value network and eventually disrupts an existing market and value network,
displacing established market leading firms, products and alliances. An example is the
automobile was a disruptive technology for the horse-pulled wagon.

c. Radical innovation

 Radical innovation is an invention that destroys or supplants an existing business model.

Unlike radical innovation, incremental innovation blows up the existing system or
process and replaces it with something entirely new. It has a significant impact on a
market and on the economic activity of firms in that market, while incremental
innovation concerns an existing product, service, or method whose performance has been
significantly enhanced or upgraded.  For an example the incremental innovations in coal-
fired power generation could never have led to nuclear power, nor could incremental
innovations to cathode-ray tubes lead to flat plasma screens.

Impact of each type of innovation:

1. Radical Innovation

New means of mass communication ,Growth of mass travel, foreign holidays, New leisure
activity, entertainment New administrative system, Internet services e.g. banking.
2. Disruptive Innovation

Low Quality use to high quality use, Most demanding use.

3. Sustaining Innovation

Performance Improvement, Improves or maintains Profit Margin, Performance demanded at high

end of market.