Disruptive Innovation

The definition of insanity is doing the same thing over and over again and expecting a different result each time. -Albert Einstein

• Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. 

Types of Disruptive Innovation
• Business Model innovation • Product Innovation

Business Model Innovation
• Discovery of a fundamentally different business model in an existing business. • the new business model must enlarge the existing economic pie, either by 1) Attracting new customers into the market or by 2) Encouraging existing customers to consume more e.g. Amazon

Radical Product Innovation
• Radical innovations are disruptive to both consumers and producers • E.g – Mobile phone, Personal computers

Conventional Shareholder Value Model

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