Paper 1.docx - Disruptive Innovation Literature Review 1 Literature Review of the Disruptive Innovation Theory Name Institution Date Disruptive

Paper 1.docx - Disruptive Innovation Literature Review 1...

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Disruptive Innovation Literature Review 1 Literature Review of the Disruptive Innovation Theory Name Institution Date
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Disruptive Innovation Literature Review 2 Disruptive Innovations Models Innovation is a crucial element of every firm’s strategy. Understanding the reasons that make incumbents fail when faced by innovation is an issue that most scholars explain using technological capability or structural dynamics. Today, disruption is often associated with a situation where technology ushers in a significant business or market variations and disruption of the incumbents. The technology s-curve is a powerful model that traces the interaction between product performance and engineering efforts. The early versions of products have poor performance. An example of this instance is the emergence of digital cameras. At first, firms pour many engineering efforts into innovation, but the product performance varies a bit. Gradually, product performance grows intensely with a decrease in cost; thus, the firms attract more customers. However, the firms eventually reach limits where the engineering possibilities are reached, and innovation does not increase product performance anymore. The ‘s’ curve is shown in figure 1: Figure 1: Technology ‘s’ Curve. Available on galsinsights. Link: Why Incumbents Ignore Innovation Innovation brings to the market functionalities that are quicker, lighter, smaller, more
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Disruptive Innovation Literature Review 3 mobile, and easier to use. Although innovation does remarkably new things, incumbents ignore disruptive innovation because at that time product performance is poor as seen in figure 1 (s- curve). But with time, new firms learn from their mistakes and improve functionality and introduce new forms of functionality into the market, and thus succeed in transforming existing markets putting incumbents out of the market. Key Elements Disruptive innovation theory has several key factors. Some of these factors are sustaining innovation, entry of disruptive innovation, failure of the incumbent firms to respond to the disruptive innovation, and lastly the incumbent stumble due to inability to effectively respond to the disruptive innovation (King and Baatartogtokh 2015: P. 4-5). It is essential for one to understand these elements for one to get a good grasp of the disruptive innovation theory. In the beginning, the disruptor introduces what is quicker, lighter, more mobile, easier to use and more exciting. The product does not solve all the market needs, but “in every market, there is a distinctly different trajectory of improvement that innovating companies provide as they introduce new and improved products.” (Christensen and Raynor 2003: P. 5). However, the disruptor achieves one thing here: advancing its state of business or technology. At this time, the
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