Disruptive innovation summary.docx - Disruptive innovation is often associated with tech start-ups that overthrow bigger incumbents Yet the man who

Disruptive innovation summary.docx - Disruptive innovation...

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Disruptive innovation is often associated with tech start-ups that overthrow bigger incumbents. Yet the man who invented the theory of disruptive innovation, Harvard Business School professor Clayton Christensen , says the term is “widely misunderstood” and commonly applied to businesses that are not “genuinely disruptive”. The theory goes that a smaller company with fewer resources can unseat an established, successful business by targeting segments of the market that have been neglected by the incumbent, typically because it is focusing on more profitable areas. As the larger business concentrates on improving products and services for its most demanding customers, the small company is gaining a foothold at the bottom end of the market or tapping a new market the incumbent had failed to notice. This type of start-up usually enters the market with new or innovative technologies that it uses to deliver products or services better suited to the incumbent’s overlooked customers at a lower price. Then it moves steadily upmarket until it is delivering the performance
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