Sample Business Studies Dissertation Chapter Paper on Literature Review: Disruptive Innovation

Literature Review: Disruptive Innovation

Introduction

Disruptive innovation when perceived in relation to the prevailing market model entails the desire by small companies to establish a foothold in the market through introducing rapid expansion of its initiatives in the market. This approach to innovation does not seek to establish some form of sustainable products but a product that can perform the services offered in at a relatively cheaper price. The main objective of this literature review is to provide an in-depth analysis of the different techniques that have been employed to ensure the rise and popularity of disruptive innovation. This analysis will be through an in-depth understanding of the content of peer-reviewed journals and books on the subject matter.

The concept of disruptive innovation and the prevailing business model

Every market in the business world is defined by a trajectory of performance improvement that customers can not only absorb but also use in satisfying their needs. This means that customers in a given market are distributed across different performance trajectories in relation to that which they can utilize. There are customers located at the high end of a market (Yu and Hang, 2010). These are customers with high demands and are often willing to purchase high-end products, which are largely expensive. There are also low-end customers whose satisfaction is derived from less expensive and simple products. The tendencies by a company to sustain innovation are critical because it facilitates the movement of products up the performance trajectory. This means that it is the objective of companies to engage in a continuous process aimed at the improvement of their products in every market. This increases the possibility that such companies will outshine the ability of the target customers to purchased and use this process of product sustainability.

The emergence of a disconnection between the qualities of a product and the capabilities of customers to use these products crates an opportunity for disruptive innovation. This approach to innovation in the view of  Christensen (2008) is a platform where companies that base tie innovative ideas on sustainability create opportunities for more convenient, simpler and low cost products to be offered to those consumers who have no desire of keeping up with an hastened pace of innovative change. There are two types of disruptive innovation. The first one is the new market disruption. This approach to disruptive innovation often succeeds because it brings new consumers into an already established market. According to Christensen (2008), personal computers serve as an example of personal computers as a new product in the market necessitated by disruptive innovation.

This innovation is considered disruptive since its initial customers were also new consumers who had not used the previous generations of products or services which were relatively complicated to use and expensive in terms of purchase. This approach to disruptions facilitates the creation of a new value network. The second type of disruptive innovation in the view of Christensen (2008) is the low-end disruption. This approach to disruptive innovation targets the least profitable and the most served consumers positioned ta the lower end of the original value network. This approach to disruptive innovation according to Christine (2008) is considered a common phenomenon in the retail market. There are also disruptive innovations that can be considered as hybrid since they combine both the low-end and new markets in the development of new products and services. The Southwest Airlines was able to register success in the airline market through the hybrid approach to disruptive innovation. Initially the airline targeted consumers who were not flying but preferred driving and rail transport. The company hover began pulling its customers from low-end markets of the major airlines hence improving on its customer base and competitive advantage in the highly competitive airline industry.

While borrowing from the works of Christensen (2008), Yu and Hang (2010) argues that three essential elements define disruptive innovation. The first element is the rate of improvement and the ability of customers to utilize and absurd a product. The second element is the pace of technological growth, which symbolizes the rate at which companies can develop new concepts and traits to their products to increase customer traffic. In almost every industry, the rate of technological growth is often higher than the rate of performance, which customers can absorb. This often occurs when companies attempt the satisfaction of customers who are yet to be satisfied by the existing products.

Figure 1.0 Disruptive innovation model

This trend is among customers who demand for more products with high qualities and are able to afford the said products. When laptops came into the technological market they were preferred compared to other technological products such as personal computers. The preference of these machines was in their mobility despite relatively lower levels of performance compared to personal computers. At this point, the laptops can be said to have ne below the dotted lines in Figure 1.0. Since their introduction, the performance of laptops has continued to improve and they currently contain more power compared to the ability of the average consumer to absorb. This development facilitated the indirect creation of notebooks; iPads and tablets, which are relatively smaller, more portable but relatively, low on performance compare to the average laptop computer. These machines are cheaper; they have a longer battery life and are about half the weight of a normal laptop. The improvement of laptops in terms of performance have facilitate their movement form the dotted line enabling tablets and iPads to acquire a significant share of the market by starting a new trend in term of its mobility.

 The third element that defines disruptive innovation in the view of Yu and Hang (2010) is difference between disruptive innovation and sustainable innovation. The process of operating in accordance with sustainable innovations entails the development of strategies based on the demands of high-end consumers, in terms of offering products and services that are better in terms of performance compared to products that were previously available. Sustainable innovations entail the continuous incremental improvements that companies develop. They also entail leapfrogging break through innovations such as the development of the iPhone. This approach to innovation operates on the assertion that the elements of difficulty in technological innovations do not matter considering that in sustainable innovation the established competitor always emerges victorious.

Unlike sustainable innovation, the aim of disruptive innovation is not to provide high-end customers with better products. Instead, this approach to innovation causes disturbance in the market by introducing products and services with relatively low quality and performance levels compared to the existing products (King & Baatartogtokh, 2015). There are also benefits associated with disruptive innovation, they include the provision of simple to use products, relatively cheaper, and convenient considering that they are appealing to a section of less demanding customers (Danneels, 2004). According to Danneels (2004), once a product of disruptive innovation established itself in the low-end market, it begins the cycle of improvement. When the disruptive products enter the market, it is less satisfactory o most customers in the market. However, these changes with improvements in the products and more customers will be attracted to the disruptive products due to the incremental changes introduced to the product. At this point, the old products will be facing competition against the disruptive product among high-end consumers because this product operates on the advantage that it is cheaper, convenient and relatively easier to use compared to the existing products. In this situation, the disruptors are often perceived to be on a path that will ultimately eliminate the incumbents, which will be left trying to defend their products. The process of resource allocation among industry leaders in any market is designed to provide support to different aspects of sustainable innovation. This makes it relatively difficult for such companies to respond to disruptive innovations (Danneels, 2004).

Furthermore, the incumbent companies are often designed to develop strategies that facilitate upward movement in the high-end market, which is populated by customers that are more attractive. This means that such companies dedicate limited resources to the defense of the low-end market, which the disruptors find more attractive. From this perspective, it is possible to argue that the process of generating any form of disruptive innovation does not necessarily require any form of technological innovation. This is because it is possible to perceive it as an approach that requires the development of new techniques that can be used in the delivery of value. In an attempt to provide better services through disruptive innovation, Dow Corning introduced a disruptive distribution channel dubbed Xiameter. The main aim of this channel of distribution was to capture a low margin segment that the company had previously neglected. An additional reason for the development of this channel of distribution was because silicone had become an essential commodity and the main area of demand for the product was among smaller companies, which operated on smaller budgetary allocations for purchases. The company through its management developed this distribution channel based on the understanding that any continuation in neglecting this market was a risk to the company’s long time prospect of attracting new customers to the business.

Principles of disruptive innovation

One of the greatest threats to highly successful fortune 500 companies is disruptive technological innovation. This approach to innovation thrives irrespective of the in-depth planning and strategies aimed at making these companies more customers driven. The problem emanates from the understanding that the decision by the management of successful companies to target a segment of the market while ignoring a perceived lower segment of the market (Danneels, 2004). This creates some form of discrimination in the market increasing the changes that those in the lower end of the market will fail to access the product in demand due to their expensive nature. The role of disruptive innovation is to introduce some changes in the market through the launch of products that play the same role as those in the high-end market but are of relatively lower quality cheaper and affordable to those customers who do not consider trends and the high qualities of products (Danneels, 2004).

Inasmuch as the solutions to disruptive innovation are not available in the standard tool kit of effective management, there are sensible ways that can be applied when dealing with this disturbance to the market. Every organization in the market operates in accordance with specific laws of organizational management. These laws act in a powerful way in defining elements that they can and those that they cannot do. Managers who fail to challenge the element of secretive innovation may be considered failures in management if the forces that define their disruptive innovation are more powerful.

Principle 1: Companies are highly dependent on investors and customers for resources

The principles of disruptive innovation according to Danneels (2004) provide techniques through when managers of highly successful companies can harness and understand the forces of change. When this principle is perceived in relation to the computer manufacturing industry, it is possible to develop the arguments that all the established computer-manufacturing companies were highly competitive in the market because of their ability to produce sustainable technologies that were in agreement with the demands of their customers. The success of these companies was however not without simple disruptive innovations. This assumption is in agreements with the theory of resource dependence, which purports that it is possible for the management in an organization to consider themselves as the controllers of the flow of resources in their companies.

However, in the end in the view of Anthony et al (2008), they discover that the decision makers on ho money and other resources in a company can be spent are often the investors and the customers. This is because it is impossible for investors to survive in a company that does not satisfy its customers. Highly performing companies are those that eliminate ideas and products that their customers do not demand and this makes it relatively difficult for such companies to survive effectively when faced with disruptive innovations in the market. The failure of such companies is that when a product is introduced in the lower end of the market, they tend to ignore the products since their customers do not have the desire. However, when customers begin demanding for those products in the lower end it is often relatively impossible for the high profile companies to strategize since it is time consuming and relatively expensive.

One way by which the management of any company can ensure that it aligns or harnesses this principle in an attempt to confront disruptive innovation is by setting up an autonomous organization charged with the responsibility of building an independent and new business around the disruptive innovation. Such an organization operates free from the customers of the mainstream company while attracting new customers into the business, especially those who are interested in new products. The benefits of this approach to dealing with disruptive innovation is that the management identifies ways of aligns themselves with forces defining resource dependence instead of opposing them (Anthony et al, 2008).

An additional implication of this approach towards managing disruptive innovation is it presents a threat that cannot be addressed through the allocation of financial and human resources needed to establish apposition in the high-end market. This explains why the creation of a new and independent organization with a cost structure that is profitable in the low-end market aligns the company into the traits of the disruptive technology (Danneels, 2004). This comprises a viable way through which an established company can ensure that it remains competitive at both ends of the market despite the threat presented by any form of disruptive innovation.

Principle 2: Small markets cannot provide solutions to the growth needs of larger organizations

Disruptive innovation according to Anthony et al (2008) facilitates the emergence of new markets. Existing evidence suggest that companies that enter into these markets possess a significant first mover advantage compared to those that will enter later. As the established companies succeed in these markets and grow larger, it becomes relatively difficult for them to enter newer and smaller market, which is destined to evolve into larger markets in the future. It is important for successful companies to ensure that they are able to maintain their share price and ensure the creation of internal opportunities, which enable their employees to lengthen the range of their responsibilities (Anthony et al, 2008). This means that it is the responsibility of these companies to ensure that they are constantly growing. According to Kim and Mauborgne (2004), established and large companies operate on the red ocean, which is characterized by industrial boundaries and stabled rules of competition. In this, market the aim of company’s id to outperform their rivals to ensure that they maintain a competitive advantage in their respective markets. One of the failures of most companies in relation to disruptive innovation is that they wait for the smaller and new markets to grow into large and established markets before developing an interest in the market. This is however not often a successful strategy since it would require some element of strategizing to develop ways of tailor making the company’s product to fit in an already established market with competitors (Anthony et al, 2008).

The success of large and established companies in penetrating the new and smaller markets according to Anthony et al (2008) is often attributed to the ability of these firms to allocate the responsibility of commercialization the disruptive innovation to an affiliate organization whose size matches that of the targeted market. Such decisions are based on the assumption that it is possible for small to develop effective response strategies and identify opportunities that facilitate their growth in the small and emerging markets (Anthony et al, 2008). An additional reason is that the process of resource allocation to smaller markets by larger organizations may be relatively difficult been in situations where it seems like the smaller market has the potential of growing into larger market (Anthony et al, 2008).

Principle 3: it is impossible to research markets because they do not exist

There are specific aspects that define good management practice such as sound market research, effective planning, and execution of organizational responsibilities according to the existing plan. When this approach to management is applied in sustainable innovation, they provide sufficient reason for the success of large and established companies (Danneels, 2004). These approaches are considered pragmatic in dealing with sustainable innovation because of the existing knowledge of the size and growth rates of the markets. In addition, in such markets in the view of Danneels (2004) there are established trajectories of technological development and the successful articulation of essential customer needs. Such a market operates from a point of information considering that the vast majority of innovations are naturally sustainable. Furthermore, according to Kaplan and Orlikowski (2014), most of the executives in such an organization have experience in the management of innovations in a sustainable manner considering the feasibility of the levels of organizational analysis and planning.

The situation is however different when dealing with disruptive innovation targeting new markets. This is because disruptive innovations deal with markets that are yet to be established, which makes the planning process on how a business will expand as the market grows a relatively complex process (Danneels, 2004). In sustainable innovations, the management operates on information that is known to asset in planning. It is in disruptive innovation where the least information about the market is available. An innovator’s dilemma arises in this situation considering that inasmuch as there are signs for potential growth in the market, it becomes relatively difficult for an organization to plan to a market whose expansion is questionable (Anthony et al, 2008).

Companies with an investments process, which demands for the quantification of market sizes and financial returns, may face difficulties when entering a market characterized by disruptive innovation. Such companies often demand market data or financial projections to facilitate their judgment on whether to enter the market (Anthony et al, 2008). In the absence of these elements to facilitate the decision making process, it becomes impossible for such companies to use strategies and plans for developing and managing sustainable innovations due the difference in context. Despite the existing difficulties, it is possible for the management in the already established companies to embrace discovery market based planning. This approach operates on the assumption that managers in disruptive markets assume that forecasts are wrong and this may lead them into pursuing strategies that are also wrong hence the need to conduct market research prior to investment (Anthony et al, 2008). This approach to market penetration permits mangers to develop that will allow the process of learning that which must be known to enable the development of effective strategies on how to ensure successful management of disruptive technology (Anthony et al, 2008).

Principle 4: The capabilities of an organization are essential in the definition of its disabilities.

In the process of tacking innovation related problems, it is often the responsbility of the management to assign those considered capable in executing the job. Upon assigning the right people to the task, the management often assumes that the organization will be capable of handling the existing problem (Anthony et al, 2008). This is a dangerous assumption because organizations also have abilities, which exist independent of those who work within them. The capabilities of an organization can be found in two places. The first is in the processes that define the operations of the organization. These are inclusive of the methodologies through which the employees have learned how to transform inputs such as labor, monetary resource, and technological resources into highly valued outputs (Anthony et al, 2008).

The second set of capabilities according to Danneels (2004) can be found in the values that define the activities of the organization. These values define the criteria which the stakeholders in an organization use in the decision making process. Processes and values unlike people are not flexible. A process that is effective in that management of mobile phone technology for instance may be less effective in the management of the design and development of desktop computers. Furthermore, values that lead employees into prioritizing project and develop high margin products cannot be used in according priority to low-margin products. This is an indication that processes and values that define the capabilities of an organization in a specific context can be used in the definition of its disabilities in another context (Danneels, 2004).

For an organization operating in the high-end markets, it would be possible to use the same processes and values in penetrating low-end markets especially when threatened with disruptive innovation. This can therefore mean that it is the responsbility of the management to assess the disruptive innovation when it emerge and develop workable strategies that can be used in the development of new values and processes. These can be used in effective management of smaller markets and relatively new products in these markets as a way of establishing a competitive advantage (Anthony et al, 2008).

Principle 5: It is possible for technology supply to fail to equalize market demand

Despite the underlying assumption that disruptive innovation can only be used in satisfying demand in small markets away from the mainstream markets; the disruptive nature of these technologies may make them fully competitive with established products in the mainstream market (Danneels, 2004). This is considered a possibility because it is possible for the pace of technological progress in products to exceed the rate of performance improvement that customers in the mainstream market can absorb. The consequence is that products with features and functionalities that are closely related to the prevailing needs in the market have the ability to follow a trajectory of improvement. This trajectory allows them to overshoot the needs of the mainstream market in the future (Anthony et al, 2008). Consequently, products that are considered as underperformers in the market may improve in terms of their ability to compete in the mainstream market in the future. When this situation occurs in diverse markets such as the mobile phone industry, the criteria used by customers in products often changes. When the level of performance of two competitive products improves the prevailing demand in the market, it is possible that customers will cease basing their choices on the product targeting the high-end market (Danneels, 2004). This is an indication that it is through disruptive innovation that the basis of product choice among customers evolves from functionality to reliability. The customers then consider additional elements such as convenience and then price of the product. In the process of developing strategies aimed at maintaining a competitive advantage in the market, many companies often fail to notice the speed by which they are moving up the market and surpassing the expectations of the initial customers while racing to secure a position in the highly competitive market. By aiming at high-end markets these companies, facilitate the creation of a vacuum at lower price areas, in which competitors with the ability to employ disruptive innovation can enter and secure the market (Anthony et al, 2008).

High and low-end disruptive innovations

While supporting the assumptions of Christensen on disruptive innovation, Govindarajan and Kopalle (2006) contend that the process of redefining the meaning of this concept will require the development of a workable distinction between high and low-end disruptive innovation. Low-end disruptive innovation can be associated with innovations whose life cycles begin at the lower segment of the market. This is concerning the ability of the resulting product to appeal to consumers who are largely price sensitive. This is different from high end disruptions which in the view of  Rogers (2003) can be associated to their radical nature in terms of their intention to compete with existing products in the market not on price related issues but by offering distinctive features. Rodgers (2003) argues that the concept of high-end disruptive innovation can be associated with the classical diffusion theory, which contends that the integration of the new product in the high-end market is a well-defined process that begins with creating a lasting relationship between the early adopters of the said products. This association will serve as a marketing platform that will facilitate the process penetrating the mainstream market. High-end disruptive innovation is therefore an approach that emphasizes on the essence of identifying the niche market of already existing products and developing products with better or similar products with the objective of establishing a position and improving the nature of competition in the target market (Rogers, 2003). Disruptive innovation when perceived in relation to low end market is a market based dimension that makes reference to the extent to which an emerging customer  segments ha the ability to see an added value in an innovation at when it is introduced in the market. This is however different according to Govindarajan and Kopalle (2008) radical nature of an innovation which is technologically based and refers to the novelty of a product or service rather than its impact in the market. This means that it is possible for an innovation to assume a radical position without necessarily being disruptive (Leifer, 2001).

While offering a suggestion on the difference between high and low-end disruptive innovations, Yu and Hang (2010) argue that this approach to understanding the nature of innovation si only possible when it is classified into a four-field matrix. The success of this approach to the classification of low and high –end disruptive innovation can be made successful when the produce preface is essence in accordance to the attributes of the traditional products already in the market. In addition, this can also be made possible by using a disruptive innovation in terms of its novelty and its ability to affect both high and low-ends of the market. Schmidt and Druehl (2008) attempt to provide further clarification by developing a complementary framework, which provides a platform for mapping the direction of product diffusion in a market during disruptive innovation. This process can begin from the high or the low-end while also considering the type of innovation in relation to its novelty.

The approach by Schmidt and Druehl (2008) when considered in relation to different types of innovation presents different techniques that can be applicable in terms of diffusion. Sustainable innovation for instance focuses on the ability of a product to encroach into the high-end market. This approach to innovation holds the assertion that when a new product is introduced into the market it first encroaches into the high-end market before diffusing to the lower end of the market as in the case of Pentium IV computers when they were introduced to replace Pentium III. This is however different in the view of Schmidt and Druehl (2008) from disruptive innovation whose type of diffusion is that of the low-end market. When introduced into the target market the products begin its life cycle by encroaching into the low-end market before diffusing into the high-end market. Its ability to diffuse upwards is however dependent on the ability of the producers of the product to improve on its performance while maintaining it original qualities such as the simplicity of operating and convenience. In low-end disruption, the discount provided to products is often depend rant on the location of the retail store and the ability of the target customers to afford it.

This approach to assessing the nature of the existing disruptive innovation can only be considered a possibility in situations where the targeted companies on either the low or the high end markets desire to recognize, assess risks and opportunities that are available before encroaching in the innovation (Rogers, 2003). For successful implementation of disruptive innovation initiatives in the low-end market, companies have the responsbility of identifying the market segments and primary attributes of the products in the target market. It is also their responsbility to assess the level of willingness of the market and the ability to pay for the product attributes identified. In addition, successful disruptive innovation also prevails on the assessment of the market segments that can be involved in the purchase of specific products overtime (Yu and Hang, 2010).

The predictability of disruptive innovation and technology

The extent to which a company in the highly competitive market is able to ensure navigate elements of disruptive innovation is on its ability to predict the disruptions. According to Christensen (2008), the essence of such an approach is founded on the ability of the management to develop concepts that can anticipate and predict disruptive trends. Critics of disruptive innovation argue that analysts of the success of this approach to innovation with respect to successful companies should consider luck as one of the explanations for the success companies in the exploitation of shift in disruptions while others could be considered as victims of these changes. One of the challenges in making decisions on research and development from the perceptive of disruptive innovation is that the companies that emerge as winners are rarely clear of their objectives at the beginning. A specific challenge is in the context upon which the criteria of assessing the potential of disruptive innovation can be defined Govindarajan and Kopalle (2006).

According to Christensen (2008) this process can be defined in the definition of arcs of improving the performance of products as required by the prevailing market conditions against the performance improvements that resupplied by the existing technology. The challenge of this approach to understanding disruptive innovation in the view of Govindarajan and Kopalle (2006) it requires instant knowledge of the performance criteria. This entails knower of the demand of the future market and possessing data for the technologies that are competing in the market. This is howler relatively impossible when disruptive innovation is at its infant stages. In their investigation of whether it was benefit ail to engage in the measure of a disruptiveness of any innovation, Govindarajan and Kopalle (2006) conclude that the framework of disruptive technology is not benefit ail in making predictions about the type of companies that are most likely to develop a disruptive innovation. This framework is essential in understanding the disruptive innovation because it present numerous of opportunities for conducting future research studies.

Harnessing disruptive innovation

It is the responsbility of all organizations in the market to perceive disruptive innovation as a source of change experienced in the context of an organization. There are different approaches that organizations can use in the process of harnessing disruptive innovation as a source of advancement or as a potential threat in the market. When a disruptive innovation is perceived as source of advancement, it is the responsbility of the companies concerned to assess their level of involvement or the potential benefits that exist when they embrace the disruptive technology (Yu and Hang, 2010). This is in the view of Leifer (2001) is especially with regard to the opportunities that the said innovation presents in terms of market share and customer base. This is however considered a possibility for companies targeting the lower-end of the market considering that they will need limited resources since the target customers will purchase the resulting product based on its simplicity in usage and convenience in terms of price. The clients targeted by a disruptive innovation at the initial stages are those whose desire for products does not include the prevailing trends in terms of fashion (Danneels, 2004).

Companies especially those in the high-end market can consider disruptive technology as a threat to their existence and their positions as market leaders. The threat according to Markides (2006) emanates from the understanding that disruptive innovation introduces products that can lay similar roles but are available at relatively low prices, are convenient to use and simpler in term of their level of sophistication. Inasmuch as disruptive innovation targets the low-end market, which does not stand as a priority to the established companies in the high-end market, the management of these companies understands threat it is because of their failure to secure the market that smaller companies have identified gaps. An additional threat is that as the market expands the products resulting from disruptive innovation continue to develop in terms of additional features hence attracting consumers already targeted by established companies in the high-end market (Danneels, 2004).

The conceptual framework of disruptive innovation

Recognition of opportunity

Organizations in the view of Markides (2006) are interested in the introduction of any form of disruptive innovation have the responsibility of engaging in in-depth market research to enable the identification of the opportunities available in the market. The process of opportunity recognition involves initiatives such as brainstorming and the generation of ideas based on the past, present and the future approaches that can be used in the penetration of a market populated by established organizations. This process also allows for in-depth research on how the innovation in the area of interest originally occurred and the changes that have been introduced to characterize the future trends (Markides, 2006).

Development of an opportunity

Upon effective reflection of the prevailing market conditions, an organization introduced in the introduction of disruptive innovation must develop a plan that will detail idea selection process that will detail how the organization can organize itself and incorporate the innovation as part of its developmental strategy. This will also require a detailed analysis of the path of disruption, which will provide essential information about the target market (Markides, 2006).

Development of solution

For a disruptive innovation to be considered successful, it is the responsibility of the organization interested in the disruption to formulate a team and develop processes that will be effective in locating the target market and in the delivery of the innovation. This will include fleshing out ideas about a product that is yet to be manufactured or commercialized in the market (Markides, 2006).

Exploitation

Upon the development of an effective plan, Leifer (2001) argues that the organization has the responsibility of developing a plan of action, which involves the selection of the best setup innovations and the creation of marketing and distribution channels. The introduction of the disruptive innovation in the market will also mean that the organization must begin developing expansionist ideas to ensure that the product remains relevant to the consumers in the future. The process of developing future strategies for the product will entail an analysis of the level of acceptance of the product in the target market and the development of customer-oriented solutions to serve the purpose of increasing customer traffic in the future.

Disruptive Innovation as propounded by Clay Christensen presents the view that the success of any disrupters is dependent on their ability to break into an established market by targeting the low-end market that is often ignored by successful companies. Such disruptors often begin by providing alternative but inferior products as they find their way into the high-end market. One of the challenges facing this approach to understanding disruptive innovation is that it imposes a relatively narrow definition. Christensen purports to have a monopoly of the definition of disruptive innovation while ignoring the dynamic nature of innovative markets. Successful companies such as Apple did not begin their entry into the market by targeting the low-end market but by targeting the high-end. Christensen’s definition of disruptive innovation further ignores companies and businesses that have offered better level service compared to existing companies by insisting that it is required that such companies must begin with inferior products and services for the low-end market. In the contemporary society, it is possible to define disruptive innovation as an approach that aims at the revolution of old industries with new technology. Disruptive innovation is not just a preserve of the new companies but a technique that existing companies can use in establishing a competitive advantage.

Summary of review and areas for future studies

An effective understanding of the concept of disruptive innovation can be considered possible if additional studies are conducted on the differences between this approach to innovation and non-disruptive innovations. An additional area would be to redefine disruptive innovation because of the vagueness of the existing definition. If technology is considered a threat to the incumbents of the industry and an opportunity to new entrants, then questions arise on whether technology is inherently disruptive or if its disruptive nature differs in varied markets.

The aim of disruptive innovation is not to provide high-end customers with better products. Instead, this approach to innovation causes disturbance in the market by introducing products and services with relatively low quality and performance levels compared to the existing products. Companies especially those in the high-end market can consider disruptive technology as a threat to their existence and their positions as market leaders. The threat emanates from the understanding that disruptive innovation introduces products that can lay similar roles but are available at relatively low prices, are convenient to use and simpler in term of their level of sophistication.

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