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In: Economics

Explain how disruptive innovation affects sustainability in the context of a selected industry. Support your answer...

Explain how disruptive innovation affects sustainability in the context of a selected industry. Support your answer with relevant examples.

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Expert Solution

Disruptive innovations are the new innovations whose applications can significantly affects a market or industry's functions. They create a new market and value system which eventually disrupts the existing market.

- These kinds of innovations have ahigh risk of failure as compared to sustaining innovations(it is a process that improves the operations on a predictable time frame.)

- They initially offers a lower performance as compared to what the mainstream market has historically demanded.

-However, once developed, these innovations achieve faster penetration and builds a higher degree of impact on established market.

- Companies are failed becaused they are misguided, when they continuously listen to their current customers.

- The problem with the big companies and industries is that their business environment doesn't allow them to pursue disruptive innovations, because they are not profitable in their initial times.

- Companies are not comfortable with it, because it doesn't satisfy their current customers. It only focus on mainstream customers.

-Moreover these kinds of innovations burn huge amount of resources which we can utilise for competing with our current customers needs.

-Lets take an example of transistor radio:

When the transistor radio was first launched in the market , they offered poor sound quality as compared to other big analog traditional radios. However ,they were portable and consumed less battery, opened the doors for the new value market. It become popular among the college students and working people who needed a portable device to listen to music at their workplaces. And as the sound quality improved, it eventually displaced the traditional big furniture radios.

- You can also takes the example of disk drives, they also evolving its storage and performance as per the demands of their customers. But they never able to completely satisfiy the demands at any particular time as the customers always demanded better storage capacity.


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