In: Economics
Give me an example of a disruptive innovation and discuss how the innovation disrupted the market.
What is disruptive innovation-Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. Smartphones are the ultimate disruptive innovation because they have almost made the following items obsolete: landline phones, pagers, digital cameras, portable music players, portable game players, portable video players, and portable navigation and devices.Smartphones are the most successful and popular consumer electronics product with innovation in history of technologies. Multi-functional capabilities make them extremely popular, and smartphones do more while costing less. Smartphones are rapidly replacing many products in a variety of industries. For example, they are replacing print media such as books and magazines, changing this industry incredibly and making print media almost obsolete. Furthermore, mobile Internet users have increased 50% from 2010-2011, suggesting that the smartphones are in their prime product life cycle and their growth rate is strong. An example of modern disruptive innovation is the Internet, which significantly altered the way companies did business and which negatively impacted companies that were unwilling to adapt to it.a disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products, and alliances. Not all innovations are disruptive, even if they are revolutionary.The term “disruptive innovation” is misleading when it is used to refer to a product or service at one fixed point, rather than to the evolution of that product or service over time. The first minicomputers were disruptive not merely because they were low-end upstarts when they appeared on the scene, nor because they were later heralded as superior to mainframes in many markets; they were disruptive by virtue of the path they followed from the fringe to the mainstream.Success in innovation is never guaranteed. There are still many hurdles (marketing, technical, cashflow, etc.) that need to be overcome for your innovation to be a success, whether it's an incremental or a disruptive innovation.Many organizations risk complacency once their current product offerings have reached success. The fear of pulling investment, resources or customer attention from existing offerings can be one of the biggest hindrances to future innovation. However, constant innovation is the key to sustained success long-term. So it is clear that disruptive innovations have advantages with certain disadvantages.