flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

What Disruptive Innovation Really Is

Editor's Note: Take a look at our featured best practice, Digital Transformation Strategy (145-slide PowerPoint presentation). Digital Transformation is being embraced by organizations across most industries, as the role of technology shifts from being a business enabler to a business driver. This has only been accelerated by the COVID-19 global pandemic. Thus, to remain competitive and outcompete in today's fast paced, [read more]

* * * *

Editor’s Note: Dr. Lucell Larawan is a seasoned business mentor and entrepreneur, as well as Flevy author.  On Flevy, he recently published a framework, Sculpting Quality and Performance Excellence.

* * * *

DisruptivetechnologyThis is now a strategic management buzz: disruptive innovation. But what does the buzz really mean?  Here is an expert opinion:

Disruptive innovation describes a process by which a product or service takes root in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors or completely removing competition – Matt Christensen, Journal of Applied IT in Investment Management, January 2015

Some investment companies apply disruptive innovation in the following approaches:

  • a) search for product opportunities in areas that are repulsive for mainstream investors;
  • b) invest resources in product development and research in business areas in flux such as on risk exposure and technology; and
  • c) use an avant-garde approach to product development; start small, prepare for rapid scaling.

Though the strategy buzz mentioned has gained more popularity, the idea’s main tenets have been widely misconceived and frequently misapplied. Many consultants and researchers use “disruptive innovation” to describe any condition in which businesses are shaken up and previously fruitful incumbents falter. But this is much too broad a usage.

What then constitutes disruptive innovation? Consider: first, disruptive innovations originate in low-end or new market grounds. They shake because incumbents pay less attention to less-demanding clients and typically try to provide ever-improving products to their demanding customers.

Disrupters create a market that did not exist before. They turn non-consumers to consumers. To illustrate: Xerox targeted big corporations and exact high prices. Then later, new entrants introduced personal copiers and a new market was born.

Aside from starting from low-end or the new market foundation, disruptive innovations do not try to flourish with the mainstream’s customers until quality levels up to their standards. Disruptive innovation differs from “sustaining innovation”: the latter merely transforms the good into better in the eyes of existing clients. The known approaches: the fifth blade in a razor, the clearer TV picture, the faster internet connection. These upgrades can be incremental enhancements or major developments, but they all are aimed at increasing revenue from the most profitable clients. Disruptive innovation, on the other hand, is temporarily looked down as second-rate by most of the incumbents’ customers. Customers, usually, are not inclined to switch to the new service or product merely because of its lower price. They rather wait until its quality peaks enough to satisfy them. If this happens, they adopt the new innovation and accept its lower price.

Looking at the business model of Uber taxi, is it disruptive? Uber is an on-demand transportation service which has brought a dramatic alteration in the taxi industry in many parts of the world. Uber has made it possible for passengers to simply tap their smartphone and have a cab arrive at their location in the minimum possible time. Some experts, however, do not consider it “disruptive” enough because of the two conditions mentioned above. Rather, it is just an improvement on the traditional idea of a taxi service.

32-slide PowerPoint presentation
The Business Case is an instrumental tool in both justifying a project (requiring a capital budgeting decision), as well as measuring the project's success. The Business Case model typically takes the form of an Excel spreadsheet and quantifies the financial components of the project, [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources


407-slide PowerPoint presentation
This is a very comprehensive document with over 400+ slides--covering 58 common management consulting frameworks and methodologies (listed below in alphabetical order). A detailed summary is provided for each business framework. The frameworks in this deck span across Corporate Strategy, [read more]


 
1150-slide PowerPoint presentation
 
 
103-slide PowerPoint presentation

About Lucell Larawan

Dr. Lucell A. Larawan established intellectual leadership as one of the editors of business journals run by the American Research Institute for Policy Development; the International Journal of Social Sciences and Arts; and the Journal of Harmonized Research in Management. He has had a long and accomplished career in business mentoring and entrepreneurship. You can view his LinkedIn here and his Flevy frameworks here.

,



Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.