Thursday, October 28, 2010

Christensen’s Disruptive Innovation Theory

I was just looking through some old material (from a book titled ‘Managing for innovation’, author unknown) on innovation from a course I did a while ago and was thinking about how this may apply to some current technological developments, in particular tablets and smartphones. The Christensen’s Disruptive Innovation Theory (by Clayton Christensen) brings some interesting insights.

What he discusses how a mainstream market can be disrupted by something that begins initially as a ‘fringe business [which] has moved into the mainstream and eventually changes the rules under which the mainstream operates’.

There is also discussion on how these ‘new players who rewrote the rule book for one generation found their markets disrupted in turn by a later generation of players doing the same thing to them’ and that by ‘riding along on one particular bandwagon makes the enterprise vulnerable in its ability to jump on to the next one when it starts to roll’.

In reference to tablets and smartphones, the fringe business can be seen as the iPads and iPhones, and how iPad tablets have changed the market for consumers (and businesses) who desire basic internet connectivity and specific applications (‘apps’) designed to suit their needs. Now, other firms seeing this shift are starting to introduce their alternative tablets. With the iPhones, the fringe business was offering groovy user-friendly device that facilitated internet access on the go rather than only allowing for calls and sms. It’s now changed that market which is now filled with the growing number of phones with internet connectivity.

The key challenge pointed out by Christensen through what he terms the ‘innovator’s dilemma’ is that there may be ‘difficulties established players have in simultaneously managing the steady-state (sustaining) and the discontinuous (disruptive) aspects’. That is, many of the new entrants will be only starting on the learning curve with their initial releases (if these successful enough) will find themselves determining where they stand with the products and/or services that have been offering with the new ones…

I found it interesting to view this from this theory’s perspective. Please feel free to share your views as well if you’d like to share them :) 

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