Essay On Disruptive Innovation

The concept of "disruptive innovation" was suggested by Clay Christensen in 1997 in the book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. He describes this term from different perspectives. One of the basic characteristics is that "disruptive technologies bring to a market a very different value proposition than had been available previously. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value" (Christensen 1997). Usually, it contributes to the ongoing technology development which changes industries and gradually affects the whole world. The theory is mostly based on the assumption that companies tend to innovate ahead of their customers’ needs. Thus, most of the businesses sooner or later reach the point when they produce products or services that are actually too sophisticated, too expensive, and require particular skills to operate, which makes them not affordable for many customers in their market (Christensen 1997). Disruptive innovation usually happens in a process. According to the Christensen, new technologies are separated into two categories: sustaining and disruptive. Sustaining technology built on

This kind of replacement affects industries changing balance of the market. Moreover, through the industries disruptive innovation, defined by Christensen, change customer's perception of the modern world. The extension of Skype service is a great example of such change. It is transforming people’s perception of telecommunication and how much they are willing to pay for the services (Lee &Chen 2009). Technology gradually re-shapes conditions and priorities of the modern world. Thus, disruptive innovations doesn't affect only industry or the world separately. It changes the world through the