|Key Concepts – Disruptive Innovation
Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.
Professor Christensen’s 2-minute explanation of Disruptive Innovation
An innovation that is disruptive allows a whole new population of consumersaccess to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill. Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics.
Some examples of disruptive innovation include:
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