How does disruptive innovation work?

dubai — The man who invented the theory of disruptive innovation, Harvard Business School professor Clayton Christensen, says the term is “widely misunderstood” and commonly applied to businesses that are not “genuinely disruptive”. So, what is disruption and how does it work?

In a December 2015 article for the Harvard Business Review, Christensen and co-authors Michael Raynor and Rory McDonald cleared out the confusion over ‘disruptive innovation’.

Disruptive innovation is 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 the market, eventually displacing established competitors.

According to an article by the World Economic Forum, “as the larger business concentrates on improving products and services for its most demanding customers, the small company is

This type of startup enters the market with new or innovative technologies to deliver products better suited to the incumbent’s overlooked customers.”

gaining a foothold at the bottom end of the market or tapping a new market the incumbent had failed to notice.”

The article explained Christensen’s theory that this type of start-up usually enters the market with new or innovative technologies that it uses to deliver products or services better suited to the incumbent’s overlooked customers — at a lower price.

Then it moves steadily upmarket until it is delivering the performance that the established business’s mainstream customers expect while keeping intact the advantages that drove its early success. Think Blockbuster and Netflix.