Thursday, December 26, 2019

Disruptive Innovation - 1105 Words

ENTRY 2, DISRUPTIVE INNOVATIONS In this essay I will describe and explain the causes and consequences of disruptive innovation. Firstly I will write about what dualism is, why it is important and how to achieve it. I will continue with describing difficulties, which may occur on a company’s path towards it, namely overshooting and inability to recognize the start of a new industry cycle. Further on, I will go deeper in the reasons, why incumbents fail to recognize the new entrants on the market, specifically â€Å"attack from below† and other discontinuous patterns of change. In the end I will describe some of the responses taken by established companies to disruptive technologies. In today’s world when competition is such a big factor,†¦show more content†¦This phenomenon was first identified by Gilfillan in 1935, and he named it â€Å"sailing ship effect†. It describes the way, how even though existing players on the market are often aware of approaching discontinuities, they still pursue with their current trajectories with success in the short term. Furthermore, the true significance of disruptive technology even in Christensens conception of it is not its displacing of established products. Rather, it is a great means for enlarging and broadening markets and providing new functionality. And according to Utterbacks’ explanation: â€Å"The degree to which the market was expanded by the innovation seemed to be the strongest factor favouring new entrants†, a possible conclusion might be that this leads to a never-ending circle. Nonetheless, some companies have developed different strategies to keep themselves on top. Firstly, there are companies, which pursue the strategy of entering the market created by outsiders, in a role of a follower. They allow small pioneers to lead the way into new market territory. For example: IBM let Apple, Commodore and Tandy define a personal computer (Christensen, Bower, 1995). The second possible response taken by the incumbents is creating a new market by corporate venturing. It means using a start-up to create their own disruptive technology from a separate organization. The start-up would obtain a lower profit margin than theShow MoreRelatedDisruptive Innovation749 Words   |  3 PagesDisruptive innovation Explanation of the term A disruptive innovation is an innovation that helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology. 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When conditions change rapidly, organisations find their former approaches which have led to success in the past, are no longer effective. It can be hard to let go of these approaches if they have been a source of competitive advantage. This leads many managers to assume that successful responses to disruptive change are a matter of luck. But it is possible

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