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Please help improve it or discuss these issues on the talk page. This article needs additional citations for verification. The examples and perspective in this article may not include all significant viewpoints. Not all innovations are disruptive, even if they are revolutionary.
For example, the first automobiles in the late 19th century were not a disruptive innovation, because early automobiles were expensive luxury items that did not disrupt the market for horse-drawn vehicles. Disruptive innovations tend to be produced by outsiders and entrepreneurs, rather than existing market-leading companies. Beyond business and economics disruptive innovations can also be considered to disrupt complex systems, including economic and business-related aspects. The term disruptive technologies was coined by Clayton M. Christensen and introduced in his 1995 article Disruptive Technologies: Catching the Wave, which he cowrote with Joseph Bower. The article is aimed at management executives who make the funding or purchasing decisions in companies, rather than the research community. In the late 1990s, the automotive sector began to embrace a perspective of “constructive disruptive technology” by working with the consultant David E.
O’Ryan, whereby the use of current off-the-shelf technology was integrated with newer innovation to create what he called “an unfair advantage”. In keeping with the insight that what matters economically is the business model, not the technological sophistication itself, Christensen’s theory explains why many disruptive innovations are not “advanced technologies”, which the technology mudslide hypothesis would lead one to expect. Rather, they are often novel combinations of existing off-the-shelf components, applied cleverly to a small, fledgling value network. The current theoretical understanding of disruptive innovation is different from what might be expected by default, an idea that Clayton M. Christensen called the “technology mudslide hypothesis”. This is the simplistic idea that an established firm fails because it doesn’t “keep up technologically” with other firms.
Christensen defines a disruptive innovation as a product or service designed for a new set of customers. Generally, disruptive innovations were technologically straightforward, consisting of off-the-shelf components put together in a product architecture that was often simpler than prior approaches. They offered less of what customers in established markets wanted and so could rarely be initially employed there. They offered a different package of attributes valued only in emerging markets remote from, and unimportant to, the mainstream. Christensen argues that disruptive innovations can hurt successful, well-managed companies that are responsive to their customers and have excellent research and development.
While Christensen argued that disruptive innovations can hurt successful, well-managed companies, O’Ryan countered that “constructive” integration of existing, new, and forward-thinking innovation could improve the economic benefits of these same well-managed companies, once decision-making management understood the systemic benefits as a whole. How low-end disruption occurs over time. Christensen distinguishes between “low-end disruption”, which targets customers who do not need the full performance valued by customers at the high end of the market, and “new-market disruption”, which targets customers who have needs that were previously unserved by existing incumbents. Low-end disruption” occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product that has lower performance than the incumbent but that exceeds the requirements of certain segments, thereby gaining a foothold in the market. In low-end disruption, the disruptor is focused initially on serving the least profitable customer, who is happy with a good enough product.
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