Many people may consider that they are familiar with the term disruptive Innovation. Before attempting to discuss this topic, it would be prudent to first define what is innovation.

Definition of Innovation

The process of translating an idea or invention into either goods/products or services that creates value or for which customers will pay. Here customers can either be external customers or internal customers for example the ICT team can come up with an innovation which allows finance – accounts payable department process payments faster and efficiently reducing the number of people and time spent in processing.

To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers.


Definition Disruptive innovation
Disruptive innovation, a term of art coined by Clayton Christensen, who describes it as 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

This definition is what derives The theory of disruptive innovation which if applied by an organization, will reduce/eliminate complicated, expensive products and services with simplier and affordable ones.

The Theory of Disruptive innovation demonstrates that thre are actually two different trajectories of performance improvement in every market.

Trajectory one – Sustaining Innovation
This is the trajectory of continual improvement of a product or service that is introduced by companies over time. Although these innovations can be either small and incremental or dramtic breakthroughs they tend to sustain the existing trajectory of performance improvement. Sustaining innovation results in better products that can be sold for higher profits to the best customers.

Trajectory two – Disruptive Innovation
The trajectory of disruptive innovation is made possible because innovation gets started through two types of markets that incumbents overlooks

Low-end footholds
This exists because incumbents typically try to provide their most profitable and demanding customers with ever improving products and services, and they pay less attention to less demanding customers. This opens the door to a disrupter focused(at first) on providing those low-end customers with a “good enough” product.

new-market footholds
This is where a disrupter creats a market where none existed ie they find a way to turn nonconsumers into customers.


Impact of Disruptive Innovation on Value
With disruptive innovation, upstart companies, in an effort to deliver more affordable and accessible solutions are maode to away once dominant firts with alarming regularity, often before the incumbents and their leaders realize that their days are numbered.

Disruptive Technologies And Business-Model Innovations
The starting point of a successful business model is its value proposition: a product or service that helps customers get a job done more effectively, conveniently, and affordably. The role of the managers in this process to bring together a set of resources (people, suppliers, intellectual property – IP, equipment, budget) required to deliver the value proposition. As employees and other resources repeatedly work together to generate the product, processes emerge and become ingrained in the business model. Finally, a profit formula materializes, which defines the pricing, mark-ups, gross and net profit margins, asset turns, and volumes necessary to profitably cover the costs of the resources and processes that are required to deliver the value proposition. Over time, an established business model begins to determine the types of value propositions an organization can and cannot deliver. In other words, once the pieces of a business model have coalesced to deliver a particular value proposition, the causality of events begins to work in reverse—only value propositions that fit the existing resources,processes, and profit formula of the organization can be successfully taken to market

A Typology Of Business Models
In general, business models can be categorized into three types: solution shops, value-adding process businesses, and facilitated user networks.

Solution shops
Solution shops are institutions built to diagnose and solve unstructured problems. Consulting firms, advertising agencies, research and development organizations, and many law firms employ this type of business model. These solution shops deliver value primarily through the people they employ—experts who draw upon their intuition and problem-solving skills to diagnose the cause of complicated problems and recommend solutions—and successful firms are those that can attract the best talent. Solutionshop work tends to be unique for each customer, who is often quite willing to pay very high prices in return.

Value-adding process businesses
These businesses transform inputs of resources, such as people, equipment, raw materials, energy, and capital, into outputs of greater value. The business model is built to do this in repetitive ways so that the organization’s capabilities are embedded more in its processes than in its resources. Although some value-adding process businesses may be more efficient than others, as a whole they focus their attention on process excellence that can deliver high-quality services and products consistently at a lower cost, and they are less affected than other types of businesses are by the variability that occurs when outcomes depend on people’s intuition. Often, results can be guaranteed or redone free of charge. Retailing, restaurants, automobile manufacturing, and petroleum refining are examples of this type of business model.

Facilitated user networks.
User networks are enterprises in which the same people buy and sell and deliver and receive things to and from each other. In these types of businesses, the companies that deliver value and make money are those that facilitate the effective operation of the network and its user transactions. Mutual insurance companies are usernetwork businesses—customers deposit their insurance premiums into a collective pool, and they take claims out of it. Telecommunications companies, which facilitate calls and data transfers among their customers,as well as the online auction site eBay, stock exchanges, and many activities of banks are also user-network businesses.

Conclusion
When moving towards the Disruptive Innovation in an organization, the appropriate solution is to encourage the development of disruptive business models that can assume a greater share of the workload. By coupling technological advances with appropriately matched business models, disruptive innovation can bring about affordability and accessibility to industries ranging from steel making to personal finance. It is also worth pointing out that some organizations have achieved Distruptive innovation through Lean Six Sigma. Lean Six sigma has been the key driver for performance improvement for many companies, including more than 50 percent of the Fortune 500 companies. One CEO from a Fortune 500 copmany pointed out that his company used tactical innovation within the DMAIC methodology to generate the savings needed to fund the strategic or disruptive innovation that was launched at the corporate level.

16,368 Comments

  2. Greate pieces. Keep posting such kind of info on your
    blog. Im really impressed by your blog.
    Hello there, You have done a great job. I’ll certainly digg it and personally suggest to my friends.
    I’m confident they will be benefited from this web site.

    Stop by my web blog: cannabis dispensary

  3. Thanks for sharing your thoughts. I truly appreciate your efforts and I am waiting for your next
    write ups thanks once again.

    my homepage – coining

  4. I’ve been exploring for a little for any high-quality articles or blog posts in this kind of area .
    Exploring in Yahoo I eventually stumbled upon this site.

    Reading this info So i’m satisfied to show that I’ve a
    very just right uncanny feeling I found out just what I needed.
    I such a lot unquestionably will make certain to do not overlook this site and provides it a glance regularly.

    Here is my blog post; 라리가중계

  5. Присоединяйтесь к группам объявлений
    России!
    Частные объявления всегда были и будут
    бесплатными.
    Не нарушайте правила групп, чтобы размещать Ваши объявления
    Присоединяйся на свою группу, чтобы не потерять…
    Группы объявлений по городам

  7. I’m extremely inspired along with your writing talents as well as with the structure on your blog.
    Is this a paid subject or did you customize it yourself?

    Anyway stay up the nice high quality writing, it’s uncommon to peer
    a great weblog like this one nowadays..

    Look at my website 마크티비

  8. I don’t know whether it’s just me or if perhaps everybody else encountering problems with your site.
    It appears as if some of the written text within your posts
    are running off the screen. Can somebody else please provide feedback and let me know if this
    is happening to them too? This may be a issue with my browser because I’ve had this happen before.
    Cheers

    Also visit my blog post :: cancer research

  10. Magnificent beat ! I wish to apprentice while you amend your website, how can i subscribe for a blog web site?
    The account helped me a acceptable deal. I had been a little
    bit acquainted of this your broadcast offered brilliant transparent idea

  11. Hi, i think that i saw you visited my weblog so i came to “return the favor”.I’m
    trying to find things to improve my web site!I suppose its ok to use some of your ideas!!

  13. I know this web site offers quality based posts and other information, is
    there any other web site which gives these data
    in quality?

    Also visit my blog post; cancer research

  16. Its like you read my mind! You seem to know so much about this, like you wrote the
    book in it or something. I think that you can do with a few pics to
    drive the message home a little bit, but instead of that,
    this is great blog. A great read. I will
    definitely be back.

  17. This is very interesting, You’re a very skilled blogger.
    I have joined your rss feed and look forward to seeking more of your magnificent post.
    Also, I’ve shared your site in my social networks!

    Feel free to surf to my web-site – Physiotherapie Kloten

  18. Hello there! I could have sworn I’ve been to this blog before but after browsing through some of the post I realized it’s new to me.
    Nonetheless, I’m definitely glad I found it and I’ll be book-marking and checking back often!

    My web site … Charles IV.

  19. I do accept as true with all of the ideas you’ve offered for your
    post. They’re really convincing and can certainly work.
    Still, the posts are too brief for newbies. May just you please extend them a bit from
    subsequent time? Thank you for the post.

    My page; 해외선물 대여업체

  20. Hello! Do you know if they make any plugins to protect against hackers?
    I’m kinda paranoid about losing everything I’ve worked hard on. Any recommendations?

  22. Having read this I thought it was very enlightening.
    I appreciate you spending some time and energy to put this article together.
    I once again find myself personally spending a significant amount of
    time both reading and leaving comments. But so what, it was still worthwhile!

    My webpage; Forex trading psychology tips

  23. I like the helpful info you provide in your
    articles. I’ll bookmark your weblog and check again here regularly.
    I am quite sure I will learn a lot of new stuff right here!
    Best of luck for the next!

  25. I am sure this post has touched all the internet viewers, its really really
    fastidious post on building up new web site.

    my web page … 라리가중계

  26. We’re a group of volunteers and starting a new scheme in our community.

    Your web site provided us with valuable info to work on. You’ve done an impressive job and our entire community will be thankful
    to you.

    Also visit my site prague

  27. What i don’t realize is actually how you are not really a lot
    more neatly-preferred than you might be now. You are very intelligent.
    You know therefore considerably on the subject
    of this matter, made me in my view consider it from so many various
    angles. Its like women and men aren’t fascinated unless it is something to do with Woman gaga!
    Your own stuffs outstanding. Always maintain it
    up!

    my web blog; belgian loafers

  29. I quite like reading through a post that will make people think.

    Also, thanks for allowing me to comment!

  30. Excellent blog here! Also your website loads up very
    fast! What host are you using? Can I get your affiliate link to your host?
    I wish my website loaded up as fast as yours lol

    Feel free to visit my homepage :: 해외선물 대여계좌

  32. What’s up i am kavin, its my first time to commenting anyplace,
    when i read this post i thought i could also create comment due to this good paragraph.

    My site cancer research

  34. Have you ever thought about writing an e-book or guest authoring on other sites?

    I have a blog based upon on the same topics you discuss and would love to have you share some stories/information.
    I know my readers would value your work. If you are even remotely interested, feel free to send me an e-mail.

    my web site: cannabis uses

  36. I will immediately clutch your rss feed as I can not in finding your e-mail subscription hyperlink or
    e-newsletter service. Do you have any? Kindly permit
    me understand so that I may subscribe. Thanks.

    Take a look at my web-site; 해외선물 먹튀업체

  37. Hi there, just became aware of your blog through
    Google, and found that it is truly informative. I am going to
    watch out for brussels. I will be grateful if you continue this in future.
    Lots of people will be benefited from your writing.
    Cheers!

    Also visit my page – 해외선물 대여계좌

  38. I visited various web sites but the audio quality for audio songs existing at this web page
    is in fact marvelous.

  39. That is a very good tip especially to those new to the blogosphere.
    Short but very accurate information… Many thanks for sharing this
    one. A must read post!

  40. Just wish to say your article is as surprising. The
    clearness in your post is simply nice and i could assume you’re an expert on this subject.
    Well with your permission allow me to grab
    your RSS feed to keep up to date with forthcoming post. Thanks a million and please keep up the rewarding work.

    Visit my blog: 마크티비

  42. Greetings from Idaho! I’m bored at work so I decided to browse your blog on my iphone during
    lunch break. I love the info you present here and can’t wait to take
    a look when I get home. I’m amazed at how fast your blog loaded on my phone ..

    I’m not even using WIFI, just 3G .. Anyhow, fantastic site!

    Here is my web blog – Physiotherapie Kloten

  43. Hello would you mind letting me know which webhost you’re working with?
    I’ve loaded your blog in 3 different internet browsers and I must say this blog loads
    a lot quicker then most. Can you recommend a good hosting provider at a honest price?
    Kudos, I appreciate it!

  45. supplemental resources

    DISRUPTIVE INNOVATION- Technological advances through business models – Thomas Gachie

  46. This article gives clear idea designed for the new visitors of
    blogging, that genuinely how to do blogging.

    Have a look at my blog post: prague

  47. When I initially commented I clicked the “Notify me when new comments are added” checkbox and now each time a comment is
    added I get four emails with the same comment. Is there any way you can remove me from that service?

    Thank you!

    Feel free to surf to my blog post … Bohemia

  48. Today, I went to the beach with my kids. I found a sea shell and gave it to my 4
    year old daughter and said “You can hear the ocean if you put this to your ear.” She put the shell to
    her ear and screamed. There was a hermit crab inside and it pinched
    her ear. She never wants to go back! LoL I know this is entirely off topic but I had to
    tell someone!

    Look at my web blog :: 해외선물 커뮤니티

  49. I think this is among the most vital information for me. And i’m glad reading your article. But should remark on few general things, The web site style is wonderful, the articles is really nice : D. Good job, cheers

  50. What’s Taking place i’m new to this, I stumbled upon this I’ve found
    It positively useful and it has helped me out loads.
    I’m hoping to contribute & help other users like its aided me.

    Good job.

Add a Comment

Your email address will not be published. Required fields are marked *