Disruptive Innovation

The definition of insanity is doing the same thing

over and over again and expecting a different result
each time.
-Albert Einstein
 Definition
• 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. 
 Types of Disruptive
Innovation
• Business Model innovation
• Product Innovation
 Business Model Innovation

• Discovery of a fundamentally different

business model in an existing business.
• the new business model must enlarge the
existing economic pie, either by
1) Attracting new customers into the market
or by
2) Encouraging existing customers to
consume more
e.g. Amazon
 Radical Product Innovation
• Radical innovations are disruptive to
both consumers and producers
• E.g – Mobile phone, Personal
computers
Conventional Shareholder
Value Model