Managing Innovation Disruptive Innovation Theory

Running Head: Managing Innovation
Disruptive Innovation Theory
Name of the Student:
Name of the University:
Author’s Note

1INNOVATION THEORY
Executive Summary
The following report is based on disruptive innovation theory for the selected organisation
TeerraCycle. The aim of the report is to showcase the application of the above mentioned
theory in the organisation and being in new ideas. In this paper it also explains about the
disruptive innovation theory principle, process, benefits and limitation which caters to
understand the theory in depth. The report will further discuss on the business model used by
the organization which is based on the historical development. With the application of the
above disruptive innovation theory the paper will support with some creative ideas and
support the research with the application of theory in the organisation.

2INNOVATION THEORY
Table of Contents
Introduction....................................................................................................................3
Disruptive Innovation Theory........................................................................................3
Principles and process of the theory...........................................................................3
Evaluation of Disruptive Innovation Theory.............................................................5
Benefits of the theory.................................................................................................6
Limitation of the theory.............................................................................................6
Application of theory in historical development............................................................7
Company Background................................................................................................7
Historical Development.............................................................................................8
Application of theory in future development.................................................................9
Future Development...................................................................................................9
Conclusion....................................................................................................................10
Reference......................................................................................................................11
Appendix......................................................................................................................11

3INNOVATION THEORY
Introduction
The following report is based on innovation theory and the application of the theory in
the chosen organization. Innovation is one of the main attribute of any company or
organisation as it brings in a change in method or process of working. Innovation is a Latin
word “Innovare” as it caters to renewal. In terms of management there is a constant flow of
work which comprises of to take up any task and coordinate with the activities in order to
achieve the defined goals and purpose (Aghion et al, 2015). The concept of innovation theory
describes the process by which the innovation disseminates through societal groups and
caters to focus on decision making processes which bring in the adoption of new product and
service. The chosen theory for this report is disruptive innovation theory which can be
described as an improvement that creates a new market and value system and finally disrupt
an existing marketplace and value network, products, establishing market leads and alliances.
This theory was first coined by Clayton M. Christensen in 1995 and it has been one of the
most influenced business ideas of the early 21st century. The aim of this paper is to put this
theory into application as it is best to bring in changes and reform the existing marketing
functioning.
Disruptive Innovation Theory
Disruptive innovation theory can be defined as the process by which the company can
adopt for its product or service initially and take up simple application at the bottom of the
market (Christensen, Raynor and McDonald 2015). These processes come with involving
fewer expenses and more accessible as it is relentless move of the up market which is
eventually established by the competitors. The theory was introduced Clayton M. Christensen
in 1995 which imbedded the term to become virtual from the Wall Street to Silicon Valley
(King, and Baatartogtokh 2015). This theory caters to make the product more resourceful,
accessible, affordable and innovative as the organisation is making it more popular.
Principles and process of the theory
The principles of disruptive innovation theory can be illustrated on the following four
categories which are stated below: