Managing Innovation: Disruptive Innovation Theory at Airbnb

RUNNING HEAD: Managing Innovation 0
Airbnb
Managing innovation

Managing Innovation 1
Contents
Introduction...........................................................................................................................................2
Disruptive innovation theory.................................................................................................................2
Principles and process of disruptive innovation theory..........................................................................2
Pros and cons of the application of the disruptive innovation theory in Airbnb.....................................3
Background of Airbnb...........................................................................................................................5
Disruptive innovation theory at Airbnb.................................................................................................5
Past and present.....................................................................................................................................6
Future....................................................................................................................................................6
Conclusion.............................................................................................................................................6
References.............................................................................................................................................8

Managing Innovation 2
Introduction
Managing innovations is the act of introducing something new. It is not simply inventing
something new like the product but it requires be launching and introducing to the world.
This report states the disruptive innovation of Airbnb. Airbnb drives an online marketplace
and hospitality service. It can be accessed through websites and mobile applications. The
company has taken a unique approach to the lodge. This report comprises the disruptive
innovation theory. The principles and process of disruptive innovation theory are also
accompanied by the pros and cons. The application of disruptive innovation theory in Airbnb
Company is applied. The background of Airbnb is discussed in the report along with the
disruptive innovation theory. The past, present, and future of Airbnb are discussed
concerning disruptive innovations.
Disruptive innovation theory
The disruptive innovation theory is an influential way of discerning concerning innovation-
driven growth. It leads to the overview of product or service into the established industry
which aims at performing better (Govindarajan, Kopalle & Danneels, 2011). Disruptive
innovation is a practice in which product or service takes origin at the bottom of the market
by being less expensive and more accessible. The disruptive innovation theory explains the
phenomenon in which an innovation is transformed into the existing market by hosting
simplicity, convenience, accessibility, and affordability. The disruptive innovations generally
take place in the niche market and appear unattractive to the industry but the new product
wholly redefines the industry. It is a positive force and makes products better, accessible and
affordable (Leclercq-Vandelannoitte, 2015).
Principles and process of disruptive innovation theory
The disruptive innovations help companies to make a bold move. Disruptive innovations are
based on the following principles:
Let go of the past: The past works as a great teacher but bringing past in the present can
shackle the imagination and refer to thinking small (Greenhalgh, et al. 2004).
Boost courage: The employees should be encouraged to express their ideas. The spirit of the
invention is instilled in the team by enabling people to express their ideas.
Embrace failure: The ideas should be carefully cherished by several trials and adjustments.
The team should be encouraged to think of failure as a learning skill of the innovation.
Imaging possibilities: Looking for the powerful ways to reinvent business can be invented by
the possibilities which do not exist (Joshi, 2018).
Reject limits: As a part of the disruptive technology, a company should meet with the
resistance. A company should think of ideas beyond the limits.