Managing Innovation: Disruptive Innovation Theory

Managing Innovation

Table of Contents
INTRODUCTION..........................................................................................................................1
MAIN BODY...................................................................................................................................1
Disruptive innovation theory.......................................................................................1
Application of disruptive innovation theory in the historical development context........................4
Application of disruptive innovation theory in the future development context.............................7
CONCLUSION................................................................................................................................5
References:.......................................................................................................................................5
Books and Journals.....................................................................................................................5

INTRODUCTION
Managing innovation basically means is to manage all the innovations which are taking
place in the business(Mir, Siddiquei, Hayyat and Razzaq, 2020). Starting from the idea
development to the final result of innovation the management has to manage all the ideas of
innovation. By innovation means any idea which is new and different which has not yet came in
the market. When any company adopt new changes or innovation then the company is reacting to
the changes which are there in the market otherwise they would not be able to cope the
competition. Innovations help the company to gain sustainability when they make continue
improvements in offering the new products or providing different or unique services. There are
various theories of innovation but the most unique is the Disruptive innovation model which is
based on the ideology that when a smaller company challenges the large established company in
the market by entering into the market and changing the whole segment of that company.
Various companies have used this theory for the expansion of business. But this theory would be
eligible to only those companies who are coming up with new idea which the other companies
have still not offered to their customers.
MAIN BODY
Disruptive innovation theory
Disruptive innovation model have changed the way which small entrepreneurs think
about the innovations (Biemans and Griffin, 2018). This model have come out to be the best way
where small companies can up in the market to beat the large enterprises with their new and
innovative approach. This model is basically a process where the products and services which
the small companies are going to offer to their customers takes the initial step in simple way-
which is from the bottom of the market using less costly and better approachable way. And in the
later time they move really upwards which eventually leads to replacing the established business.
This means how the small companies with just few resources have the courage to beat
the large businesses with the mode of entering the bottom of the market and then just moving
upwards. This model was developed in 1990 by the professor of Harvard school Clayton
Christensen. In the business term, disruptive innovation means the way which the companies
improved their products or services in such a manner which is not expected in the market. Like
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the Hello fresh has made significant changes in the services which they provide to the customers
and the quality of meals which they serve which are unique and different.
Principles of disruptive innovation-
 Never target an incumbent with sustaining solution- Incumbent companies are those
who have good resources, efficient customer base and good products offered to the
customers(Kobarg, Stumpf-Wollersheim and Welpe, 2018). On the other hand, sustaining
solution means those products which the company have brought up in the market with
some good features, and with better performance. So, if the company wants to enter the
market they can do so but starting up with the bottom. That means coming with cheaper
products, in low prices targeting low profit margin.
 To bring products according to customer needs- The small companies who want to
adopt this model should first identify the needs of the consumers and in what
circumstances they want the product. This will help them in identify the needs of the
consumers and will build according to it. The major work which has to be done in this
particular area is by the marketing team.
 Use emergent strategy to develop disruptive innovation- Emergent strategy is that
strategy where the actions just arise because of some unplanned actions and initiatives
which came up from within the organisation. This approach will be flexible as the
company would be able to modify their goals according to what changes they have made.
This can be done for making new innovations which seems to be required in the market
competition.
 Be patient for growth and impatient for profit- The disruptive model starts with the
base which means the companies have to start from the lower point and then they have to
move up(Radjenovic and Janjić, 2019). This means that in initial way the growth may
not be achieved by the company because they are making their existence which means
they have to be patient for the growth but for the profits they have to be impatient
because this will encourage them to make new innovations.
Process of disruptive theory-
 In the initial step the established business have the monopoly in the market which they
are of confidence that they will not be removed from the market. They focus on their
most profitable customers and ignore the downgrade customers which also require the
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