Innovation Theories: A Comparative Analysis of BrewDog's Strategies
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Desklib provides past papers and solved assignments. This report analyzes BrewDog's use of innovation theories.

Managing innovation
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Table of Contents
Introduction......................................................................................................................................3
Different Innovation theories...........................................................................................................4
i) Disruptive innovation...................................................................................................................4
ii) Blue ocean innovation.................................................................................................................7
Application of Blue ocean innovation theory for historical development.....................................10
Application of Disruptive innovations for future development.....................................................11
Conclusion.....................................................................................................................................13
Reference list.................................................................................................................................14
2
Introduction......................................................................................................................................3
Different Innovation theories...........................................................................................................4
i) Disruptive innovation...................................................................................................................4
ii) Blue ocean innovation.................................................................................................................7
Application of Blue ocean innovation theory for historical development.....................................10
Application of Disruptive innovations for future development.....................................................11
Conclusion.....................................................................................................................................13
Reference list.................................................................................................................................14
2

Introduction
In modern scenario, innovation refers to new ideas, new imaginations, and creative thoughts in
form of method or device. In more scientific and logical aspect, innovation is considered as the
application of better remedies, which meet unarticulated needs, new requirements or existing
needs of the market. It is an effective process of translating an innovation or idea into a product
or service, which creates value in market to customers. Innovation has the ability of bringing
positive changes within the firm so that business ventures can extend their business performance
to their maximum level through adapting to innovation within their firms.
“Brew Dog” is one of the most popular multinational pub and brewery chain based in Scotland.
The company was established in 2007 and since that day, the company has focused on adopting
innovating ways of performing their range of business activities. The company has capacity of
220000 hectolitre that is clear indication of its huge size (brewdog.com, 2019). In 2017, the
company generated £252 million revenue from their customers.
In this study, different theories related to innovation will be described along with their pros and
cons of using. Apart from this, the implication of those innovation theories on the specified
company in improving its innovation capabilities will be highlighted in this portion of the study.
3
In modern scenario, innovation refers to new ideas, new imaginations, and creative thoughts in
form of method or device. In more scientific and logical aspect, innovation is considered as the
application of better remedies, which meet unarticulated needs, new requirements or existing
needs of the market. It is an effective process of translating an innovation or idea into a product
or service, which creates value in market to customers. Innovation has the ability of bringing
positive changes within the firm so that business ventures can extend their business performance
to their maximum level through adapting to innovation within their firms.
“Brew Dog” is one of the most popular multinational pub and brewery chain based in Scotland.
The company was established in 2007 and since that day, the company has focused on adopting
innovating ways of performing their range of business activities. The company has capacity of
220000 hectolitre that is clear indication of its huge size (brewdog.com, 2019). In 2017, the
company generated £252 million revenue from their customers.
In this study, different theories related to innovation will be described along with their pros and
cons of using. Apart from this, the implication of those innovation theories on the specified
company in improving its innovation capabilities will be highlighted in this portion of the study.
3
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Different Innovation theories
In modern business scenario, innovation and creativity has become an integral part of business
success. Market competition and company rivalry has been booming rapidly as well as many of
the new companies are entering in new market place in continuous manner. Therefore, business
organizations have used innovation as the key of achieving business success and they are trying
to adopt and implement different effective innovation theories within their organization for
extending their global business performance and sustainability in an effective manner.
i) Disruptive innovation
Description
In business and innovation theory, disruptive innovation is considered as an innovation, which
creates new market place as well as value network and disrupts an existing market place along
with value network, displacing well-established market leading companies, goods and alliances
(Karimi and Walter, 2016). In 1995, for the first time this disruptive innovation has proved to be
an effective way of thinking regarding innovation-driven growth. In global context, there are
several companies including small size business to large size multinational organizations Intel,
Salesforce.com and other well-reputed organizations those use this disruptive model of
innovation for betterment of their business performance and for global sustainability. Theory of
disruptive innovation has four key elements; incumbents are developing along a trajectory of
innovation, the pace of sustaining innovation, incumbents have the ability of responding
nevertheless, fail to exploit and incumbents flounder because of disruption (Osiyevskyy and
Dewald, 2015). This disruptive innovation theory has come from disruption that refers to a
process whereby a smaller firm with minimal resources is capable of successfully challenging
well-established incumbent businesses.
4
In modern business scenario, innovation and creativity has become an integral part of business
success. Market competition and company rivalry has been booming rapidly as well as many of
the new companies are entering in new market place in continuous manner. Therefore, business
organizations have used innovation as the key of achieving business success and they are trying
to adopt and implement different effective innovation theories within their organization for
extending their global business performance and sustainability in an effective manner.
i) Disruptive innovation
Description
In business and innovation theory, disruptive innovation is considered as an innovation, which
creates new market place as well as value network and disrupts an existing market place along
with value network, displacing well-established market leading companies, goods and alliances
(Karimi and Walter, 2016). In 1995, for the first time this disruptive innovation has proved to be
an effective way of thinking regarding innovation-driven growth. In global context, there are
several companies including small size business to large size multinational organizations Intel,
Salesforce.com and other well-reputed organizations those use this disruptive model of
innovation for betterment of their business performance and for global sustainability. Theory of
disruptive innovation has four key elements; incumbents are developing along a trajectory of
innovation, the pace of sustaining innovation, incumbents have the ability of responding
nevertheless, fail to exploit and incumbents flounder because of disruption (Osiyevskyy and
Dewald, 2015). This disruptive innovation theory has come from disruption that refers to a
process whereby a smaller firm with minimal resources is capable of successfully challenging
well-established incumbent businesses.
4
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Figure 1: Disruptive innovation model
(Source: Christensen et al., 2015)
The above diagram contrasts customer demand trajectories (the blue lines are showing the
willingness of customers to pay for the performance) with product performance trajectories (the
red lines showing how products or services develop over time). As the incumbent firms launch
higher quality goods and services for satisfying the market’s high end, they overshoot the
requirements or demands of many mainstream consumers and generally low end consumers. It
leaves an opening for entrants in order to seek footholds within the lower profit segments, which
are being neglected by incumbents (Mi, 2015). Entrants over a disruptive trajectory enhance the
performance of offerings as well as challenge the dominance of the incumbents and move
upmarket simultaneously.
Effectiveness of the theory
Many of the business organizations that are extremely popular to us use the disruptive innovation
within their firms along with the aim of improving their products and services in such manner
that the market does not expect. Key effectiveness of this theory is that it allows an organization
to enter a new market place and through using appropriate market opportunities along with
innovative mind and abilities capturing the entire market and defeating business giants with an
5
(Source: Christensen et al., 2015)
The above diagram contrasts customer demand trajectories (the blue lines are showing the
willingness of customers to pay for the performance) with product performance trajectories (the
red lines showing how products or services develop over time). As the incumbent firms launch
higher quality goods and services for satisfying the market’s high end, they overshoot the
requirements or demands of many mainstream consumers and generally low end consumers. It
leaves an opening for entrants in order to seek footholds within the lower profit segments, which
are being neglected by incumbents (Mi, 2015). Entrants over a disruptive trajectory enhance the
performance of offerings as well as challenge the dominance of the incumbents and move
upmarket simultaneously.
Effectiveness of the theory
Many of the business organizations that are extremely popular to us use the disruptive innovation
within their firms along with the aim of improving their products and services in such manner
that the market does not expect. Key effectiveness of this theory is that it allows an organization
to enter a new market place and through using appropriate market opportunities along with
innovative mind and abilities capturing the entire market and defeating business giants with an
5

ease. Every business is aimed at gaining the highest position in their business field so that they
are rapidly improving their products and services to meet the demands and expectations of the
company. Disruptive innovation such has the ability of providing all the required resources and
assistance to a business organization such as Brew Dog for dominating over a particular market
place. So that, business organizations are largely attracted to this innovation theory and they are
adopting as well for achieving the maximum benefits in business in upcoming future.
Advantages of Disruptive innovation theory
Modern entrepreneurs and successful leaders are willing to use disruptive innovations to achieve
diverse benefits that are as follows:
It can assist an organization to expand its market place by innovation with new as well as
existing goods or services
Company can find out that are the actual pioneers and leaders for present and the future
alternatively, this allows enhancing the performance effectively (Pisano, 2015)
This is also possible to expose the current operations to the light of urgency, areas of
procedure and structural development
It provides multiple ways to improve performance and market position
The organizational culture can be evolved and improved for influencing innovation
In short, this theory allows business organizations to enter a new market and understand the
business atmosphere as well as improving its business performance beyond everyone’s
expectations.
Disadvantage of Disruptive innovation
The main disadvantage of disruptive innovation is lack of clear and proper understanding. In
disruptive innovation, business ventures are bound to research on understanding the actual
business competitors and rivalry position of the company in the market so that they can better
prepare their functions to compete with them (Osiyevskyy and Dewald, 2015). Many of the
companies face issues during conducting research and assessing the actual competitors of a
particular organization. This must be considered as one of the major disadvantage of disruptive
innovation to use in business context.
6
are rapidly improving their products and services to meet the demands and expectations of the
company. Disruptive innovation such has the ability of providing all the required resources and
assistance to a business organization such as Brew Dog for dominating over a particular market
place. So that, business organizations are largely attracted to this innovation theory and they are
adopting as well for achieving the maximum benefits in business in upcoming future.
Advantages of Disruptive innovation theory
Modern entrepreneurs and successful leaders are willing to use disruptive innovations to achieve
diverse benefits that are as follows:
It can assist an organization to expand its market place by innovation with new as well as
existing goods or services
Company can find out that are the actual pioneers and leaders for present and the future
alternatively, this allows enhancing the performance effectively (Pisano, 2015)
This is also possible to expose the current operations to the light of urgency, areas of
procedure and structural development
It provides multiple ways to improve performance and market position
The organizational culture can be evolved and improved for influencing innovation
In short, this theory allows business organizations to enter a new market and understand the
business atmosphere as well as improving its business performance beyond everyone’s
expectations.
Disadvantage of Disruptive innovation
The main disadvantage of disruptive innovation is lack of clear and proper understanding. In
disruptive innovation, business ventures are bound to research on understanding the actual
business competitors and rivalry position of the company in the market so that they can better
prepare their functions to compete with them (Osiyevskyy and Dewald, 2015). Many of the
companies face issues during conducting research and assessing the actual competitors of a
particular organization. This must be considered as one of the major disadvantage of disruptive
innovation to use in business context.
6
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ii) Blue ocean innovation
Description
Innovation has become a trend in modern business scenario and business organizations are
continuously adopting diverse innovation strategies to extend their global business performance
and sustainability of the company simultaneously (Agnihotri, 2016). Blue ocean innovation
theory is one of the identified theories that are effective and useful to improve market position.
Many of the successful business organizations including Brew Dog use this theory to achieve
success in their business field in an effective manner. This innovation theory is completely
different from other theories. Blue ocean innovation theory focuses upon making a new market
place, where they can dominate without caring about the market competition and rival
competitors. They make the competition irrelevant and gains the maximum profits and benefits
in business. It aligns all systems of company’s activities in pursuit of differentiation and low cost
as well (Aithal and Kumar, 2015). However, there is also red ocean theory that is completely
different from the Blue ocean innovation theory.
Effectiveness of the theory
It has great significance in influencing business operations, overall performance and growth rate.
This theory explains a method of making competitors irrelevant so that specific companies like
Brew Dog would dominate over the new market place. Blue ocean strategy is regarded as
effective innovation theory that offers a new perspective upon strategy formulation as well as
execution. This theory is complete based on maintaining balance between value and costs. The
main effectiveness of this theory is that this makes the competition across the market place
irrelevant by creating as well as capturing uncontested market space (Ahmat et al., 2014).
7
Description
Innovation has become a trend in modern business scenario and business organizations are
continuously adopting diverse innovation strategies to extend their global business performance
and sustainability of the company simultaneously (Agnihotri, 2016). Blue ocean innovation
theory is one of the identified theories that are effective and useful to improve market position.
Many of the successful business organizations including Brew Dog use this theory to achieve
success in their business field in an effective manner. This innovation theory is completely
different from other theories. Blue ocean innovation theory focuses upon making a new market
place, where they can dominate without caring about the market competition and rival
competitors. They make the competition irrelevant and gains the maximum profits and benefits
in business. It aligns all systems of company’s activities in pursuit of differentiation and low cost
as well (Aithal and Kumar, 2015). However, there is also red ocean theory that is completely
different from the Blue ocean innovation theory.
Effectiveness of the theory
It has great significance in influencing business operations, overall performance and growth rate.
This theory explains a method of making competitors irrelevant so that specific companies like
Brew Dog would dominate over the new market place. Blue ocean strategy is regarded as
effective innovation theory that offers a new perspective upon strategy formulation as well as
execution. This theory is complete based on maintaining balance between value and costs. The
main effectiveness of this theory is that this makes the competition across the market place
irrelevant by creating as well as capturing uncontested market space (Ahmat et al., 2014).
7
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Figure 2: Theory of Blue ocean innovation
(Source: Kochkina and Medvedeva, 2015)
This blue ocean theory always suggests for creating own world, where you can attract your
customers and dominate over the market place simultaneously. Rather than joining race with
others to achieve the highest position in their business field, it is better to create an own world,
where an organization like Brew Dog has to never think about the market competition and
sustainability issues (Kim and Mauborgne, 2014). Therefore, the blue ocean innovation theory
is unique and companies like Brew Dog can use this for betterment of their existing company.
Advantages of Blue ocean theory
In order to sustain in market, each of the business venture including Brew Dog requires attracting
new and existing customers in continuous manner. The main reason behind the success of this
Blue ocean theory is that it has the ability of simultaneously attracting wide range of customers
during increasing the cost competition. According to market researchers, organizations need to
go beyond competition (Sharma, 2016). Companies like Brew Dog need to create their blue
oceans for seizing new profit as well as growth opportunities. Compared to ocean, the blue ocean
can provide a lot of more opportunities to business ventures.
Disadvantages of the theory
Apart from that there are several disadvantages of blue ocean innovation strategy that are as
follows:
8
(Source: Kochkina and Medvedeva, 2015)
This blue ocean theory always suggests for creating own world, where you can attract your
customers and dominate over the market place simultaneously. Rather than joining race with
others to achieve the highest position in their business field, it is better to create an own world,
where an organization like Brew Dog has to never think about the market competition and
sustainability issues (Kim and Mauborgne, 2014). Therefore, the blue ocean innovation theory
is unique and companies like Brew Dog can use this for betterment of their existing company.
Advantages of Blue ocean theory
In order to sustain in market, each of the business venture including Brew Dog requires attracting
new and existing customers in continuous manner. The main reason behind the success of this
Blue ocean theory is that it has the ability of simultaneously attracting wide range of customers
during increasing the cost competition. According to market researchers, organizations need to
go beyond competition (Sharma, 2016). Companies like Brew Dog need to create their blue
oceans for seizing new profit as well as growth opportunities. Compared to ocean, the blue ocean
can provide a lot of more opportunities to business ventures.
Disadvantages of the theory
Apart from that there are several disadvantages of blue ocean innovation strategy that are as
follows:
8

Finding and adopting the right blue ocean
The blue ocean innovation theory offers an opportunity of creating a new market place for the
customers, where specified company only can dominate. However, the process of selecting right
Blue Ocean is confusing as there are several blue oceans in the market place. Organizations like
Brew Dog can face diverse business issues due to improper selection of Blue Ocean.
Arriving too early in a new market place
However, this is absolute that entering in new market without any information and for the very
first time is always associated with several risks. As the blue ocean strategy provides a verity of
blue oceans, entering a new blue ocean is always associated with different types of risks.
9
The blue ocean innovation theory offers an opportunity of creating a new market place for the
customers, where specified company only can dominate. However, the process of selecting right
Blue Ocean is confusing as there are several blue oceans in the market place. Organizations like
Brew Dog can face diverse business issues due to improper selection of Blue Ocean.
Arriving too early in a new market place
However, this is absolute that entering in new market without any information and for the very
first time is always associated with several risks. As the blue ocean strategy provides a verity of
blue oceans, entering a new blue ocean is always associated with different types of risks.
9
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Application of Blue ocean innovation theory for historical development
Blue ocean theory of innovation is one of the most reliable and effective theories that are
adopted and implemented by diverse companies in their firms for making the competition
irrelevant so that they can dominate over the market (Goffin and Mitchell, 2016). Brew Dog is
one of the most popular Scottish pub chain and multinational breweries that offers a range of
brewery and dinks to their customers. A craft beer company also deals with diverse brewery
products and drinks services. The company was established in Scotland with two employees and
trained staffs along with lots of hope of conducting diverse operations to meet the expectations
of the customers and generate high amount of profits in business. In current scenario, the
company has more than 3000-trained employees those are ready for serving best class services
along with diverse style to their valuable customers to meet their expectations (brewdog.com,
2019).
In early days, the company set up in Fraserburgh, got some bank loans and spent the exhaustive
capital on stainless steel. They brewed tiny batches, complete filled bottles through own hands
and sold beer at market places. They did it to provoke a passion for drinking great craft beer so
that the company Brew Dog can better capture the market.
10
Blue ocean theory of innovation is one of the most reliable and effective theories that are
adopted and implemented by diverse companies in their firms for making the competition
irrelevant so that they can dominate over the market (Goffin and Mitchell, 2016). Brew Dog is
one of the most popular Scottish pub chain and multinational breweries that offers a range of
brewery and dinks to their customers. A craft beer company also deals with diverse brewery
products and drinks services. The company was established in Scotland with two employees and
trained staffs along with lots of hope of conducting diverse operations to meet the expectations
of the customers and generate high amount of profits in business. In current scenario, the
company has more than 3000-trained employees those are ready for serving best class services
along with diverse style to their valuable customers to meet their expectations (brewdog.com,
2019).
In early days, the company set up in Fraserburgh, got some bank loans and spent the exhaustive
capital on stainless steel. They brewed tiny batches, complete filled bottles through own hands
and sold beer at market places. They did it to provoke a passion for drinking great craft beer so
that the company Brew Dog can better capture the market.
10
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Figure 3: Value innovation in Blue ocean theory
(Source: Agnihotri, 2016)
The company was very sure about using the blue ocean innovation strategy as well as they has
selected their appropriate blue ocean, where they can dominate. Therefore, in early days,
company’s focus was on provoking the customers to drink craft beer and influencing them to
make this trend so that the company can make the competition irrelevant. In 2010, the company
has almost 40 employees and they opened their first craft bar in their home town of Aberdeen.
As the selection of the Blue Ocean was completely appreciate, the response from the community
blown away the company. The strategy of Blue Ocean works smoothly and the company created
their own market place, where they competition was irrelevant (Kochkina and Medvedeva,
2015). There were no competitors in the craft beer market so that Brew Dog generated the
maximum profits from the customers and represented itself as a successful business firm. They
continuously focused on creating value of craft beers in market and influencing more numbers of
customers to them. In the next year, they started 4 bars with 70 employees (brewdog, 2019).
Since that time, the company did not move backward in business. Not only just bars in domestic
level, but the company also expanded their business in diverse locations across the globe
including Japan and Brazil. They opened 12 new Brew Dog Bars in international location and
continued maintaining the costs as per the created value of the product in the product just as
follows in the Blue ocean innovation theory. In 2014, the company has 25 bars and more than
360 employees those were efficient and satisfying with their performance. In 2017, Brew Dog
completed its 10th anniversary along with more than 1000 employees and over 46 bars around the
globe. The company is one of the considered as one of the best examples of an organization that
has reached the success and made the competition irrelevant through just making proper use of
Blue ocean innovation theory. However, this pub has now more than 70,000 shareholders that
have made the price of this organization beyond expectations.
Application of Disruptive innovations for future development
Brew Dog is one of the most famous pub and brewery hubs across the Scotland premises. The
company has already well-established customer base. Company is extremely conscious regarding
customer satisfaction and meeting the expectations of the customers. In this scenario, the
11
(Source: Agnihotri, 2016)
The company was very sure about using the blue ocean innovation strategy as well as they has
selected their appropriate blue ocean, where they can dominate. Therefore, in early days,
company’s focus was on provoking the customers to drink craft beer and influencing them to
make this trend so that the company can make the competition irrelevant. In 2010, the company
has almost 40 employees and they opened their first craft bar in their home town of Aberdeen.
As the selection of the Blue Ocean was completely appreciate, the response from the community
blown away the company. The strategy of Blue Ocean works smoothly and the company created
their own market place, where they competition was irrelevant (Kochkina and Medvedeva,
2015). There were no competitors in the craft beer market so that Brew Dog generated the
maximum profits from the customers and represented itself as a successful business firm. They
continuously focused on creating value of craft beers in market and influencing more numbers of
customers to them. In the next year, they started 4 bars with 70 employees (brewdog, 2019).
Since that time, the company did not move backward in business. Not only just bars in domestic
level, but the company also expanded their business in diverse locations across the globe
including Japan and Brazil. They opened 12 new Brew Dog Bars in international location and
continued maintaining the costs as per the created value of the product in the product just as
follows in the Blue ocean innovation theory. In 2014, the company has 25 bars and more than
360 employees those were efficient and satisfying with their performance. In 2017, Brew Dog
completed its 10th anniversary along with more than 1000 employees and over 46 bars around the
globe. The company is one of the considered as one of the best examples of an organization that
has reached the success and made the competition irrelevant through just making proper use of
Blue ocean innovation theory. However, this pub has now more than 70,000 shareholders that
have made the price of this organization beyond expectations.
Application of Disruptive innovations for future development
Brew Dog is one of the most famous pub and brewery hubs across the Scotland premises. The
company has already well-established customer base. Company is extremely conscious regarding
customer satisfaction and meeting the expectations of the customers. In this scenario, the
11

company is following the disruptive innovation theory that would be beneficial for the company
in upcoming future (Christensen et al., 2016).
The organizational authority has decided to use the disruptive innovation theory to enter in a new
domain and eliminate all the competitors of that specified business domain.
Figure 4: Analysis of product performance vs time in disruptive innovation
(Source: Karimi and Walter, 2016)
In recent days, tourism and hospitality industry is booming up their business operations
worldwide and the growth rate of that particular business segment is impressively high compared
to other businesses. The main reason of following the disruptive innovation theory by Brew Dog
is that the company has focused on extending their business boundaries and successfully entering
in tourism and hospitality domain (Sandström et al., 2014). The company is highly expecting
that they would be able to generate higher amount of profits through dominating in this specific
business domain and in this process, eliminating the existing rival companies is necessity.
Disruptive innovation theory is the most effective and useful innovation theory in this process.
The company is intended to make entry in the new business market, where they have to face new
competitors those are belonging from different business domain and use unfamiliar business
12
in upcoming future (Christensen et al., 2016).
The organizational authority has decided to use the disruptive innovation theory to enter in a new
domain and eliminate all the competitors of that specified business domain.
Figure 4: Analysis of product performance vs time in disruptive innovation
(Source: Karimi and Walter, 2016)
In recent days, tourism and hospitality industry is booming up their business operations
worldwide and the growth rate of that particular business segment is impressively high compared
to other businesses. The main reason of following the disruptive innovation theory by Brew Dog
is that the company has focused on extending their business boundaries and successfully entering
in tourism and hospitality domain (Sandström et al., 2014). The company is highly expecting
that they would be able to generate higher amount of profits through dominating in this specific
business domain and in this process, eliminating the existing rival companies is necessity.
Disruptive innovation theory is the most effective and useful innovation theory in this process.
The company is intended to make entry in the new business market, where they have to face new
competitors those are belonging from different business domain and use unfamiliar business
12
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