Business Report: Disruptive Innovation Theory, History & Future Trends

This report provides a comprehensive overview of disruptive innovation theory, a concept that focuses on how new technologies and business models can disrupt existing markets. The report begins by defining disruptive innovation and outlining its core principles, including enabling technology, innovative business models, and coherent value networks. It then delves into the practical application of this theory, using Dyson Ltd. as a case study, highlighting how the company revolutionized the vacuum cleaner market by introducing bagless technology. The report examines Dyson's historical development, demonstrating how the company created a new market and value network by challenging established industry norms. Furthermore, the report discusses the benefits and limitations of disruptive innovation theory, offering insights into its strengths in fostering growth and providing consumer benefits, while also acknowledging the uncertainties and potential pitfalls associated with its implementation. Finally, the report speculates on the future applications of disruptive innovation theory, considering how it might shape future business landscapes and drive further innovation across various industries.

MANAGING INNOVATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Innovation Theory.......................................................................................................................1
Application of Disruptive innovation theory in historical development context........................4
Application of Disruptive innovation theory in future development context..............................7
CONCLUSION................................................................................................................................8
REREFENCES..............................................................................................................................10

INTRODUCTION
Innovation can be defined as a new idea of creative thoughts or new imagination in form
of devices, products or method. Innovation is one of those things that can helps an organization
gain competitive advantage, attract new customers, sustain within the existing market (Taylor
Buck and While, 2017). In fact, it is considered as a factor which is required to be focused upon
by companies so that they can sustain within the tough competitive environment. This
assignment will lay emphasis upon Disruptive innovation theory, applications of this theory in
historical development context and in future development context.
MAIN BODY
Innovation Theory
Innovation is one of the most important things which is required to be focused upon
today by every organization as it helps companies to grow, expand, gain competitive advantage.
Organizations can bring innovation within their business by focusing upon identifying future
needs of their customers (Flavin and Quintero, 2018). There are various kind of innovative
theories that are required to be known by organizations so that they can bring changes within
their products and services. Usage of these innovative theories helps an organization to
implement and develop new innovative products in a proper manner.
Disruptive innovation theory overview
One of the major innovative theory which is used by organizations is Disruptive
innovation theory. It is one of the most important innovation theories of innovation which is
majorly misunderstood. Disruptive innovation can be defined as a kind of theory that focuses
upon a kind of innovation that can help an organization to create a new market, network values
which eventually can help a firm to disrupt existing network values and market by displacing
well established market of leading firms, alliances and products (Pandit and et. al., 2018). This
theory provides an example and also helps in explain how well- established firms can get
overtaken by other organizations even by smaller ones. This reason helped in introducing the
concept of disruptive innovation. People often misunderstand this theory because of which they
become a victim of their own success. Many times, this theory is criticized for its shortcomings,
despite of the fact that they have already been addressed.
Disruptive innovation theory concept
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Disruptive innovation theory is basically used by organizations for innovating a new
product which more affordable, easy to use and resolve their major problems or issues associated
with a particular product or service. This theory is based upon few concepts that helps in making
it a successful theory. First is enabling technology, in which invention or innovation that makes a
product more affordable and accessible to wide population is the first concept that helps in
making sure success of a product (Schwalbe, 2018). Second is innovative business model in
which a business model should be developed that targets non consumers i.e. people who did not
use the product previously. It helps an organization to extend their overall market and consumer
base. Last is coherent value network i.e. when a disruptive technology prospers all the
stakeholders are better off.
This theory basically focuses upon a phenomenon in which a simple innovation can
transform existing market or introduce a simple, convenient, affordable product or service as
compared to products that are complicated and are of high cost. Disruptive innovation first of all
focuses upon a niche market that might appear unattractive or inconsequential to the industry but
innovation of new idea or product can completely transform or redefine the industry (Winskel,
2018). One of the classic examples of this theory is innovation of Vacuum Cleaners within
Vacuum bags by Dyson Group of companies. James Dyson focused upon Vacuum Cleaners as it
was one of the most unattractive products that was only manufactured by companies to fulfil
needs of the customers and was used by customers to simplify their dusting and cleaning needs
despite of a complicated process of operating complex traditional Vacuum Cleaners.
Manufactures simply copied each other’s solution of manufacturing Vacuum Cleaners and when
James Dyson offered an innovative solution to existing organizations, his solution was rejected
and that was the time he targeted Vacuum Cleaners and manufactured his own Vacuum Cleaners
that did not required Vacuum bags.
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Figure 1 performance time graph for disruptive innovation of Dyson Ltd.
Disruptive theory process
The basic process of this theory is to make simple roots within a simple application at the
bottom of the market and them move upward by displacing already established competitors. In
this process of disruptive innovation theory, organizations or firms who has an innovative idea
and can bring changes within existing products or services and attract customers and achieve
success. This theory is majorly used by small organizations that have limited number of
resources but has an innovative idea that can not only bring improvement within the existing
product but can also make it accessible to the customers or can resolve issues or problems faced
by them (Tait and Wield, 2019). For this organizations uses their limited number of resources
and try to innovate a product that uses limited resources, energy, money and is accessible to
customers even those who doesn’t even use the current product or service for a specific reason.
Evolution of Disruptive theory
Evolution of this theory was done in last 1990’s when an article in Harvard business
review was published about Disruptive technologies (Valenduc and Vendramin, 2017). After this
theory of Disruptive innovation popularized. Slowly chances or impact of this theory upon
society, social changes were also studied, its shortcomings were also resolved. There are many
organizations that are still researching upon Disruptive technologies and ways in which it
impacts society or bring changes within the society.
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Figure 2 Evolution of disruptive innovation theory
Benefits and limitations
Disruptive innovation theory has various kinds of benefits that can help small
organizations or firms to achieve success and establish themselves within the market and gain
sustainability. Some of the main strengths or benefits of this theory are as follows: This theory
takes a market share which can help in providing growth opportunities to organizations y
focusing upon adopting leading market trends. It helps in providing a benefit to the consumers as
they can access a better product or service which is better, cheaper and easily accessible to them.
Whereas it is beneficial to the organization as well, as it helps them to enhance their market,
establish themselves within current market, attract a greater number of customers and gain
competitive advantage (Flavin, 2016). It provides and advantage to small firms so that they can
grow and establish themselves in a completely new market segment which is of their own. It is
one of the best theories that can be used by innovative start ups within an effective business
model of their own like James Dyson. Another benefit of this theory is that this type of
innovation helps an organization to motivate their employees so that they can engage within
innovative development, think of new ideas to bring improvement within existing products
which further helps the organization to further enhance their revenue stream. This theory helps in
development of an innovative culture within an organization which not only helps an
organization to motivate their employees but also helps them in enhancing roles and
responsibilities of employees so that more innovative and productivity products and be innovated
and developed.
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Disruptive innovation theory has some limitations as well because of which it becomes
important for organizations to focus upon these limitations or shortcomings to achieve success.
Some of the main limitations of this theory are as follows: One of the main limitations of this
theory is unexpected guarantee of profit and loss of the innovation done by the organization.
New entrants do not have an idea whether the innovation done by them will be profitable to them
or will be a disaster (Überbacher and Scherer, 2019). One of the main limitations of this theory is
its success itself because many times because organizations focus upon unanticipated customers
and gaining competitive advantage with an unsurety that the product will be a failure or a
success. This theory provides unsystematic and unsatisfactory support to organizations that uses
this theory for development of innovative product or service.
Application of Disruptive innovation theory in historical development context
Company Background
Dyson Ltd. is a British technology company that was established by James Dyson in
1991 in United Kingdom. This organization designs and manufactures household appliances like
air purifiers, vacuum Cleaners, heaters, hand dryers, hair dryers, lights and many other kinds of
electronic appliances. Dyson has been considered as one of the most innovative organization that
have approximately 12,000 employees working for them globally. They are majorly known for
their vacuum cleaners as they were the first organization to invent vacuum cleaners. James
Dyson found inspiration for unexpected sources and invented high- quality vacuum cleaners.
Their invention eliminated need of vacuum bags within vacuum cleaners (Sandberg, 2017). This
was because Dyson hated dust bags and loss of suction of traditional vacuum cleaners which
inspired him to innovate vacuum cleaners that does not require vacuum bags. Other than vacuum
cleaners, in 2016, they released a super sonic hair dryer that helps in leveraging stabilizing
machines that was originally used for assembling of nuclear weapons for creation of more
effective and efficient fans. This resulted in a slim, light weighted and powerful hairdryer. In
2018 they invented a hair curling iron that was based upon aerospace physics for heating hair
without burning them. Continuous focus upon innovation and innovative products has helped
Dyson Ltd. to gain competitive advantage and achieve more success as well as enhance their
business. It has always been an innovative company whose main focus has always been to
innovate something new and reduce complications or problems associated with current products.
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Innovative and creative mindset of James Dyson helped him to create a business empire present
globally.
Historical Development
Disruptive theory of innovation focuses upon creation of new market and value network
by disrupting existing market and value network. It is one of those theories in which existing
organizations or firm’s leading market is displaced. James Dyson started his invention by
recreating wheelbarrow in which he replaced front wheel with a large ball in order to enhance its
overall stability. This invention of James Dyson quickly became popular among gardeners. Then
with frustration of vacuum bags made him invent Vacuum Cleaners in which there was no
requirement of vacuum Bags. Disruptive thinking of James Dyson provided him and opportunity
to invent innovative products and make his organization reach hights (Heer, 2017). Dyson spend
almost eight years in trying to license his dual cyclone concept to established vacuum cleaner
manufacturers but it all failed and every one turned him down. This was a point where he though
to manufacturing his own vacuum cleaners in which vacuum bags were not required. Rejecting
Dyson’s innovative product made all the existing manufactures create a tough competition for
them whereas by simply accepting his innovation they could have gained an asset.
Vacuum Cleaners without vacuum bags was a Disruptive innovation that helped Dyson to
create a completely new market and value network. There was one fact about Vacuum cleaners
that attracted Dyson to innovate something new and bring changes within the current exiting
product was that Vacuum Cleaners were unloved products. Neither customers or manufactures
loved them. Customers simply used them as a requirement and manufactures simply copied and
manufactured it they did not use any brains and brought something new within it (Cannata,
2016). This unloves for this particular product also provided Dyson an opportunity to create his
own business and grow his enterprise. These vacuum cleaners were a great success for Dyson
which further inspired him to focus upon developing more innovative products. Dyson wanted to
target underserved market of non- consuemrs who did not used vacuum cleaners due to its
complexity. So he focused upon development of vacuum cleaners without vacuum bags for
them.
In disruptive innovation theory they used radical and incremental innovation model
which helped in development of Dyson Ltd. Radical innovation is not a disruptive innovation
theory model but it can be considered ad disruptive as it also helped in creating new market. This
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radical innovation was used by James Dyson and their employees so that they can bring
continuous chances within their products, and innovate new or existing products by maintain or
increasing overall quality of disruptive products. Throughout the journey of Dyson Group of
Companies, they had adopted radical or innovative innovation model for making high quality
products by testing those products thoroughly. Firstly, he proposed a radical innovation by
producing a cyclone instead of a bag (Wei, Chen and Schulze, 2017). Their disruptive innovation
helped them to maintain a place within market and maintain their market created by them.
Radical and incremental innovation model helped them to continuously bring innovation within
their products. Radical and incremental innovation model is a kind of disruptive innovation
theory model that was focused and adopted by Dyson. This helped Dyson Ltd. to become a
disruptor who always focused upon developing a disruptive product and create a new market
segment and maintain their customer base.
Business canvas model of Dyson Ltd.
 Key partners: Suppliers, vendors, enterprise software companies
 Key activities: manufacturing of home applies, sales of products manufactured by them,
 Key resources: Human resources and innovative technology used by them for manufacturing
of innovative products
 Value preposition: Pay of the products with less complexity and additional features. Products
with lower cost but high quality and less complexity in handling
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 Customer relationship: After sales service, offers. Customer relationship is maintained
though third party distributors, online.
 Channels: sales force. New customers are attracted though different channels such as:
networking, search engine marketing, online selling etc.
 Customer segments: Customers looking for home products or applies that are easy to use
with less complexity and available in lower price with high quality.
 Cost structure: installation and maintenance of equipment’s of technology used, human
resources, manufacturing and operational cost
 Revenue stream: sales of home appliances, after service
Application of Disruptive innovation theory in future development context
Future development majorly includes an ability to continue to transform their ideas and
knowledge into products, process or system in order to increase profitability of an organization,
customers and other stakeholders of an organization. For a technological organization it is
extremely important to focus upon bringing changes within their current products and services
by bringing some new innovative changes within existing products or services. For future
development of an organization it is extremely important for them to focus upon innovation.
Disruptive innovation theory is one of the best theories that can help an organization to continue
innovating something new, maintain their market share and competitive advantage. Dyson Ltd. is
one of those innovative technological organizations that had adopted disruptive innovation
theory in order to succeed and built a large empire (Yun, 2017). They successfully created their
own market space and increased competition of existing players within the market in which they
operate. Dyson always focused upon innovation rather than development of a simple existing
product which was one of the main and core USP of the organization that helped them to sustain
within the market. Currently they use their existing technologies for creation of home appliances.
They can bring changes within their existing technologies that are being used by them for future
growth and development of an organization.
Dyson has always focused upon disruptive innovation theory for introducing new and
innovative products which has further helped them in gaining competitive advantage by
developing new innovative market with a majority of new innovations. Dyson focuses upon
using and developing range of innovative and unique machines that are a bit difficult for their
competitors to copy or immediate. They focus upon bringing innovation within the technology or
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machinery used by them because of which it becomes difficult for their competitors to compete
within the market and imitate their products. This also helps Dyson to provide a competitive
edge in the market. They can continue to use Disruptive innovation strategy for future
development. There are various kinds of improvements that they can bring within their current
strategy as a part of future development (Tidd and Bessant, 2018). Dyson can focus upon
entering into under-developed countries so that they can bring improvement within their living
standards. They can introduce and sell their innovative home appliances within under- developed
countries. Dyson Ltd. already has established a market with disruptive innovation strategy. They
can implement above strategy not only strengthen their market, enhance their overall customer
base but can also enhance their overall financial muscles. They can also focus upon enhancing
technology used within their Vacuum cleaners and promote then. This is majorly because due to
global epidemic crises usage of household appliance is expected to increases globally especially
vacuum Cleaners for house hold cleaning. By increasing awareness about these appliances and
bringing innovation within their Vacuum Cleaners technology and making more effective,
efficient and affordable for people will only help in increasing their market share and customer
base. In recent years, Dyson has focused upon expending within new markets for development of
new market and growth of organization especially in market of Asia. Innovation within their new
technology used within Vacuum Cleaners is one of the best opportunities for them which can be
used by Dyson for future growth and development of the organization as demand of house hold
appliance is expected to double upon in coming years. Dyson can focus upon collaborating with
other technology organizations and with collaboration they can focus upon developing new
products for fulfilling needs and requirements of their customers this will further helps in
attracting a greater number of customers and will increase their brand value as well.
It is suggested that for creation of new customer value and attracting a greater number of
customers for their new innovative products for future development they can also use four action
frameworks. It is one of the best ways with the help of which they can not only maintain their
current customer base but can also expand their customer base. Four action frameworks consist
of four main actions that are: raise, eliminate, create and reduce. For raising awareness about
their products in new or recently entered market they can use advertisements, organize
promotional events etc. For creation of new customer segment there is no such factor that
organization has not focused upon so they can continue to innovate products and services. this
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innovative ideas and products will help them to attract more customers (Välk and Mougenot,
2019). Factors that should be focused by Dyson to attract new customers. Dyson should focus
upon reducing emission of CO2 gas within market. They only have hair dryers that have reduced
carbon label upon them rest all of the products release CO2 at normal rate. Factors that should be
eliminated by Dyson to attract new customers is quite less. So, there is no requirement of
focusing upon this factor.
CONCLUSION
From the above assignment it has been summarized that there are various kinds of
innovation theories that can be used by organizations for development of an innovative product
or service. Proper adoption of innovative theories by companies can help in increasing success
changes of the innovative product and service for the organization. Disruptive innovation theory
is one of the most effective and best innovation theories that can be used by organization for
achieving success and creating a completely new market for their innovative products and
service. Adoption of this theory helps the organization to innovate disruptive product or use
disruptive technology for innovation of new product or service.
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REREFENCES
Books and Journals
Cannata, E., 2016. Corporate entrepreneurship: fostering innovation inside complex
organizations: the Dyson Ltd. case.
Flavin, M. and Quintero, V., 2018. UK higher education institutions’ technology-enhanced
learning strategies from the perspective of disruptive innovation. Research in Learning
Technology. 26.
Flavin, M., 2016. Disruptive conduct: the impact of disruptive technologies on social relations in
higher education. Innovations in Education and Teaching International. 53(1). pp.3-15.
Heer, L., 2017. Innovation Management BUS2177M.
Pandit, D., and et. al., 2018. Disruptive innovation and dynamic capabilities in emerging
economies: Evidence from the Indian automotive sector. Technological Forecasting and
Social Change. 129. pp.323-329.
Sandberg, L., 2017. Dyson Ltd against the European Commission: Case T47/15. EEJ. 7. p.11.
Schwalbe, U., 2018. Schneider Henrique: Creative destruction and the sharing economy: Uber as
disruptive innovation.
Tait, J. and Wield, D., 2019. Policy support for disruptive innovation in the life
sciences. Technology Analysis & Strategic Management, pp.1-13.
Taylor Buck, N. and While, A., 2017. Competitive urbanism and the limits to smart city
innovation: The UK Future Cities initiative. Urban Studies. 54(2). pp.501-519.
Tidd, J. and Bessant, J.R., 2018. Managing innovation: integrating technological, market and
organizational change. John Wiley & Sons.
Überbacher, F. and Scherer, A.G., 2019. A Performative Perspective on Institutional Disruption:
Investigating Regulatory De-Capturing in the UK Corporate Taxation Field. Available
at SSRN 3434681.
Valenduc, G. and Vendramin, P., 2017. Digitalisation, between disruption and
evolution. Transfer: European Review of Labour and Research. 23(2). pp.121-134.
Välk, S. and Mougenot, C., 2019, July. Towards Creativity Stimulating Design Intervention for
Multidisciplinary Innovation Teams. In Proceedings of the Design Society:
International Conference on Engineering Design (Vol. 1, No. 1, pp. 239-248).
Cambridge University Press.
Wei, J.B., Chen, H. and Schulze, H.J., 2017. Two-flavor hybrid stars with the Dyson-Schwinger
quark model. Chinese Physics C. 41(11). p.115101.
Winskel, M., 2018. Beyond the disruption narrative: Varieties and ambiguities of energy system
change. Energy Research & Social Science. 37. pp.232-237.
Yun, J.J., 2017. Customer Open Innovation-Based Business Model Developing Circle.
In Business Model Design Compass (pp. 163-177). Springer, Singapore.
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