Analysis of Disruptive Innovation and its Impact on Global Business

This report examines the multifaceted impacts of disruptive innovation within the context of global business trends. It begins by defining innovation and disruptive innovation, highlighting their distinct effects on business growth and performance. The core of the report explores key drivers of disruptive innovation, including compatibility, complexity, trialability, observability, and relative advantage. Each driver is analyzed for its influence on market adoption and consumer behavior, providing examples to illustrate their effects. The report concludes with a summary of the key drivers and recommends that companies focus on these factors to gain a competitive edge in the global market. The report's analysis offers insights into how businesses can navigate the challenges and opportunities presented by disruptive innovation.

Running head: Trends in global business
Trends in global business

Trends in global business
Table of Contents
Introduction.................................................................................................................................................3
Key drivers of disruptive innovation............................................................................................................3
Conclusion...................................................................................................................................................4
References...................................................................................................................................................5
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Trends in global business
Introduction
The main aim of this task is to outline and explain the impacts of disruptive innovation. The key
drivers of disruptive innovation have been explained in the task. Further detail of the task has
been detailed below.
Key drivers of disruptive innovation
Innovation may be defined as a new idea, device, technique, method and tool. Innovation is the
better application and tool of better solutions that attain new requirements, unformulated needs
or existing market requirements (Lundvall et al, 2011). Innovation is the new thing and idea for
doing something. On the other hand, disruptive innovation affects the success and growth of the
firm adversely. It may also influence the performance and productivity of the organization as
well as employees. Disruptive innovation refers to the field of business administration which
refers to an innovation that creates new value network, market and eventually disrupts an
existing value network, market, products and services. The disruptive innovation is not generic;
it is differ from product to product and service to service (Drucker, 2014). It affects the long term
mission and vision of the organization adversely.
The disruptive innovation is not good and significant for the organization. It affects long term
growth and progress of the firm. It creates hurdles and obstacles within the organization. There
are various key drivers that affect the profitability and sustainability of the firm. Some of the key
drivers that contribute in disruptive innovation are discussed below.
Compatibility: It is one of the key drivers that could affect the revenue and innovation of the firm
negatively. It has been noted that dynamically and continuous innovations are greater on
compatibility rather than discontinuous innovations. For example, fast food in the form of
burgers, noodles and pizzas took considerable amount of time to get disrupted into the Indian
community, as it remarkable with deal roti meal concept. Therefore, it disrupts the quality and
features of the products (Carayannis and Campbell, 2012).
Complexity: The level of complexity in a product purchase and usage may also influence the
disrupt innovation. An innovative offering will be disrupted when there is ease of purchase,
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Trends in global business
understating and use. Technology complexity is also an obstacle or issue to diffusion. People
resist adoption of new technology and process. It has been analyzed that complexity is the major
issue in disruptive innovation that could lead to misunderstanding and miscommunication at the
workplace. The organization need to focus on the complexity to overcome the competitors.
Trialability: The products and services can be analyzed and tried also evaluates the rate of
acceptance. This is done because the prospectus gets an opportunity and option to try the product
or service, asses it and decide to accept and reject it (Petrick, and Martinelli, 2012). The
consumers could try out the innovative products and services that are offered by the
organization. Trails leads to purchase that can be inspired and enhanced through guaranty and
warranty schemes. Such trails encourage a product and service to be disrupted easily (Hang,
Chen and Yu, 2011).
Observability: It refers to the process and case through which the product can be observed.
Through observation, the product can be imagined and observed. The higher degree of
observation creates hurdles and issues in innovation while offering new and innovative products
and services (Petrick, and Martinelli, 2012).
Relative advantage: The relative advantage of the innovative product and service can influence
the growth of the firm. The similar products create tensions and confusion in the minds of the
consumers. Thus, compatibility, relative advantages, trialability, observability, and complexity
affect the innovation (Kumar, 2012).
Conclusion
On the above mentioned analysis, it can be concluded that innovation helps in increasing revenue
and outcomes whereas disruptive innovation affects the consumer behavior negatively. An
organization should focus on the key drivers of the disruptive innovation. It is recommended that
the company should focus on the key drivers of disruptive innovation in order to gain
competitive benefits.
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References
Carayannis, E.G. and Campbell, D.F., 2012. Mode 3 knowledge production in quadruple helix
innovation systems. In Mode 3 Knowledge Production in Quadruple Helix Innovation
Systems (pp. 1-63). Springer, New York, NY.
Drucker, P., 2014. Innovation and entrepreneurship. Routledge.
Hang, C.C., Chen, J. and Yu, D., 2011. An assessment framework for disruptive
innovation. Foresight, 13(5), pp.4-13.
Kumar, V., 2012. 101 design methods: A structured approach for driving innovation in your
organization. John Wiley & Sons.
Lundvall, B.Å., Joseph, K.J., Chaminade, C. and Vang, J. eds., 2011. Handbook of innovation
systems and developing countries: building domestic capabilities in a global setting. Edward
Elgar Publishing.
Petrick, I.J. and Martinelli, R., 2012. Driving disruptive innovation: problem finding and strategy
setting in an uncertain world. Research-technology management, 55(6), pp.49-57.
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