Disruptive Innovation Theory Applied to Brewdog: A Business Report

This report provides a comprehensive analysis of Brewdog's application of disruptive innovation theory. It begins with an introduction to the theory, including its definitions, principles, and processes, along with an evaluation of its advantages and disadvantages. The report then applies the theory to Brewdog, offering a company profile, business model canvas, and an examination of the company's historical development. Furthermore, it explores how Brewdog has utilized disruptive innovation within its marketing and product strategies. The report concludes by recommending potential future development pathways for Brewdog, based on the principles of disruptive innovation, with a focus on the future development of the company within the craft beer market. The report is a student submission on Desklib, a platform offering AI-powered study tools for students.

Running head: BUSINESS MANAGEMENT
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Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Innovation theory.......................................................................................................................2
Definitions, Principals and Processes of the theory...............................................................4
Evaluation of the theory (advantages & disadvantages)........................................................6
Application of the Disruptive Innovation Theory in the historical development context..........8
Company profile (business model campus)...........................................................................8
Historical Development.........................................................................................................9
Application of the Disruptive Innovation Theory in the future development context.............10
Future development..............................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................13
Appendix..................................................................................................................................16

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Introduction
The organization that has been selected in the report is Brewdog, and the theory that is
being applied for the purpose of innovation is disruptive innovation. Upon this concept, there
is a great value that can be adequately understood, it does also very favourable for inventors
and corporations. With the implication of this innovation, it does help in recognizing several
opportunities and position innovation that can be added as the disruptive advantage. Several
business leaders use this innovation theory so that it does proactively avert the external
threats, as there are nurturing opportunities for future growth. The innovation theory is being
considered as it does look beyond the technologies and also at the same time, it helps in
understanding the barriers which are certainly unrecognized and the low-end users remains
unfulfilled. The disruptive theory does have several considerations, which includes business
models, services, and experiences of consumers that will help in providing the access,
convenience and cost-effectiveness. The term “disruptive innovation” has been given by the
professor of Harvard Business School, Clayton Christensen.
Innovation theory
Disruption can be defined as the process in which a medium-size organization, with a
limited amount of resources, can able to establish them into an incumbent business. In that
stage, it is necessary and also to focus for the improvement of products and services that have
more demand in-between the consumers, and it is dependable for the organization if they
need for some segment and can ignore the need of others(Smith 2018). The disruptive
innovation will be better understood with the help of that diagram which has been explained
below.

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From the above diagram that has been presented, from there it can be understood that
the red line that has been drawn, it implies that the product performance trajectories which
means that how the products and the services that are provided by the organization. The blue
line is indicated by the willingness of the consumers that are able to pay the prices for
products which is mentioned as customer demand trajectories(Smith 2018). There are several
organizations that produce high-quality products or services, where the profitability is highest
for the satisfaction of consumers in the high-end market. With this implication, it does meet
the need for low-end consumers and for the mainstream consumers(Harrison and Leitch
2018). For this, there is a higher possibility for the entrants so that they can enter into the less
profitable segments that the incumbents are neglecting. The entrants of the disruptive
trajectory that has been marked with the lower red line can improve the performance in their
offerings, and there is a possibility of moving to the market where the probability is much
higher, though there will be a challenge to the dominance to the incumbents.

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Definitions, Principals and Processes of the theory
In today’s world, innovation is not the only thing that defines success, and it is not
also about specific improvements to the products and making things better. There are certain
things that have to keep in the mind of entrepreneurs, i.e. disruption and innovation(Hakala,
Niemi & Kohtamäki 2017).To help particular organization, there are some principles which
the business owners can follow for the betterment of their organization, which has been stated
below:
 Not all the innovation is Disruption: In terms of Merriam Webster, disruption is
something which many of us does if they are unable to continue in that way(Bertilsson
and Rennstam 2018). In considering this definition, it can be seen that if this principle is
applicable to this business that will be anything that does enter into the market, that can
be termed as disruptive.
 Disruption can be low-end or new market: There are two varieties of the disruption, one is
low-end disruption, and the other is new-market disruption. In the low-end disruption, it
does refer to those businesses that usually comes in the bottom of the market, and it
serves the consumers in a very usual way. This is for the lower profit markets, and upon
the new business enters, it has to move to the upstream(Kelliher and Richardson 2019).
Furthermore, it is essential for them to focus on a higher profit margin. In the new market
disruption, the organizations do have competition against the non-consumable products
that are in the lower margin sectors in that particular industry(Skog, Wimelius and
Sandberg 2018).Similarly, as the low-end disruption, it can be seen that the products and
services that are offered by the organization are not good enough, and organizations do
make some profit in the lower prices.
 Disruptive Innovation is a process rather than a product or service: According to the
Clayton Christensen, it does take some time in determining whether the business

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innovation model will further succeed or not(Denning 2016). In describing this principle,
it will be better in taking the example of Netflix, where the DVD-by-mail service did not
satisfy the consumers in a big way. After the shift of the business model, Netflix does
have a massive growth upon the on-demand streaming services.
For example, with the implication of disruptive theory by Uber, they have a strong
performance as the explanation of warranty. In the case of Uber, it is a much-fetched
organization in which through the use of the application that is provided the consumers can
use the services, the organization is providing rides with drivers(Biber et al. 2017). The
organization was founded in the year 2009, and Uber has a really fast growth compared to the
other organization upon the implementation of this innovation model. There is a significant
financial success that has been shown in a little amount of time. Upon the achievements that
are related to the economic and strategic, it does not qualify as per the theory has been stated,
but there is the certain reason through which the organization has described the way as it is.
Uber does have massive growth in the short amount of time, and that is also because
of the vast popularity and increase of demand between the consumers; as it provides a less
expensive solution to a widespread consumer(Ozalp, Cennamo and Gawer 2018). As per the
theory, the disrupters do have started by appealing the unserved consumers and the low-end
consumers, and after that, they migrate to the mainstream market. In the case of Uber, it has
done just the opposite, what it did is firstly they made a position in the mainstream market,
and after that, they appealed to the historical segment that is overlooked.
In the strategy of Uber, it was about sustaining the innovation. It has been seen many
times that it has rarely been stated as inferior to the existing taxis, as the matter of fact most
of the people would say that it is much better(Reinhardt and Gurtner 2018). At the time of
booking of rides, there is just a requirement of few taps in the smartphone; the payment that

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has to be given for the trips has options both in cash and cashless and lastly after the ride is
completed the passengers can rate the driver that will help in ensuring that the high standards
of services which Uber is providing(Millar, Lockett and Ladd 2018).Moreover, Uber do
deliver services which the consumers can rely on and also the driver is punctual; the price
which they take form the consumers are competitive, compared to the taxi services.
Evaluation of the theory (advantages & disadvantages)
In this theory of disruptive innovations, it mainly helped two types of markets, which
the incumbents overlooked. There is an existence of the low-end footnotes as which has been
typically more profitable, and the consumers also get their demanding products and
services(Møller et al. 2017). It can be seen that the organizations sometimes overshoot the
performance that is required by the consumers. The disrupters do create am market where
none has existed, which is in the case of new-market footholds. According to professor
Clayton Christensen, there are several aspects of success and failure of the business, which
are in terms of Disruptive innovations(Christensen et al. 2018). The disruptive innovation is
those that do allow the new product and services to get the foothold in that particular market
which can be appealing to the non-users and also to the low-end users of the product or
service that are offered by the organization(Kilkki et al. 2018). In several terms, this theory of
innovation can be worse at the time of establishing the metrics, and there is some expectation
of the consumers in the markets that are mainly in the existed market with the reduced cost,
that has been increased upon the convenience and the ease of use.
The innovation can be introduced in various ways, upon which that has been
motivating the incumbents in the area that will be avoided upon the direct competition. The
incumbents are usually motivated, rather than fighting a head-on battle with the new entrants

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of the market. In the end, there has been an improvement of disruptive innovation that can be
improved, and the consumers get attracted to it that can be a pain to the incumbents.
From the above diagram, the path of disruption has been displayed, where there is a
plot of performance against the time. It has been considered as the innovation that has been
considered as worst that has been ignored by the incumbents, though it is appealing to the
new consumers that can sustain the change until it becomes the threat(Kaspar 2019).
Application of the Disruptive Innovation Theory in the historical
development context
Company profile (business model campus)
Brewdog is craft beer brewing business that was founded by James Watt and Martin
Dickie in the year 2006, which is located in Fraserburgh, Scotland. It started its operation in

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April 2007, and currently, it is Scotland’s largest independently owned brewery that produces
at least 2,00,000 bottles per month. The organization Brewdog is considered as the
‘disruptive thinker’, and it uses strategy, consumer offerings and all the market building with
its own that with the range of unique branded beer products that are available in the market,
which capture the imagination of consumers(Addo and Fielt 2019). The organization has
created its own market space; it has been done through the promotion of a unique and
memorable product. In the year 2008, they have introduced their product in the market of the
United Kingdom and in 2009it does become the United Kingdom’s fastest beer brand. One of
the essential key aspects of Brewdog is that they focus more on their marketing so that the
consumers do get information about the current products(McDowall 2018). Some of the
marketing events are listed below:
 In the year 2010, Brewdog has lobbied Westminster, that has been called as ‘The World’s
Smallest Protest’, it was the attempt that has been for the UK licensing laws which will
stipulate beer and can only be served in the third, half or full-print measures. The
organization has also introduced the ‘two-thirds’ measured, that has succeeded in
changing the law.
 Before the year of the 2012 Olympics, they have introduced a special edition beer that has
been named as “Never Mind the Anabolic”, which contains steroids and also other
substances that is popular, though it is banned among the athletes.
 To mark the 2014 winter Olympics, Brewdog has released the beer which was named
“My name is Vladimir”, that has been for the protest of President Putin’s archaic laws
which is related to the homosexuality(Hopp et al. 2018). The product packing,
advertisement and also the slogans are also for the protest.

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Historical Development
BrewDog is one of the more significant innovation compared to the others in that time
as it has displayed the traits of disruptive innovators that have been highlighted in the
Innovator’s DNA, by Jeff Dyer, Hal Gergersen, and Clayton M. Christensen. At the time of
implementing, they have identified the five traits and the skills that have distinguished
innovation upon the entrepreneurs from the BrewDog. It is essential to notice that the
innovators do have the expertise which is known as the “associational thinking” (Gomber et
al. 2018). With this, the innovators do get several directions that do get in making the
connections across that do have unrelated questions, ideas and problems. The innovation does
have a breakthrough in the intersection of the diverse disciplines and fields.
Brewdog has a tremendous growth which can be seen in the last ten years, and the
team members do believe that it is because of the theory that they have applied and because
of the revolutionary and authentic Corporate Social Responsibility initiative. It has been
explained many of the senior authority that the employees are happy, and they are also
engaged through which the success of the organization does come (Lester 2018). There are
also several policies that have been applicable for the employees, one of them is Living Wage
employer, that has been from the year 2014, which has helped with different causes and
benefitted from that growth. There is also the Unicorn Fund that is an extension for the
founder’s commitment upon which they have believed(Templeton 2019). The vision of the
organization is simple, and it has been as the leaders are very authentic, that will be for
preaching and evangelizing.
Brewdog has recently announced seven new collaborations with some of the best craft
brewers in the United Kingdom which are listed below:
 Deya Brewing Co

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 Northern Monk
 Wild Beer Co
 Verdant
 Magic Rock
 Fierce Beer
 Buxton
Brewdog has also launched ‘The BrewDog Network’, that does contain amazing
contents from artisan spirits, travel, food and adventure. The shows that have been shown are
less than 10% of the total network content, and that has been equally portrayed to the
offerings to the distribution partners and viewers(Smith and Rupnik 2019). The organization
has also thought of breaking the ground in Brisbane, that will start the construction soon, and
that will be the first step for the organization in concurring the Southern Hemisphere brewery
which will be one of the most important export markets.
Application of the Disruptive Innovation Theory in the future development
context
Future development
Brewdog has unveiled “The BrewDog Blueprint, in which there is an ambitious
business manifesto that has been packed with more than 30 bold initiatives which will evolve
the beer business, and how it has collaborated with the global community in the coming
years. It will be a new dawn for the brewery, and the blueprint does include the wealth of
pioneering plans in which it does consists of the new beers, bars, and several new ways of
doing the business. There is a project scope, where there will be a collaboration with the
brewers of more than 90,000 strong community of shareholders, in which many of them do
contribute several themes and has focused through the BrewDog’s Equity Punk Forum. In the

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blueprint for future development, there will be launches of various products and distribution
innovation that the organization has been working on(Lundgaard and Rosenstand 2019). The
organization will also expand in the area of Europe’s supply chain so that they can dominate
in that region too. There will be a further evolution of Unicorn Fund which has been launched
in the year 2016, from which BrewDog has the share of 10% profits among that team, and
some of the benefits have also been shared with the charities. For the additional financial
support, they have also provided with several materials which include ingredients and
brewing materials that will be offered in its art laboratory for the beer analysis. It will further
help in the growth of sales for introducing recipients for the international sales network. A
barrel ageing programme has been launched so that it helps in reignite the heritage that has
been for the barrel-aged shouts.
Conclusion
From the above discussion, it can be concluded that the theory of Disruptive
innovation has been applied by many of the organizations like Uber, Apple and Netflix etc.,
but growth in the business is not about the sales number and the revenue that they are
earning. It is essential how the products are evolving and are the consumers are happy with
the products that the organizations are delivering or they want more. In seeing the
background of the organization, it has been observed that after the implication of the
Disruptive innovation theory, the growth rate of BrewDog has been tremendously high. They
have also been the market leader in several regions for a certain amount of time. One of the
founders of BrewDog has stated that their mission is to develop in exceptional craft beer. It
will be better for the organization if they carry their Disruptive Strategy, that will further help
in gaining more market share and profits, which will provide more value to the consumers.

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References
Addo-Quaye, R. and Fielt, E., 2019. A Literature Review on the Relationship between
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Biber, E., Light, S.E., Ruhl, J.B. and Salzman, J., 2017. Regulating business innovation as
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Christensen, C.M., McDonald, R., Altman, E.J. and Palmer, J.E., 2018. Disruptive
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Denning, S., 2016. Christensen updates disruption theory. Strategy & Leadership.
Gomber, P., Kauffman, R.J., Parker, C. and Weber, B.W., 2018. On the fintech revolution:
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Hakala, H., Niemi, L., & Kohtamäki, M. (2017). Online brand community practices and the
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Harrison, R. T., and Leitch, C. M. (Eds.). (2018). Research handbook on entrepreneurship
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Hopp, C., Antons, D., Kaminski, J. and Oliver Salge, T., 2018. Disruptive innovation:
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Appendix

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