Innovation Management Report: Disruptive Innovation Analysis

This report provides a detailed analysis of innovation management, covering various aspects such as disruptive and technological innovation. It begins by defining disruptive innovation and its impact on industries, using Netflix as a successful example. The report then explores technology innovation, highlighting Amazon's transformative role in the retail sector, and discusses the associated challenges. A case study on Dyson's vacuum cleaner examines both disruptive and sustaining innovations, including the company's challenges and successes. The report also analyzes the risks Apple took when entering the smartphone market with the iPhone, including first-mover advantages and pricing strategies. Furthermore, it discusses the strategic importance of innovation to Procter & Gamble (P&G), emphasizing the shift from product to strategic innovation, and the ways P&G improved its innovation success rate. The report also explores the Gore model of management and its potential for driving innovation, along with the global and market challenges of innovation. Finally, it identifies six sources of innovative opportunity, providing a comprehensive overview of innovation management principles and practices.

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Contents
1. Disruptive innovation..................................................................................................................2
2. Technology innovation................................................................................................................3
3. Dyson’s vacuum cleaner..............................................................................................................4
4. Level of risk did Apple take in entering the market and launching the iPhone...........................6
5. Innovation strategically important to P&G..................................................................................7
6. Ways P&G improved their innovation success rate....................................................................8
7. Difficulties associated with the Gore model of management....................................................10
8. Elements of the Gore model of management that could be incorporated by other organizations
to drive innovation.........................................................................................................................11
9. Global and market challenges of innovation.............................................................................12
10. Six sources of innovative opportunity.....................................................................................14
References......................................................................................................................................17

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1. Disruptive innovation
Innovation is searching for something novel for the betterment of an organization and there are
various kinds of innovation, which beliefs to be appropriate for various companies and their
leaders.
Figure 1: (Source: (Camison & Fores, 2016)
Disruptive Innovation denotes to a technology whose utility considerably affects the manner a
marketplace or industry features. A modern disruptive innovation example includes internet, that
will substantially transform the way organizations run commercial enterprise and which
negatively influenced corporations that were reluctant to undertake it. Disruptive innovation is
distinguished from a disruptive technology in that it specializes in the use of extensive
technology (Ahlin, 2014).
Numerous leaders of small, entrepreneurial companies praise it as their
guiding star; so various executives’ at large, well-established organizations,

INNOVATION MANAGEMENT 3
including Inte, use disruptive innovation.
The trouble with disruptive innovation conflating any step forward that
modifies an enterprise’s competitive strategy is that special forms of
innovation need exclusive strategic processes. It can be identified that for a
company to continue as a disruptive innovator will no longer apply to every
organization in a moving or rapidly changing marketplace. In case the
understanding of the theoretical concept or learning of the innovation and
integration with practicality is not clear or precise, then managers may also
turn out to be the usage of the incorrect tools for his or her context, lowering
their probabilities of fulfillment and achievement. over the years, the
theory’s practicality may be undermined (Biemans, 2018).
Netflix, for instance, is one of the examples of being successful as use of
disruptive innovation. Initial out as a corporation imparting DVD mailouts,
Netflix accessible a value handy product and cost-effective product to a
market area that was formerly omitted. Concentrated on people who were
“movie buffs” however no longer essentially interested by new launches,
Netflix turned into providing tailor-made products to a definite customer
segment. Netflix has no longer at the start pose a chance to be fond of
Blockbuster, working in an incredibly exceptional segment of the
marketplace (Bruns, 2013).

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2. Technology innovation
Technology is one of eth growing element in every organization and industry. The use of
industry has become very intensive, due to which the innovation is applied in for either of new
product development or change on the process in the operation of the company or complete
change in the business model. Technological innovation is a subpart or extension of the
innovation concept. The key difference include is that innovation very broad concept includes
every kind of change and a well-defined element. Technological innovation considers being
specific to innovation that is the use of technology by the company. The key focus of the
organization is technological use for either creating or transforming a product or business. One
of eth most relevant example of technological innovation would be Amazon (amazon, 2018).
Amazon is an ecommerce company established on the ground of technology and company has
been completely transforming the retail and e commerce industry with technological innovation
and extensive use of technology. Amazon has initiated its business with an online bookstore and
now it has been reached to a stage where the company is offering almost every required customer
things and electronics with one click. It has not only been able to satisfy customers with
technological advancement, but it has also provided an opportunity for the retailers to sell these
goods online on amazon and earn additional profit out of it while targeting a large number of
customers. For example, the latest products by amazon include amazon prime, amazon echo,
amazon fire TV stick that has result out of transformed technological use to create a smart home
appliance (aboutamazon, 2018).
The key issues faced due to technological innovation is a rapid change in technology, which
tends to make the existing technology degraded and the investment in technology has increased
to a larger extent due to this reason. Technology is a very crucial element where the investment

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is high which is not always suitable for small and medium enterprises. This has resulted in a
success factor for large companies and MNC but has negatively affected small enterprises.
Therefore, it can be said that the technological innovation can be beneficial but also has an
adverse effect (Du & Bstieler, 2016).
3. Dyson’s vacuum cleaner
Dyson’s vacuum cleaners were identified to be disruptive and sustaining innovation. The
company has been facing major issue regarding the vacuum cleaner that was the loss of suction.
With the higher level of research and development, the company was able to invent new vacuum
cleaner with centrifugal vacuum technology that was incorporated to sucked the dirt from the air
rather than deceiving it against bags and fillers. The cleaning power was not only improved by
disruptive innovation, but it also results into the abolition of the requirement for aftermarket bags
as well (Guttentag, 2015).
His competitors, not astonishingly, replied to Dyson’s disruptive technology through innovative
concepts of their own. On the way to stay forward in the market, Dyson modernized his unique
design by sustaining augmentations. He further adds a distinctive, swivel ball to increase
maneuverability. He presented a hand-held product, which leveraged the similar know-how as
the original, upright designs (Hafenbrack et al., 2017).
Electrolux has presented a “cylinder and home vacuum cleaner” and Hoover manufactured and
invented upright cleaner along with the rotating brushes. Both the companies and various other
distributors like Bosch refuse to use the technology introduced by Dyson and offered to them
(Jesus, 2015).

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The key reasons provided by these distributors for the refusal were the arrogant behavior of
Dyson and dismissed Dyson to be a “loony crank.” Moreover, Dyson was very much indulged
into finding the errors and mistakes or weakness in the products which was getting distributors
more annoyed by the company (studylib, 2019). Therefore it can be said that the vacuum cleaner
by Dyson was a successful invention by the company and yet being famous for the vacuum
cleaners but did have issues and was dismissed by Electrolux, Hoover and various other
distributors.
4. Level of risk did Apple take in entering the market and launching the
iPhone
Apple Inc. is one of the greatest electronic and technologically advanced companies. The
company had worked for years in research and development, which has resulted in one of the
company’s most successful product that is iPhone. The company was the first mover in
launching and introducing smartphone to the world. The first mover advantage has been
identified very well with the successful product life cycle of iPhone. However, the risk involved
with the iPhone launch was high too. First mover risk is a major risk involved that is the
challenges faced by the company when the product manufactured by the company is completely
new to the world. Initially, the company needed to invest a huge amount into research,
development, and risk of return on investment was the greatest risk taken by Apple. The reason
being the risk of the unsuccessful product is involved in case of a product launch for the first
time in the marketplace (Huggins & Thompson, 2015).
Moreover, Apple pricing strategy is a premium-pricing strategy due to which the company
launches this product with high prices than other available mobile phones in the market. The

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customers were to be recognized to the latest technological product and may not willing to spend
so much for a completely new concept. This may depend on people that are some are the early
adopters, and some do not adopt any innovation or change unless necessary (Ferrell et al., 2015).
Resistance to change would be another major risk involved by Apply with the launch of the
iPhone series. People generally have the tendency to resist any major change and this was a
complete transformation of product, where people were using since many years that are the
mobile phones with buttons. The company had to promote the product for awareness instead of
attracting promotional activities.
The global business of the company was another reason for the risk involved in the same. The
key challenges for the company included apple-locking criterion that is the sim for every nation
was worked separately and the company needed to unlock the phone, which could cause issues in
some of the phones. Moreover, the company had to abide by some legal rules of the nation; like
in some nations face time is prohibited (Biemans, 2018).
5. Innovation strategically important to P&G
The collective denominator in everything of these achievement situations is “strategic
innovation.” This means original invention in strategy, instead of service or product innovation.
Every corporation considered this innovation and does until now that is the production of
abundant of goods and services innovation. Nevertheless, these corporations had not able to
discover the steel, automobile, airlines, movie rental services, carbonated beverages, and online
exploration. The key that these corporations are pronounced., and will be able to keep
themselves abundant in forthcoming years is an innovation of the approach raw materials are
processed and develop products and services. The customer's value is been created through this

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which could be the major reason for P&G to innovate strategically and not only through product
innovation (Amabile & Rigolizzo, 2015).
Procter and Gamble have been investing in innovation the large extent especially in customer
research in order to gain innovation opportunity around 100 nations. The company had
conducted connect and develop initiative which generally includes new product development but
the problem faced by the company was stagnant growth, restless shareholders, and lagging
productivity. This lead to strategic innovation and the suggested idea for this innovation would
be the need of the company for bigger strategic innovation. The company has always done
product innovation, which needed to be changed strategically to further grow (Coulson-Thomas,
2017).
The company has adapted to strategic innovation for years. For instance, it pioneered a relation
that is new concerning suppliers and retail customers, that would be said to be win-win
partnership. In this, the company looked for relations that would be beneficial and create value
for all the parties involved (news.pg, 2019).
Moreover, the company after analyzing found to be in requirement of business system innovation
that would include up streaming, down streaming, internal system of combination of three.
Another need assessment leads to a new approach for the company to know the ways that the
center of corporate add value to the business, or the ways the company can deliver goods to
make it more cost effective, or ways that the operating model considering local and global
operations works to decrease the complexity and perform effectively. Through the analysis, it
can be said that companies like P&G needs strategic innovation (Procter, 2014).

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6. Ways P&G improved their innovation success rate
The company has been working for innovation since years, which has also lead to product
innovation, service innovation, and later it was realized that the company needed to focus over
strategical innovation. In 2008, the innovation portfolio of P&G was weighing down which lead
the company to take initiatives to improve its innovation success rate (Tidd & Bessant, 2013).
The initiative included:
1. The company enhances the focus on the intermediate category that included transformational
and situational innovative initiatives that will be responsible for delivering novel advantages to
the current product categories that the company is offering (Tukker & Charter, 2017).
2. The organizational support was strengthened by the company for the development of
disruptive business and sustaining transformational formation. It formed various fresh enterprises
creation groups, which would increase the scope and size of the business of the organization
instead of growth factory team working previously. Nevertheless, the management activities and
resources were kept spate and careful from the company’s core business. The groups were teams
that are dedicated and general manager leads the team for the development of new ideas that can
be approachable to various and multiple businesses. , the teams would also be responsible to
continue the completely new opportunities for business of P&G. the learning works that are a
specialized team was also formed that would help in planning and execution the experiments in
the market to learn regarding post purchase use and purchase decisions (Weisberg, 2006).
3. The company refurbished its strategic development of the organization and reviewed the
process. Historically, strategy assessment and innovation were managed separately. In today’s
scenario CFO, CTO, and CEO of P&G explicitly interconnect the business, company, with

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innovative strategies of the company. The linkage was responsible for coupling up of a new
analysis of various problems like the competitive factors which could have been a threat for the
existing business has turned out to be surfaced additional innovative opportunities. The process
was kept responsible for each unit’s examination regarding the production cycle or growth
opportunities pipeline. This was to make sure that it was quick or rapid enough to be able to
deliver what was expected in the growth goals of the company for the forthcoming seven to ten
years. Moreover, the evaluations were made with feminine care that is made of personal business
units and considered broad sectors like household care. The reinvented approach were held
responsible for every business unit to be specific regarding the mixture of various kinds of
innovation that was requiring growth and growth opportunities were identified (hbr, 2019).
7. Difficulties associated with the Gore model of management
Gore tex is an organization who has implemented its original management model regard to
promote innovation years back, which is yet found helpful for various organization. However,
there are difficulties associated with this model as well (wsj, 2019).
One of the key constraints that works as per this model is there is no immediate boss to the
person and people in the organization has various authorities and decision-making power, but
this could be difficult to be implemented in the organization as there is no formal structure to
identify who is responsible for what.
Working without a boss may sound good to the individual but managing people taking their own
decision may become vulnerable for the organization as a whole. The lattice organization
structure introduced in this model was effective and the outcome was some of the innovative
products manufactured by the company like waterproof while breathing, it was a clothing

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material presented by gore tex. This organizational structure was effective for innovation and
open communication but cannot work when it comes to managing people in the organization, as
every individual is an effective leader and that attracting followers (Santos, 2015).
Another difficulty associated with this model of management is the business model presented in
this would possibly unable to meet the next generation leadership requirements. The employees
joining the company may face a problem in adjusting to the environment and generally be
struggling due to a lack of stability in the organization (Gilson et al., 2015).
Another key difficulty associated with this gore’s management model would be motivation. The
employees cannot be motivated all the time in lattice organizational structure. Taking their own
decision an to be the motivational factor at the beginning but this may not be enough to motivate
employees in this structure. The reason being there is no team member or leader to motivate the
employees in a lattice structure, which is generally possible in a hierarchal structure. Moreover,
training could be the problem; the leaders assess the training requirement for their team
members. In the case of lattice organizational structure, the assessment would be difficult as
people are responsible for their own decision and providing training to employees become more
problematic (Hill, 2016).
8. Elements of the Gore model of management that could be
incorporated by other organizations to drive innovation
Some of the element that can be incorporated to drive innovation includes
1. Self-managed teams

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Bill Gore has implemented this in their organization that Is the organizational structure of the
organization. He believed that the employees must have the freedom to take their own decision
and be responsible for that decision. The hierarchal structure of the organization may delay the
work and provide responsibility to the employees by their superiors while having authority and
control in their hands. This may lead to poor innovation as the idea may be generated by any
employee of the organization and he or she must take that risk to apply and succeed in their work
(Gabriel, 2016).
2. Leaders and sponsors and no bosses
According to gore, leadership is to be earned and it is said to be a natural leader. As per belief of
this model was that the people are not to be commanded and supervise every time; they must
have the freedom to do their work as per their will and conditions. Moreover, the feeling of
dissatisfaction would not be there when one of their peer members would become a leader or
boss. This was changed by the company which must be implemented in organizations that the
leaders are found and they need to attract the followers. This would not include resistance by any
individual, as no employee would be for to join any team. They can choose their own leader and
perform under them. Moreover, the freedom to take own decision may best lead to innovation
opportunity in the company or any organization (leadershipcenter, 2018).
3. Motivating right behavior
A way of motivating that has been incorporated at Gore can be implemented in an organization
to promote innovation that is compensation and appraisals through peer members since no one
are boss. The reviews for each individual by peer members will result in compensation and it
could be one of the strong motivators to contribute to innovation (wsj, 2019).

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9. Global and market challenges of innovation
 Cultural risks
One of the major challenges in implementing innovation for a global company is cultural
risk associated with the innovation. This includes beliefs, values, and ethics of the nation
which are different for every nation. Innovation for one nation could result in hurting
cultural aspects in a particular nation. One of the best examples to quote in this case
would be Converse Shoes Company, with product innovation and designing the company
manufactured shoes with Indian god and goddesses. The company as according to Indian
culture they give the very higher position to god and cannot take to even see such product
where the foot would be touched to their picture turned this out to be disruptive launch.
They believe this to be disrespect to their god (Anitha, 2019).
 Continuous reinvention
Another challenge identified that the company’s innovation strategy could face and
market challenge includes the need for rapid reinvention. Company looking for
innovation has to reinvent products rapidly to sustain in the market. For instance, in the
electronic market, this can be the major challenge. A company like Samsung needs to
reinvent very quickly due to focus over innovation, which makes the company update
technology and comes up with new models very rapidly. Moreover, the company is
working for price differentiation that leads to innovation in the process too.
 Increased complexity
Another key challenge for innovation especially in context to global business is
increasing in complexity for the organization. Operational management and innovation
management becomes very complex when it is to implement globally. Moreover,

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complexity can increase due to rapid change in an organizational work environment that
may also lead to resistance to change by employees at the time, increase employees
turnover, and decrease in productivity (Frost, 2018).
 Risk of technological failure
Technology itself is very risky to implement and update through product innovation.
Technology has found to be the key to innovation, which also increases the risk of eth
product failure in the market due to technological failure. For instance, some mobile
models of Samsung were not manufactured with due care and cause to catch fire or it can
be said blast. The reason could be the technical failure of the product that leads to this
cause. Therefore, this is another challenge for organizations with innovation (Petersen,
2015).
10. Six sources of innovative opportunity
Innovation initiated with idea generation, and for gaining opportunity with innovation there are
various sources that lead to innovation of idea generation.
1. Industry and change in market structure
One of the major sources is industry change or transformation observed in the industry leads to
bringing key changes through an innovative idea by the company. For example, due to Amazon
entering into the retail industry with technological advancement has led to a change in market
structure, which makes every big retailer to introduce digitalization through his or her business.
As per the current scenario, large retailing organizations have been working online like Wal-
Mart, Woolworths, and several others. Moreover, another industry that has faced drastic

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transformation would be music appliance industry; the use of DVD’s, CD’s and many traditional
products had become almost obsolete due to industry transformation towards online music like
Netflix or amazon music prime (Brown & Cummings, 2016).
2. Process need
Process need would be included in the internal process of the company, in case any organization
identified its weakness is the process of the company that either is leading to increase in cost to
the company or may lead to additional time consumption. This lead to changes in process of the
company to gain an advantage by the organization to increase the sale for the company or
increase the profit margins of the goods through enhances the process in operations of the
company (Dewald & Osiyevskyy, 2015).
3. Demographics
Demographic factors would include age, the income level of customers, educational factors.
These factors lead to innovation need or innovation opportunity for the company. for instance, in
case of increase in income level of the customer, the consumption of entertainment related goods
and services may have increased which can be gained by the company through innovate their
products and services. One of the examples for this would be products by amazon like amazon
prime, PlayStation by Sony (Carnall, 2018).
4. Change in mood and perception
This factor are relevant in industries like fashion industry where change and fashion is changed
very rapidly that provides companies to bring innovation in product design and new product
development as per the nation’s culture.

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5. New Knowledge
The knowledge could be another source for innovation opportunity for the company. Innovation
is majorly depending on idea generation through which company can gain a competitive
advantage. Increase in knowledge in an organization can be key to innovation. In case the human
resource or leader has gained new knowledge, it can be used for gaining opportunity.
6. The unexpected
Marketplace and environment are very dynamic, and any change in the external environment
may lead to change in organizational process or product innovation opportunity for the
organization (Doppell, 2017).

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