Key Drivers and Impact of Disruptive Innovation in Global Business

This essay delves into the concept of disruptive innovation, primarily drawing upon Clayton M. Christensen's definition of it as a market-changing force driven by startups that appeal to customers previously loyal to established brands. It highlights examples such as Netflix, iPads, Skype, and Google Apps, illustrating how these innovations disrupted existing markets by fulfilling unmet customer needs or offering superior value. The essay identifies key drivers of disruptive innovation, including demands for improved service, better user interfaces, and effective distribution channels, emphasizing the dynamic nature of consumer behavior. It also addresses the opportunities and challenges associated with disruptive innovation, noting its potential to target niche markets and capitalize on future trends, while also cautioning against the risks of poor execution. Ultimately, the essay underscores the ongoing debate surrounding the definition and impact of disruptive innovation, acknowledging its significant role in shaping the modern business landscape and highlighting technologies like 3D printing and SaaS as examples.

W H A T A R E T H E K E Y D R I V E R S O F D I S R U P T I V E
I N N O V A T I O N ?
Trends in the Global Business
Environment

Introduction
Disruptive innovation as according to Clayton M. Christensen is every business
or a concept which garners the success and is able to attract the target audience
It is also able to disrupt the market by attracting customers who were the
consumers of reputed brands
There are a few famous examples of disruptive innovation like iPads, Google
Apps, Netflix and Skype

What is disruptive innovation?
There are no consensus on the definition of disruptive innovation as believed by
many authors
The American scholar Clayton has rather defined disruptive innovation as a state
where startup firms become the choice of customers whereas the established firms
become weaker
(Colombo, Franzoni and Veugelers 2015)

Examples of disruptive innovation
Netflix
iPads
Skype
Google Apps
(Pinkse, Bohnsack and
Kolk 2014)

Examples of disruptive innovation continued…
IPads did obsolete Laptops and PCs by fulfilling the
basic needs of customers
Skype brought revolution in the telecom industry by
enabling customers to make audio and video calls at
a cost near to zero
Google Apps had gathered a number of things such
as eBooks, games etc. in the form of dedicated apps
Netflix obsolete the very famous DVDs from the
market

Key drivers of
DI
1. Demands for
improved service
2. Demands for a
better user interface
3. Channel of
distribution
4. (Osiyevskyy and
Dewald 2015)

Key drivers of DI continued…
The fact that consumer behavior is not static and keeps
on changing under the external influence such as the
media, has boosted disruption to occur in number of
times since 1995. For example, the introduction of
Netflix had targeted the one area of problem
associated with DVDs which was the penalty
payment imposed against a late return.
(Rucker and Galinsky 2016)

Opportunities and challenges of DI
Disruption is targeted on niche market with low-end
customers
Future trends are in favor
If not executed appropriately, the concept may
struggle as well
Strategy making is hugely important
(Wan, Williamson and Yin 2015)

Conclusion
There are contradictions in regards to understand what
is disruptive innovation
Clayton Christensen (2016) calls this a market changer
which was never done before by reputed firms
On the other hand, Reinhardt and Gurtner (2015) says
that despite being so much articles and publications on
the term disruptive innovation, there is still no any
certain definition of DI
The list of disruptive innovation or technology is long
It also includes 3D Printing and SaaS

References
 Colombo, M.G., Franzoni, C. and Veugelers, R., 2015. Going radical: producing and transferring disruptive
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 Hallinan, B. and Striphas, T., 2016. Recommended for you: The Netflix Prize and the production of algorithmic
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 Hutchison, A. and Colwell, J., 2016. Preservice Teachers' Use of the Technology Integration Planning Cycle to
Integrate iPads Into Literacy Instruction. Journal of Research on Technology in Education, 48(1), pp.1-15.
 Martínez-Pérez, B., De La Torre-Díez, I. and López-Coronado, M., 2015. Privacy and security in mobile health
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 McClure, E.R., Chentsova-Dutton, Y.E., Barr, R.F., Holochwost, S.J. and Parrott, W.G., 2015. “Facetime
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 Osiyevskyy, O. and Dewald, J., 2015. Explorative versus exploitative business model change: the cognitive
antecedents of firm level responses to disruptive innovation. ‐ Strategic Entrepreneurship Journal, 9(1), pp.58-
78.
 Pinkse, J., Bohnsack, R. and Kolk, A., 2014. The Role of Public and Private Protection in Disruptive
Innovation: The Automotive Industry and the Emergence of Low Emission Vehicles. ‐ Journal of Product
Innovation Management, 31(1), pp.43-60.
 Rucker, D.D. and Galinsky, A.D., 2016. Growing beyond growth: Why multiple mindsets matter for consumer
behavior. Journal of Consumer Psychology, 26(1), pp.161-164.
 Wan, F., Williamson, P.J. and Yin, E., 2015. Antecedents and implications of disruptive innovation: Evidence
from China. Technovation, 39, pp.94-104.

Thank you