Dive Deeper into Sustaining & Disruptive Innovation

“Only the innovative will survive.”

The statement sounded by Andy Grove, the late co-founder of Intel, may come ambitious. However, looking forward into today’s business environment, being innovative become more of a necessity than a pretentious attempt to apply technology disruption.

Several companies such as Nokia, Kodak, and Yahoo have learned their lessons in doing the best at their business without paying attention at the opportunities of reconstruct and realign. The results? Competitors had them in the first place and successfully disrupt the market demands.

Multimatics understands the needs for improving business performance in the midst of hyper business competition. Therefore, Multimatics offers specified training and certification programs in in digital transformation and digital innovation strategies. With internationally-recognized frameworks and certified instructors, Multimatics is confident to deliver the optimum performance for your skill improvement in digital transformation.

What is Disruptive Innovation Theory?

Coined by Clayton Christensen, Disruptive Innovation theory warns big and large organizations to be aware of threats and risk lies within when they’re excelling at what they do best. When they become too confident at their business, it creates pain poin where they miss opportunities of grabbing larger market.

Disruptive innovation alters the way organizations’ approach in doing the business so that they can establish a new market and set of values, which eventually disrupt the status quo and override the market-leading companies.

Here are 5 Disruptive Innovation Theory Process:

1. Established business focuses to appeal to their most demanded customer while ignoring the customers’ gap

2. New business target this customers’ gap and gain traction by meeting their needs

3. Established business kept focusing on their more profitable customers

4. New business eventually move upmarket by offering solutions that appeal to larger customers’ segment

5. Once new business gained loyalty over established business’ customers, disruption happened

When your business starts to compete in today’s business era, they should be aware of new opportunities and threats lies within. This is where business need to innovate quickly. Business can apply sustaining innovation or disruptive innovation based on their market’s positioning.

Sustaining Innovation vs. Disruptive Innovation

Sustaining Innovation happens when a business develops better-performing products to market to its most profitable clients for bigger profits. Usually, businesses that have already achieved success in their industry employ the strategy of sustaining innovation.

Disruptive innovation happens when a business with fewer resources pushes upmarket and competes with a sustaining business. New business that enters the market take advantages in deliver simpler, faster, and cheaper products to the new market

There are two types of disruptive innovation, which are:

1. Low-end disruption: where business enters an existing market at the bottom and seizes a market segment using a low-cost business strategy and

2. New-end disruption: where business build and control a new segment in an already-existing market.

3 Differences between Sustaining & Disruptive Innovation:

1. Business Model: sustaining innovation relies on high-profit busines model whereas disruptive innovation relies on low-profit business model

2. Target Audience: sustaining innovation targets high-end market segments while disruptive innovation targets new market segments

3. Product Quality & Performance: sustaining innovation strives for high-quality product while disruptive innovations create the most relevant product

Despite the fact that both kinds of innovation are valuable and can lead to success, businesses that rely primarily on sustaining innovation are vulnerable to disruption. Effective strategy that encompasses both disruptive and sustaining innovation can help business to compete at this dynamic business environment!

If you’re interested in learning more about digital innovation strategy and digital transformation, read more about effective strategy in implementing digital transformation and how to craft successful digital transformation.