Disruptive innovation
Disruptive Innovation
Disruptive Innovation (di-ˈrəp-tiv in-ˈnə-vā-shən) is a term in the field of business strategy that refers to an innovation that significantly alters the way that industries operate, often displacing established market-leading firms, products, and alliances.
Etymology
The term was defined and first analyzed by the American scholar Clayton M. Christensen and his collaborators beginning in 1995, and has been called the most influential business idea of the early 21st century.
Definition
Disruptive Innovation is a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors. The term is used in business and technology literature to describe innovations that improve a product or service in ways that the market does not expect.
Related Terms
- Sustaining Innovation: An innovation that does not affect existing markets. It may be either "evolutionary" (incremental) or "revolutionary" (radical) in nature.
- Innovation: The process of translating an idea or invention into a good or service that creates value or for which customers will pay.
- Market Disruption: A situation wherein markets cease to function in a regular manner, typically characterized by rapid and significant price declines.
- Business Strategy: A set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making.
See Also
External links
- Medical encyclopedia article on Disruptive innovation
- Wikipedia's article - Disruptive innovation
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